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MUFG Trust Buys Osaka Tower for $681M to Tokenize Real Estate

Mitsubishi UFJ Trust’s $681M Osaka Property Deal Boosts Japan’s Tokenized Real Estate Market

  • Mitsubishi UFJ Trust and Banking acquired a high-rise building in Osaka for over $681 million.
  • The company plans to use the property for creating digital securities and selling tokenized real estate.
  • Institutional sales will target life insurers through a private real estate investment trust (REIT).
  • Japan‘s tokenized real estate market has seen 63 digital security issuances totaling $1.3 billion since 2021.
  • Mitsui Digital Asset Management and MUFG remain connected via the Progmat digital securities platform.

Mitsubishi UFJ Trust and Banking has purchased a high-rise property in Osaka City for more than $681 million. The trust arm of MUFG will use the building to develop digital securities and sell tokenized real estate assets to both individual and institutional investors.

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For institutional investors, the building will be packaged and sold as a private real estate investment trust (REIT), mainly targeting life insurance companies, according to the Nikkei. While Europe focuses on tokenizing digital bonds, the real estate tokenization market in Japan is still developing.

Trading activity in this space remains modest. The Osaka Digital Exchange’s START platform currently lists six different real estate tokens, with monthly trading volume at about $157,000. Since 2021, there have been 63 digital securities offerings in Japan, totaling $1.3 billion, with real estate making up the majority of these offerings and only about 20% linked to bonds.

Mitsui Digital Asset Management is an active participant in this field. The company, through its Alterna platform, has issued 16 real estate tokens, mostly aimed at retail investors. Fourteen of these tokenizations were carried out under the Alterna platform.

Until recently, Mitsui worked together with MUFG Trust to establish the required trust structure for tokenizing real estate. To speed up its own operations, Mitsui set up the Alterna Trust, creating its own trust structure. Despite this change, Mitsui and MUFG still maintain an indirect relationship.

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This ongoing connection exists via Progmat, MUFG’s digital securities platform. MUFG owns a 42% stake in Progmat, even though it has spun off the platform as a separate company. Mitsui has agreed to continue using Progmat for most of its security token issuances.

Tokenized real estate involves converting property shares into digital tokens, making them easier to buy and sell through online platforms. The Japanese market is still in its early stages, with only a few active platforms and relatively low trading volumes.

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