MAG Group introduces tokenized real estate investment in Dubai

[myself]

MAG group to tokenize $500 millions worth of real estate with the Mantra DAO crypto project. A new (hopefully easy) way to invest in real estate in Dubai.

https://www.coindesk.com/business/2...real-estate-assets-for-uae-builder-mag-group/

 

[manukahoney]

Easy getting in, not so easy cashing out.
Think of it as a fractional ownership, quite notorious scheme to sell the dream of owning property to non-experiences investors.

Probably they will use an SPV that owns the property rather than offering the ownership directly (ownership details must be in the official register). So you actually get tokenised shares of a company, which is basically a REIT, but with much lower liquidity, obscure voting rights and uncontrolled managing fees.

 

[Martin Everson]

Sounds like another project that may just offer exposure to the price and returns of the real estate but you never actually own any of it. I would need to see the details which seem thin on the ground.

Would be more interesting if they worked with government to recognize that i.e AED 2m purchase of tokens allows you to obtain the 10yr Golden Visa residency permit as if you invested AED 2m directly in real estate. It sounds interesting however people can get 8% yields in crypto without all the complexity they are bringing.

 

[CyprusLawyer101]

Ptobably the only benefit of such schemes is for small investors, who wish to place small amounts like 10kusd and own real estate in the country. If there is some rental yield which actually becomes payable thrn it may be worth it for some. LIquiditiy for on-selling the investment would be low therefore making the investment difficult to exit.

 

[BeyondBorders]

Ptobably the only benefit of such schemes is for small investors, who wish to place small amounts like 10kusd and own real estate in the country. If there is some rental yield which actually becomes payable thrn it may be worth it for some. LIquiditiy for on-selling the investment would be low therefore making the investment difficult to exit.

I must correct: The only party benefiting from all these schemes are the managers behind the schemes.

Admin and Management Fee usually eat extremely into profitability, I have seen single unit apartments administered by SPVs that require accounting, and sometimes even auditing. Managers take their fee home too.

It does not make sense, especially in a Jurisdiction like the UAE, where buying actual property with crypto does not cause an issue (sometimes the only dependency is a terrible, or shall I say incompetent, agent).

Theres another company in the market for quite a while, same issues as described above: Stake – A smarter way to invest in real estate

 

[JimBeam]

Sounds like another project that may just offer exposure to the price and returns of the real estate but you never actually own any of it. I would need to see the details which seem thin on the ground.

Would be more interesting if they worked with government to recognize that i.e AED 2m purchase of tokens allows you to obtain the 10yr Golden Visa residency permit as if you invested AED 2m directly in real estate. It sounds interesting however people can get 8% yields in crypto without all the complexity they are bringing.

Have you checked at Stake (getstake dot com), don't want to advertise them in here. Looks like something like lofty in US.
They do recognize the investment towards the golden visa.

 

[BeyondBorders]

Have you checked at Stake (getstake dot com), don't want to advertise them in here. Looks like something like lofty in US.
They do recognize the investment towards the golden visa.

Better buy a real apartment, or a couple of apartments, and avoid those platforms imo.

 

[JimBeam]

Better buy a real apartment, or a couple of apartments, and avoid those platforms imo.

Agreed.
But this is a great way to diversify across the different areas within the city.
Also it's good for people that do not have the amount to buy a whole apartment so they can buy 5% here ,10% there etc.

 

[Martin Everson]

Have you checked at Stake (getstake dot com), don't want to advertise them in here. Looks like something like lofty in US.
They do recognize the investment towards the golden visa.

Wow....thanks had no idea about them. Just goes to show someone has always thought about same idea before you. That MAG group need to at least match their offering.

 

[PinkCat]

I almost bought a MAG property directly, but after researching them they seem to be quite controversial in Dubai so I backed up.
I imagine they will use the funds to buy their own properties primary and that gives them the opportunity to do so at inflated prices, not saying they will do it but they can and you have to trust them not to.

This getstake dot com looks interesting though. I was very surprised that you can even get a golden visa that way. Can someone tell us more about them? Like if someone has used them and has actual first hand experience?

 

[JimBeam]

I have the account but never used them.
But I have been following what's going on for quite some time out of curiosity.

Here's what I know:

1. They are regulated by the Dubai Financial Services Authority (DFSA). This should be a good sign as Real Estate is a big thing in UAE and it's been closely monitored by the gov to minimize the possible scams.
2. Each newly listed property comes with third party valuation report (that takes into account state of the property as well the prices in surrounding buildings/area or within the same building). I've compared that with what I know and what I can find online on real estate portals (propertyfinder and bayut) and it's pretty accurate I must say. I have tried to attach documents for a single property listed on the platform but I couldn't (won't allow xls files and pdf's are too big 12mb) so I have hosted them here for you to see: GetStake.com – Google Drive - so please do check and let me know what do you think of these numbers/reports.
3. While the returns from rents are in 8-9% the investor gets on average around 5% - 5.5% net. The difference goes towards the platform and various other fees (agent fees, maintenance costs etc).
4. Once you invest in property you will get your Property Share Certificates in about two weeks after the property is fully funded.
5. You can't sell your share for one year after you have invested into a property.
6. After one year you have exit window 2 times a year where you can exit your investment (sell your share). Not sure about the fees about this as you can't see any of this unless you're already an investor (which I am not but was curious to see how many people are exiting, are they exiting with a discount or premium, what are the fees etc).
7. Every now and then some of the properties are sold with a 20-30% premium. So investors would get back the money invested + premium + rents along the way. From what I have noticed all exits were only in Downtown area. None of the properties in other areas were sold (as far as I've been following). The reason for that is that the Downtown properties are great for AirBnB/short term rentals and these guys are only doing long term rentals (1year contracts) so by buying them someone can list them on the platforms as short term rental.
8. They have recently introduced the rent insurance meaning you'll get rent even if they don't actually rent it out.
9. The platform looks really nice and well built and it keeps improving. They also have a good iOS and Android apps. Their FAQ is also quite good: Stake Help Center
10. They are expanding to the Saudi Arabian market soon.

My concerns:

1. Their expected property valuations in next years may not seem real. I think they are expecting 7% annual increase in value. I understand that it's hard to predict the future and I'm at the moment a bit skeptical about the possibility that the increase in real estate prices will continue in Dubai or at the rate we've seen in the past couple of years. That's one of the reasons I was hesitant to invest.
2. Secondly, I was following what has been happening with the platform and I have seen that they are advancing in many areas, so that's good. It's probably a lucrative business so they keep developing it which is good.
3. I was worried that in case of market downturn or anything I couldn't exit my positions. It's so easy to do with stocks or REITs but with this you would have to wait for up to 6 months to get an open window when you can sell your stake. I understand that this is for the long term investors but still this was my concern.
4. Since I already own a property in Dubai (worth about 1M AED) I can't mix it with Stake to get a Golden Visa. I can either buy one another property for 1M or invest 2M AED with Stake to get a golden visa. So that's also one limiting factor for me.

 

[Martin Everson]

The platform looks really nice and well built and it keeps improving. They also have a good iOS and Android apps. Their FAQ is also quite good: Stake Help Center

This is the part I looked for below and it seems good.

https://help.getstake.com/en/articl...e-measures-in-place-to-protect-my-investments
They seem fair and transparent so far and platform looks sorted. And they have a decent auditor - Grant Thornton.

https://www.difc.ae/business/public-register/public-register-details?companyId=0010J00002AZrGyQAL

 

[PinkCat]

I have the account but never used them.
But I have been following what's going on for quite some time out of curiosity.

Here's what I know:

1. They are regulated by the Dubai Financial Services Authority (DFSA). This should be a good sign as Real Estate is a big thing in UAE and it's been closely monitored by the gov to minimize the possible scams.
2. Each newly listed property comes with third party valuation report (that takes into account state of the property as well the prices in surrounding buildings/area or within the same building). I've compared that with what I know and what I can find online on real estate portals (propertyfinder and bayut) and it's pretty accurate I must say. I have tried to attach documents for a single property listed on the platform but I couldn't (won't allow xls files and pdf's are too big 12mb) so I have hosted them here for you to see: GetStake.com – Google Drive - so please do check and let me know what do you think of these numbers/reports.
3. While the returns from rents are in 8-9% the investor gets on average around 5% - 5.5% net. The difference goes towards the platform and various other fees (agent fees, maintenance costs etc).
4. Once you invest in property you will get your Property Share Certificates in about two weeks after the property is fully funded.
5. You can't sell your share for one year after you have invested into a property.
6. After one year you have exit window 2 times a year where you can exit your investment (sell your share). Not sure about the fees about this as you can't see any of this unless you're already an investor (which I am not but was curious to see how many people are exiting, are they exiting with a discount or premium, what are the fees etc).
7. Every now and then some of the properties are sold with a 20-30% premium. So investors would get back the money invested + premium + rents along the way. From what I have noticed all exits were only in Downtown area. None of the properties in other areas were sold (as far as I've been following). The reason for that is that the Downtown properties are great for AirBnB/short term rentals and these guys are only doing long term rentals (1year contracts) so by buying them someone can list them on the platforms as short term rental.
8. They have recently introduced the rent insurance meaning you'll get rent even if they don't actually rent it out.
9. The platform looks really nice and well built and it keeps improving. They also have a good iOS and Android apps. Their FAQ is also quite good: Stake Help Center
10. They are expanding to the Saudi Arabian market soon.

My concerns:

1. Their expected property valuations in next years may not seem real. I think they are expecting 7% annual increase in value. I understand that it's hard to predict the future and I'm at the moment a bit skeptical about the possibility that the increase in real estate prices will continue in Dubai or at the rate we've seen in the past couple of years. That's one of the reasons I was hesitant to invest.
2. Secondly, I was following what has been happening with the platform and I have seen that they are advancing in many areas, so that's good. It's probably a lucrative business so they keep developing it which is good.
3. I was worried that in case of market downturn or anything I couldn't exit my positions. It's so easy to do with stocks or REITs but with this you would have to wait for up to 6 months to get an open window when you can sell your stake. I understand that this is for the long term investors but still this was my concern.
4. Since I already own a property in Dubai (worth about 1M AED) I can't mix it with Stake to get a Golden Visa. I can either buy one another property for 1M or invest 2M AED with Stake to get a golden visa. So that's also one limiting factor for me.

This is the kind of answers that make me happy to be part of this forum! Millions thanks for the great and detailed answer, it is really really appreciated!

 

[alley]

MAG group to tokenize $500 millions worth of real estate with the Mantra DAO crypto project. A new (hopefully easy) way to invest in real estate in Dubai.

https://www.coindesk.com/business/2...real-estate-assets-for-uae-builder-mag-group/

How secure are they as an investment?

 

[Lord Palmerstone]

I also have many small property investments in Stake, and also another similar platform called Smar-tC-r-owd - look them up- both quite professional operations. This way you can invest in the secondary used market, i.e. existing buildings, and not the fantasy ideas of the future.
MAG are just another developer like DAMAC (the bane of my life), EMAAR, SOBHA, BINGATTI and AZZIZI etc ............ all with reputations similar to 2nd hand car salesmen ...................

 

[alain]

Better buy a real apartment, or a couple of apartments, and avoid those platforms imo.

where could you do that with crypto also in Dubai ?

 

[BeyondBorders]

where could you do that with crypto also in Dubai ?

Plenty of OTC Desks available that issue Managers Cheque.

 

[JimBeam]

Stake has just published their H1 2024 report
https://drive.google.com/file/d/1UTvel6KXRbpQNPk1uiW6TDu--HMMoUAs/view
It's interesting to see that their investors:

We secured $14M in Series A funding from some of the most prominent
regional investors including MEVP, Wa’ed by Aramco and Mubadala
Investment Company, a testament to the confidence our investors and
stakeholders have in our vision.

Aramco is Saudi oil company and Mubadala is UAE investment fund - so their main supporters are UAE and SAR govs.

 

[alain]

How reputable is the company providing that service and on a scale from 1 to 10 how risky would you say an investment like this is for someone not considering to visit the country?

 

[jafo]

How reputable is the company providing that service and on a scale from 1 to 10 how risky would you say an investment like this is for someone not considering to visit the country?

I wouldn't do it, personally. I've seen too many real estate nightmares, and real estate is a huge target for many "thieves." With the signature of any judge, our real estate can be auctioned off to settle a debt others may have incurred.