The Digital Note, backed by a deed of undertaking by Straits Developments, allows for investors to gain up to 10% additional interest at redemption
- As risk-free rates rise, investment providers in the market are bringing more innovative investment products to compete for investor dollars in the market.
- One such new innovation is being brought to the market by Straits Trading through SDAX – a tokenised corporate bond that is backed by real estate which allows for additional special interest earned at maturity.
SINGAPORE, 11 January 2023 – SDAX, a regulated investment and trading platform providing multi asset securities and fund units, has listed a tokenised note from Straits Trading GG Pte Ltd (STGG) in its exchange. The Digital Note functions as a note, with a deed of undertaking by Straits Developments Pte Ltd, provides an option for investors to earn stable interest income, while being able to participate in the appreciation of the underlying real estate asset – a freehold Gallop Green townhouse at Woollerton Park.
The investment deal with Straits Trading Company, a conglomerate-investment company incorporated since 1887 with diversified international operations and financial interests, is its first tokenised real estate-linked tradeable asset that utilises the blockchain for listing on SDAX’s exchange. The successful listing highlights the strategic partnership that Straits Trading Company has with SDAX as a supportive shareholder, and showcases an investment offering fractionalised real assets for investors.
The Digital Note offers investors the opportunity to invest in a note with property-like returns at a fraction of the cost. Investors will receive 3% annual interest payment and up to 10% special interest at redemption of the note which is subject to the sale price of the underlying property or valuation of the property. The previous instance when Straits Trading made available fractionalised real estate to investors was in May 2022 through its Straits Trading Shareholders’ Club where investments were in the minimum of S$200,000 to S$500,000.
“Fractional assets present a great opportunity for more investors to be involved in the various investment options that we have. As we look for strategic opportunities for new growth engines in digital assets, we are glad to be working with a technology platform like SDAX and bring more unique investment opportunities to a wider base of investors,” said Eric Teng, Chief Executive Officer of Straits Developments Pte Ltd.
SDAX works with companies and institutions to list investment deals in a fast, secure and cost-effective way through blockchain technology, in the process making these private market real estate investment opportunities accessible to investors via digital securities, in fractionalised amounts. Licensed by the Monetary Authority of Singapore, SDAX focuses on institutional-grade real estate, corporate finance and ESG (Environmental, Social and Governance) investments. SDAX is backed by strategic shareholders such as ESR (APAC’s largest real asset manager), PSA International – a Temasek Company, Straits Trading and RHT Group.
“In the current inflationary environment, people should be looking for ways to make idle funds in the bank more productive. Through our curation process, we collaborated with STC to bring this unique Digital Note that allows for interest income and participation in capital gains from real estate to more investors. With technology opening up more investment options, investors are getting better access to opportunities that generate more returns at the same or lower risk level. The Digital Note with STGG signals a start of more of such investments to come,” said Raymond Poh, Chief Executive Officer of SDAX.
SDAX’s exchange provides secondary market liquidity and enables its investors to participate in trading their digital securities. The blockchain allows for an immutable ledger in which the ownership of the assets is recorded and transferable efficiently on the exchange. The exchange will provide a channel for investors in this deal to trade their digital securities should they wish to exit the investment earlier than maturity – opening up possibilities for investors and providing price discovery for the issuer.
Raymond adds, “We continue to forge ahead with our institutional partners, strategic shareholders and the wider ecosystem to bring more of these curated opportunities for our investors.”