Another island security token?

Queensland’s Daydream Island has become the latest tropical resort to consider raising funds through a security token or initial coin offering.
Like many of the island resorts in the Whitsundays, Daydream was hit hard by Tropical Cyclone Debbie last year and has since spent $100 million on renovations.

The owners are turning to security tokens to raise funds for upkeep and further development.

Investors would be right to be skeptical, considering the mountains of publicity Great Keppel Island’s potential tokenisation received last year, before the Island simply changed hands in a standard business deal.

The Australian Financial Review reported this week that the owner of Daydream Island, China Capital Investment Group is in early stage discussions with tech group Lakeba about raising capital via digital coins to revitalise the island.

Last September, Lakeba, along with Property Bay Pty Ltd, were part of the group trying to raise up to $200 million through a Security Token Offering for Great Keppel’s owner Tower Holdings.

The deal got wall to wall coverage for as a world first – in part thanks to a flashy promo video featuring golfer Greg Norman – but property tycoon Terry Agnew ended up selling the island’s lease for $50 million to a Singapore company Wei Chao a month later.

The security token offering was then dismissed in the media by those close to the sale as a ‘red herring.’

It is unknown at this stage whether Daydream Resort is looking at launching a utility token or security token.

A utility token would provide access to accommodation and services at the resort while a security token could provide token holders with a share, or interest, in ownership of the
resort.

A private fund manager told the AFR the idea to tokenise Daydream was a bit crazy.

“This is because it means the actual owners of the asset assume all the development risks but have no real ownership of the asset,” the source said.

“Tokenisation can also result in a real over-inflation in the asset’s value given the volatile nature of the token market.

“I think there is future to this in Australia once the cryptocurrency sector becomes more rational.”

Melbourne-based founder of Malta Digital Exchange Rick Klink told Micky that similar STOs would definitely occur in Australia the near future.

“You will soon see better examples of tokenisation of natural capital,” he said.

The idea of tokenising a tropical resort seems to have taken hold.

Shortly after the Keppel project fell through, Property Bay put a deposit down on Dunk Island near Mission Beach.

The resort has been closed since being badly damaged by Cyclone Yasi in 2011.

They announced a $500 million redevelopment plan that included launching a utility token to provide holders with access to the resort and services.

“The Island economy will be entirely driven through a utility token model that not only will be exchanged for goods and services, but will also reward customers for their energy footprint,” said Tim Sommers from Property Bay.

However there is considerable debate in the Queensland business community over whether the plan is feasible.

Property Bay is also reportedly eyeing Brampton Island and a New Zealand ski resort for similar schemes.

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