SINGAPORE: For full-time private investor Wong Yong Kai, an opportunity to invest in a landed property with a starting sum of just S$20,000 was too tempting to ignore.
Wong, who is in his late 30s, decided to commit S$100,000 to a redevelopment project led by FRX Capital to transform a bungalow in Haig Road into a trio of terrace houses. He invested in the project in 2020 via digital tokens offered by online real-estate investment platform Fraxtor, which shares the same founders as FRX Capital.
Fraxtor uses blockchain technology to create tokens to secure the investor’s economic rights to the underlying property, and sells the tokens to raise funds for the project.
Wong told The Straits Times that after doing his research, he found the net projected return on investment of 12% a year over a three-year holding period a worthy investment.
By 2023, he had recouped his principal amount and garnered a net return on investment of 20% a year. The higher return was due to an increase in the project’s gross floor area, coupled with its sale at a premium price in a thriving property market.
Wong, who owns a Housing Board flat, is currently investing in four more projects with Fraxtor.
Investing via digital tokens lowers the barriers of entry with its smaller-sized capital investments, versus direct real-estate investments which traditionally require an initial outlay of hundreds of thousands of dollars.
Currently, in Singapore, some real-estate tokens are considered as security tokens and regulated under the Securities and Futures Act. Firms offering such security tokens need a Capital Markets Services (CMS) licence from the Monetary Authority of Singapore (MAS).
Fraxtor, which has a CMS licence, can market its tokens only to institutional investors and accredited investors here. It would need to meet tighter regulations if it