FLYER'S NOTE: GLOBAL REIT - GLOBAL REAL ESTATE INVESTMENT TRUST

REAL ESTATE INVESTMENT TRUSTS (REITS)

Investing in real estate has long been a well-known method of wealth-building. Favoured by many and with a myriad of options to choose from, individuals are spoilt for choice when it comes to their investment options. However, traditional real estate investment models present immense barriers to entry. Apart from the onerous burden they create in terms of regulatory procedures, the financial aspects attached to them make investing nearly unfeasible for most potential investors. For example, if you wish to own property in a foreign country, in addition to the significant capital required for the purchase of the asset, you would typically also be required to incorporate a local entity as an investing partner, due to restrictions imposed on foreign investors in most jurisdictions. Apart from this, you also need to fulfil all the statutory requirements, including but not limited to tax, accounting and ongoing registration obligations, which have significant costs associated with them. In addition, there may be further restrictions on the type of property funds that an investor may invest in, limiting choice and access to capital. Foreign direct investment also has vulnerability attached to it in terms of the ever-changing micro and macro-economic conditions in each country. To mitigate these risks and overcome investing challenges, the market offers Real Estate Investment Trusts (REITs) as an alternative investment vehicle. A REIT is a trust, corporation or an association that owns, or finances income producing real estate and can be publicly listed or privately owned.

WHO WOULD BE INTERESTED?

Investing in Global REIT will particularly be of interest to:

• Crypto investors looking for stable monthly dividends and seeking to invest in real estate assets

using cryptocurrencies

• Real estate asset holders looking to exit into a liquid market in the crypto domain

• Existing REITs who would like to take advantage of an already established blockchain framework

to enter the crypto domain

UTILITY OF TOKENS

The token holders of GREM and GRET will get future access to all Assets Under Management (AUM) of Global REIT. With regards to the hospitality assets, token holders with minimum 5,000 tokens of GRET or GREM will be eligible to avail free stays every year. Furthermore, reward points will be offered in the loyalty programs attached to its AUM, and these points can be used to avail free services up to a certain limit. Another utility for token holders of GREM is that those with minimum 100,000 tokens have an option to sell their real estate assets to Global REIT and enter the liquid market in the crypto domain. These tokens can either be bought from the fund manager (GREM) or the open market. The settlement of such acquisition will be done in any cryptocurrency and the capital base will be open ended.

ASSET RETURN

The first asset will be secured on an 8% yield locked in for 5 years. The return will be distributed as follows (before any expenses related to operations are incurred) upon token subscription in the form of dividends:

• Income of GREM token holders will initially start at 2% of AUM and will reduce

by 0.25 % annually over the first three years stabilising at 1.25% thereon

• Income of GRET token holders will be a stable ROI of 8% per annum on its first

acquired asset

GLOBAL REIT SECTOR

The Global REIT sector has grown significantly in the last decade; both in terms of REITs being introduced in new countries, and in terms of an increase in the size of the sector in existing jurisdictions. Data from NAREIT shows that the market capitalisation of the US REIT sector has more than tripled to $1trn in the past 10 years, with the number of REITs growing from 152 to 224. In Europe growth has been slower, but according to EPRA the market cap of the listed European real estate sector has grown by a third in the same period from €150bn to €200bn. In Asia the REIT sector has grown by almost two thirds, from $135bn to $213bn, according to data from Consilia Capital.