Tyran Faber – Co-Founder of Brix
Start-up property tokenisation company, Brix, is, according to Co-founder Tyran Faber, redefining the perception of real estate in South Africa.
He states that Brix is set to disrupt conventional methods of investing in property and create ease of access to property investing to all. Their pioneering platform presents a new era of property purchase and exchange in South Africa, and will according to Faber make property investment a reality to a wider section of society by breaking down financial barriers by enabling fractional ownership of properties a reality on their trading platform.
“Brix provides a secure and innovative environment for property investment,” he says, “By digitising and dividing tangible assets into digital tokens, we enable fractional ownership, increased liquidity, and seamless transferability for investors. This platform is a game-changer, allowing individuals from all walks of life to participate in the property market without the usual financial constraints.”
The platform allows individuals to enter the property market with minimal investment, starting from as little as R100, thus democratizing access and creating new opportunities for a broader audience.
The Details
Business Tech Africa spoke to Faber to get further details on the structure of the company property portfolio and what costs and returns investors should be anticipating.
With Property prices stagnant we asked Tyran how the company viewed the property market in South Africa and where he believed the value lay.
He believes that there is still value in certain segments of the house market and that they currently had 2 existing properties that they were raising funds for that held good return prospects. “It all comes down to buying in the right areas and where there is demand for properties” he comments. “Although there has been a slowdown in property prices, one can still find value in high demand developments”.
The investment projects available on the Brix platform are according to Faber, sourced by a seasoned team of property professionals, ensuring access to high-quality investments. The company currently has two investment portfolios, with their Flow Fund looking at longer term rental property income while the other Flip Fund, will concentrate on creating more immediate returns with quicker sell-type property investments.
How the investments work
The properties purchased by Brix are all transferred into a special purpose vehicle (SPV), which is an orphan company created to isolate risks and reallocate assets to investors. The SPV will own the property and also be the vehicle via which investments and if required finance is raised for the property. It takes 60 days from purchase till when the properties are made available for investors via token wallets. The property is then “tokenised” and the tokens offered to potential investors via their partner, SchindlersX investment App. The token holders will all have voting rights as “shareholders” in the SPV, as non-executive partners
“Tokenizing assets enables investors to participate in previously inaccessible opportunities such as student accommodations, real estate properties, infrastructure and more by creating user-friendly, straight-forward processes for novices to seamlessly navigate the property investment landscape,” explains Maurice Crespi from SchindlersX.
Cost Structure: There is an initial 1% fee on the fund raising as well as a 1% trading fee which will operate on a sliding scale dependent of the volume of tokens purchased, plus a fee on sale of tokens.
Expected returns: Faber states that they anticipate at least 10% return on their longer term Flow Fund, and between 18%-20% return on their Flip Fund. There is also a minimum investment period that ranges from 12 months to 2 years.
The concept is certainly ground breaking and Brix has positioned itself to shift the traditional mindset around real estate investment, providing a seamless way to invest in a diverse property portfolio. Faber also anticipates the company looking to invest in property beyond the South African landscape in the future, believing there is much value in other areas of Africa that they are keen to expand into.
