MUFG's Trust Division to Transform $681 Million Osaka Tower into Digital Assets for Individual Investors
In a significant move, MUFG Trust has announced its entry into Japan's emerging tokenized real estate market. The financial institution plans to offer digital securities for retail and institutional investors, using a high-rise building in Osaka City as the asset.
MUFG Trust, a subsidiary of Mitsubishi UFJ Trust and Banking, acquired the building for over 100 billion yen ($681 million). The acquisition positions MUFG Trust as a direct competitor in the market, where real estate tokens account for approximately 80% of digital securities issuances.
Institutional buyers can participate in the tokenized real estate asset through traditional REIT structures, while Mitsui Digital Asset Management targets retail investors directly through its Alterna platform.
MUFG Trust will also sell portions of the tokenized asset to life insurers as a private REIT. This move allows MUFG Trust to offer fractional ownership of high-value real estate assets to retail investors, a strategy that has been successful in other markets.
The Osaka Digital Exchange's START marketplace lists six real estate tokens with modest monthly trading volume of 23 million yen ($157,000). Despite this, the growing activity in Japan's digital securities market is evident, with 63 digital securities issuances totaling 194 billion yen ($1.3 billion) since the first offering in 2021.
Interestingly, MUFG spun out Progmat as a separate venture but retains a 42% stake. Mitsui Digital Asset Management has been a significant player in Japan's tokenized real estate market through the Alterna platform. However, until recently, Mitsui partnered with MUFG Trust for the required trust structure to tokenize real estate assets. Mitsui established its own Alterna Trust structure last month, effectively ending the direct partnership with MUFG Trust.
Despite the apparent competition, MUFG Trust and Mitsui Digital Asset Management maintain connections through Progmat, MUFG's digital securities platform. Mitsui recently signed an agreement to continue using the Progmat platform for most of its security token operations.
The search results do not contain information about which company acquired a skyscraper in Osaka City for more than 100 billion yen in 2022 and plans to convert the real estate asset into digital shares. However, with MUFG Trust's entry into the market and Mitsui's continued presence, the competition in Japan's tokenized real estate market is expected to intensify.
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