Japan’s Ichigo to Offer Token Backed by $79M in Tokyo Residential Assets

Japanese property and infrastructure firm Ichigo will launch its fifth residence token next month, with the digital security to be backed by seven Tokyo assets collectively valued at JPY 11.4 billion ($79 million).

Issued through the Osaka Digital Exchange, the tokens will begin sales on 24 October, Ichigo said in a release. The underlying assets are Gran Paseo-branded rental apartment buildings in the Tokyo neighbourhoods of Ichigaya Nakanocho, Bunkyo Kohinata, Komaba Todaimae, Nishi Shinjuku, Kiyosumi Shirakawa, Asakusabashi and Minowa.

The latest offering follows the launch of the JPY 10.2 billion fourth token in April and will bring Ichigo’s residence token assets under management to JPY 42.6 billion. The tokens are managed using the Boostry blockchain platform.

The firm launched its digital real estate subsidiary, Ichigo Owners, in 2022 in order to “expand its product offering and provide individuals and business owners with the opportunity to easily invest in high-quality real estate backed by Ichigo’s long-standing asset management expertise and real estate know-how”, according to the announcement.

Small-Lot Opportunities

Led by chairman Scott Callon, Ichigo expects to record revenue of JPY 11.4 billion from sales of the fifth token. The seven underlying properties, all located within Tokyo’s 23 wards, were completed between 2021 and 2024 and acquired by Ichigo Owners.

The tokens enable small-lot investments in real estate as an alternative to traditional stocks and bonds. The digital securities are regulated by Japan’s Financial Instruments and Exchange Act and are managed on a secure blockchain to minimise the chances of data fraud, Ichigo said.

The firm aims to grow the security token business and expand the broader market. Ichigo’s range of investment products available to individuals and business owners includes direct investments in real estate assets, two listed J-REITs and a listed solar producer.

“Ichigo will provide opportunities to make investments in high-quality real estate assets broadly and readily available to many investors,” the firm said. “Ichigo’s involvement throughout the value chain, starting with product creation through to investment of the underlying assets, will establish touchpoints with new investors and is expected to contribute towards growing Ichigo’s long-term stock earnings.”

Asset Management Growth

To further drive the growth of Ichigo’s asset management business, in August the firm acquired all shares of Tosho Tokai REIT and the unlisted trust’s asset manager for an undisclosed price.

Tosho Tokai REIT owns 24 high-quality residential assets in Aichi prefecture. Ichigo plans to solicit investments from third-parties to reduce the company’s shareholding while leveraging its value-add and asset management capabilities to maximise the REIT’s shareholder value.

The Tosho Tokai buy came after a string of asset sales to Ichigo’s office REIT this year.

In May, Ichigo Office REIT announced the acquisition of three office assets in central Tokyo and three in central Fukuoka for a total of JPY 15.4 billion ($99 million), including four from its sponsor and two from an Ichigo-affiliated fund.

The REIT funded the acquisitions with the sale of two ageing buildings to undisclosed buyers for a total of JPY 4.5 billion ($29 million).

After those transactions, Ichigo Office’s portfolio stood at 89 office assets with an acquisition value of JPY 220.1 billion.