Digital Securities
Business Unit

In Japan, the real estate sector has been slow to embrace digital securities (ST) due to the absence of a robust secondary market. However, with the recent establishment of digital securities exchanges and advancements in legal frameworks governing platforms for tokenizing silent partnership (tokumei kumiai) equity shares under the Real Estate Specified Joint Enterprise Act, the digital securities market for real estate is poised for rapid expansion.

In our endeavor, we are committed to spearheading the digitization of real estate as a cutting-edge asset management tool. Our goal is to democratize access to investment opportunities in digital securities products, not only for institutional investors but also for individual investors. By doing so, we aim to significantly broaden the scope of our current real estate business.

1.Crowdfunding Venture

We are in the process of finalizing the launch of a new real estate crowdfunding initiative, aimed at providing individual investors with opportunities for fractional ownership in a diversified portfolio of real estate assets.

Drawing upon our extensive twenty-year track record in managing real estate funds for institutional investors, our objective is to craft investment products tailored to meet a range of investor preferences. These offerings will encompass short-term options yielding immediate returns, as well as opportunities geared towards investors seeking medium-to-long-term investment horizons.

2.Platform Business

The establishment of a robust platform capable of tokenizing, issuing, storing, and facilitating seamless trading of silent partnership (tokumei kumiai) equity shares through digital securities (ST) is of paramount importance. Historically, trading ST representing silent partnership (tokumei kumiai) equity shares necessitated notifications via “certified date" to meet third-party counteraction requirements, creating a bottleneck in ST issuance.

However, with the amendment of certain provisions, notably the Industrial Competitiveness Enhancement Act (Act No. 70 of 2021), a legal framework has been established. Under this framework, notifications of debt transfers provided through an information system by businesses certified under new business activity plans based on the Industrial Competitiveness Enhancement Act are deemed equivalent to notifications via certified date. An example of this exception occurred on August 1, 2023, with the certification of a new business activity plan (Ministry of Economy, Trade, and Industry) for notifications pertaining to blockchain technology-based credit transfers, marking the inaugural domestic acknowledgment of this special case.

Furthermore, in December 2023, the Private Trading System (PTS) "START" operated by Osaka Digital Exchange (ODX) commenced operations, with plans underway for the opening of an exchange in Tokyo. As the development of the secondary market progresses, leveraging Security Tokens (ST), it is anticipated that the Digital Securities market will experience further growth.

Undoubtedly, we are witnessing a paradigm shift in real estate investment for individual investors, heralding a momentous juncture in our industry's evolution.

3.Income Producing Real Estate Business

Drawing upon our wealth of experience in real estate investment and the insights gained from crowdfunding initiatives, we are poised to embark on investment endeavors in income-generating real estate properties.

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