With Digibrixx, the blockchain technology is entering the Luxembourg real estate investment market. The Digibrixx solution allows all those who wish to invest in real estate to purchase a digital brick backed by concrete stone. How can you do it? And for what purpose? Property Token, the company at the helm of Digibrixx is here to give us all the details.
Photo: Located just a few minutes from the centre of Luxembourg City, the Brahms project is one of the two real estate programmes in which you can invest / Credits © Digibrixx
The Digibrixx brand is developed by Property Token. Introduce us to the company.
Property Token is a company based in Luxembourg which was created by the initiative of several professionals in the real estate, finance, and blockchain technology sectors: CreaHaus SA, Espace Invest, INNO Sarl, and Real2digital. All these entities are active in the Grand Duchy and are experts in their various trades to help create the Digibrixx brand, strong partnerships have also been established with BIL and Tokeny.
Digibrixx uses blockchain technology to digitize properties. How does that work?
It is very simple in principle. The blockchain makes it possible to split a financial asset into an infinite number of shares. In this case, a real estate asset is fragmented into small digital bricks called tokens. If the property has a value of 1 million euros, it is possible, for example, to divide it so as to obtain 100 tokens with a respective value of 10,000 euros.
What are the advantages of this tokenization for the investor?
Primarily, it democratizes real estate investment by making it accessible to all. If we look at the example above – Digibrixx makes it possible to invest in a property with as little as 10.000 euros. This makes the process very simple and you don’t need to deal with your bank. You also don’t have to take care of the management of the property because it is entrusted to a professional and neither do you have to deal with administrative procedures. You save time, energy, and money because costs are reduced.
“Real estate projects can be commercial spaces, residences, or offices. All properties are located in Luxembourg.”
What kinds of customers is the Digibrixx solution for?
Given its assets, Digibrixx is aimed at all those who wish to invest in Luxembourg real estate in order to benefit from its dynamism. Digibrixx is also aimed at cross-border commuters who wish to invest in Luxembourg, but do not want to compromise their borrowing capacity to finance the purchase of their home. It is an investment solution that will interest those who are self-employed and wish to invest in real estate but can’t fulfil the credit requirements of banks.
Digibrixx is also an interesting investment solution for those who already own property since it allows them to diversify their assets while maintaining great agility and freedom to maneuver.
I am interested in the Digibrixx solution. Where do I start?
The first thing you need do is to go to the Digibrixx website to get acquainted with the various real estate investment projects in which you can invest. All these projects are carried by promoters who have been chosen to market one or the other of their real estate products via the Digibrixx brand.
The properties are systematically audited and selected by Digibrixx’s real estate experts. Transparency is a must, so each project is the subject of a detailed presentation. The percentage of funds already raised is specified and an estimate of the annual performance is indicated. If you are interested in one of the projects, simply click on its warrant, you will then be put in touch with the promoter who will remain your direct contact and will help you contact BIL, Digibrixx’s financial partner. BIL is in charge of issuing the digitized securities, i.e. the tokens. The investments are therefore relevant, secure, and transparent.
Is it not possible to acquire tokens directly in the Blockchain, via an online exchange platform?
Technologically, such platforms already exist. Digibrixx will launch its own as soon as the Luxembourg and European legal and regulatory frameworks for digital assets (security tokens) allow it. Investors will then not only be able to sell and buy but also exchange their tokens with complete freedom and fluidity. Legislation will evolve, but in the meantime, Digibrixx falls within a well-defined legal framework based on a securitization vehicle governed by the Luxembourg law of March 22, 2004.
“For our first project, for example, the announced performance is 4.25%. Although this is an estimate and not a firm commitment.”
In what types of projects is it possible to invest?
Real estate projects can be commercial spaces, residences, or offices. All properties are located in Luxembourg and are selected by us for their potential in terms of high profitability. Our priority is to make sure that investors achieve great results.
Tell us more about profitability.
Firstly, it is important to know that the money collected by the developer via Digibrixx is used to create a leverage effect and to finance the real estate operation. The investor, thus sees from the outset that his returns will increase. This approach also provides additional security for the investor: the developer also invests in the project, just like the bank that grants loans. With regard to profitability, as mentioned above, a performance estimate is clearly specified for each investment project. For our first project, for example, the announced performance is 4.25%. Although this is an estimate and not a firm commitment.
So in other words, there is a risk.
As with any investment, an investor runs the risk of receiving lower returns than announced or even losing money. That said, if the risk is real, it is weighted. The Digibrixx solution is based on a very concrete foundation and further, the Luxembourg market can not collapse overnight. Over the past decade it has even confirmed its robustness by showing a continuous upward trend. But it is important to emphasise on this: there is no such thing as zero risk.
What is the basis for profitability?
During the investment period the building is constructed and leased. At the end of this period, which is specified from the outset, the subscribers recover their initial investment, the capital gain realized on the sale of the property, and their share of the rents received, after deduction of charges and fees to the Digibrixx program. Quite simple.
This new announcement comes just over a year after the first transaction was completed. We invite you to read this article: First Real Estate Transaction Via Blockchain In Luxembourg