Learn how the Singapore proptech firm Fraxtor taps onto technology to democratise the property investment market
Investing in real estate is an attractive proposition due to various factors: it lets you enjoy cash flow and capital gains, grow your portfolio, and diversify your investments. Historically, real estate is also a hedge against inflation, with property values typically increasing more rapidly than the consumer price index. However, such investments can also present a number of challenges. The financial investment that is required can be substantial. Real estate is considered an illiquid asset, with a lengthy transactional time frame.
Enter online real estate investment platform Fraxtor, which seeks to remove some of the traditional barriers property investors might typically face. An abbreviation of “fractional investors”, Fraxtor helps its clients co-invest in select real estate projects with industry veterans, with minimum investment amounts as low as $20,000, via its innovative blockchain-enabled platform.
Fraxtor turns real estate development projects and investments into digital tokens, which potential investors can buy for a fraction of the price—the firm “uses technology to democratise real estate investment”, says Fraxtor co-founder and group managing director Oliver Siah.
With tokenisation, the value of a real estate investment is carved up into smaller parts; each fraction is converted into a digital token and encrypted with the details of ownership. This gives investors who might not have access to substantial capital the chance to own a fractional share of a property. Fraxtor is licensed by the Monetary Authority of Singapore to offer these real estate security tokens to accredited investors and institutional investors.
Siah helms the firm with co-founder Rachel Teo, with a goal of “bridging capital and opportunities”, together with a number of real estate veterans who boast extensive property development and investment expertise. “Given the network of our founders, we can bring good quality real estate deals to our investors,” he says. “We only offer projects that we ourselves are investing in, to align our interest with our investors.” Besides accredited investors and institutional investors, the firm aims to extend its services to retail investors in the future.
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Incidentally, Fraxtor was the first company to tokenise and fund a development project in Singapore: 5 Gardenia Road, in mid-2019. Among other projects, the proptech firm also tokenised and raised funding for freehold condominium Gloria Mansion in Pasir Panjang Road, as well as a bungalow standing on an expansive 30,659 sq ft freehold site in Mount Rosie Road, which will be redeveloped into several landed homes for sale. Fraxtor has a sister company, Fraxtor Capital, which is involved in real estate development as well as investment management.
The proptech firm aims to expand its overseas presence, and also keep its real estate offerings fresh and diversified. “We are constantly on the lookout for more projects for co-investment on the Fraxtor platform,” declares Siah.
Fraxtor, 101 Cecil Street, #10-08, Tong Eng Building, S(069533), +65 9678 0773.