x Abu Dhabi, UAEFriday 24 November 2017

Dubai property venture with homes to buy using bitcoin

Aston Plaza and Residences said to be the first major real estate development that will accept the digital currency as payment

Bitcoins will be able to be mused to buy homes in new Dubai development. Benoit Tessier/Reuters
Bitcoins will be able to be mused to buy homes in new Dubai development. Benoit Tessier/Reuters

The Knox Group of Companies, with headquarters in the Isle of Man, announced late on Tuesday it will launch a residential and commercial property development in Dubai valued at £250 million (Dh1.19 billion), with residences that can be purchased in the digital currency bitcoin.

The company said the 2.4 million-square-foot property venture called Aston Plaza and Residences, consisting of two residential towers and a shopping mall, will be the first major real estate development that will accept bitcoin as payment.

The Dubai project is one step toward efforts to push bitcoin into the mainstream. Maligned and ridiculed in its early days, bitcoin hit a record high of US$4,870 on Friday, surging more than 400 per cent so far this year.

The whole project is expected to be completed by late 2019.

“This a great opportunity for the cryptocurrency community to offload some of its significant gains, especially the early adopters, and actually deploy them in hard-core assets which I'm building,” said Knox’s chairman, Doug Barrowman.

Mr Barrowman, originally from Scotland, in 2008 founded Knox, which engages in private equity, property and wealth management. The company manages £1.5bn in assets, he said.

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The Dubai venture is a collaboration with Baroness Michelle Mone, a member of the House of Lords and founder of the lingerie company Ultimo. Ms Mone said her interior design company will do the interiors of the apartments.

The bitcoin payments platform BitPay will process the bitcoin transactions. The company already provides bitcoin payment tools to companies such as Microsoft and Sir Richard Branson’s space venture, Virgin Galactic.

Mr Barrowman said the current popularity of initial coin offerings (ICOs), a token-based method of fundraising for technology start-ups, has shown that there is huge demand for crypto-investors to diversify their assets.

Studio apartments will start in price from 33 bitcoin and, mirroring ICOs, early investors will be given additional bonuses, Mr Barrowman said. Packages for interior design services and furniture can also be purchased in bitcoins.

One-bedroom apartments can go for about 54 bitcoins, or $250,000, Mr Barrowman said, while two-bedrooms can be bought for 80 bitcoins, or $380,000.

Essentially, the apartments will be offered at a 15 to 20 percent discount, he said.

There will be 1,133 apartments; 480 have already been sold in traditional currencies and the remaining will be earmarked for bitcoin holders, Ms Mone said.