Project B11G has partnered with blockchain firms Blockhive, Agrello, Oblicity and CoinMetro to launch a pilot real estate crowdfunding project on April 1st, using the blockchain for loan procurement. Company New Page OÜ offers creditors an interest rate of 14% per year, in exchange for a loan, with interest and principal paid out in STASIS stable coins (EURS).
Real estate development firm Future Invest, which has over 25 years of experience in the field, has launched a subsidiary called New Page OÜ, which will use blockchain technology to crowdfund real estate projects. New Page’s launch of Project B11G marks the launch of the first-of-its-kind real estate crowdfunding project in Europe.
The first property being developed is a multifunctional industrial facility in Estonia, designed for small and medium-sized companies. Starting April 1st, 2019, the development team is looking to raise 1.1m EUR and is offering lenders an interest rate of 14% per year, with a maturity date of two years. Powered by blockchain and made possible with digital ID verification, investors world-wide will use digitized human-readable contracts to sign legally binding loan agreements.
Last year, blockchain firms Blockhive and Agrello formed a joint venture called Tokenote to offer a fundraising solution named ILP (Initial Loan Procurement).
On January 26th, 2018, Tokenote launched the first pilot to fund Blockhive’s operations. The pilot project deployed the first successful use-case of Agrello ID, Agrello’s digital verification system, which allows people and companies to establish legally binding agreements over the blockchain. In March of this year, real estate development firm Future Invest OÜ and it’s newly founded venture New Page OÜ will carry out Tokenote’s first third party pilot called “Project B11G”.
B11G Quick Facts
Project Summary: A multifunctional industrial complex development for small and medium-sized businesses.
Address: Betooni 11G, Tallinn, Harjumaa
Total plot size: 10,092 m2
Total building size: 4,126 m2
Number of leasable units: 38
Total Budget: 3.6m EUR
Fundraiser Format: Initial Loan Procurement (ILP)
ILP Fundraiser Target: 1.1m EUR
Interest rate offered: 14% per year
Loan Maturity: 24 months
Token symbol: B11G
Fundraiser Starts: April 1, 2019, 10:00:00 (GMT + 2)
Fundraiser Ends: April 30, 2019, 23:59:59 (GMT + 2)
Minimum Investment Amount: 2 ETH*
*Approx. 240 EUR at press time
What is an ILP?
The ILP (Initial Loan Procurement) is an alternative financing solution for businesses and entrepreneurs who wish to issue debt to raise money via the blockchain. People are given a chance to be creditors and provide companies with loans, based on an underlying, digitally signed, human-readable loan contract. This opens up an international market and makes it easier to obtain project financing;without borders. The ILP solution provides borrowers with a means to benefit from the global scale of the cryptocurrency market, without the need for launching an ICO or issuing a security token. ILPs allow for established companies to finance projects, set up special purpose vehicles or fund diversification strategies.
How is ILP different from an ICO?
For the sake of comparison, the average blockchain investor will liken the ILP to an alternative to the ICO. The ILP, like the ICO, leverages the accessibility and cost-savings of cryptocurrency-led financing. However, it is unlike an ICO in the sense that the transactions occur between lenders and borrowers, as opposed to stock issuers and shareholders. Furthermore, Agrello’s digital ID solution enables lenders to sign legally binding digital contracts, which give them a claim to the principal amount borrowed and the interest payments agreed to in the contract. Lenders receive tokens that provide them with access to liquidity and facilitate the transfer or trading of contracts. The tokens are linked to the loan contract, which lenders sign digitally via Agrello ID. The tokens also represent the value of the underlying contract, which acts as a claim against the principal loan amount and interest payments for lenders. By transacting via loans, the ILP adds an additional layer of security to the creditor, as creditors are always paid out before any shareholders.
About Project B11G: More details
The project, entitled “Project B11G,” will allow investors globally to share in the profits of an industrial real estate development project. The B11G industrial lot, located at the Betooni Industrial Park in Estonia’s Lasnamäe district, will serve a much-needed market, providing multifunctional spaces for small and medium-sized businesses.
Co-founder and CTO Jüri Kulli elaborates on the unique nature of the project: “With Project B11G, we’ve been really persistent on getting input from clients to design an ultra-versatile space, [which is] adaptable to the needs of new technologies and business processes used by those renting out the spaces- we’re all quite happy with the result.”
Located in one of the fastest growing industrial sites in northern Europe, the building will provide tenants with areas for office space, production, warehousing, and showrooms. Behind the project is a team with over 25 years of experience managing real estate properties for clients in the industrial space, including multinational corporations like Toyota and Robert Bosch GmbH. With 30% of the facility already reserved by tenants, the team is confident in achieving their ROI sooner rather than later.
“Until now, our options for crowdfunding were severely limited to the local market and we’re really excited to use blockchain to open up investment opportunities to an international community, with this project, as well as those we have planned in the near future. On the other hand, we also see an equally interesting opportunity for crypto investors to balance their portfolios with a solid investment in real estate,” states Margus Haud, Head of Marketing.
Aside from Blockhive and Agrello, Oblicity, a law firm specializing in blockchain, will serve as the legal partner for the project. The project has also agreed to terms with CoinMetro as the KYC/AML and exchange partner, and it will utilize STASIS stablecoin (EURS) to payout interest payments to lenders. The consortium of partners is working together to turn local real estate projects into global assets, with plans to repeat the ILP process for several upcoming projects.