Tokenisation is increasingly being explored as a way to enhance liquidity and accessibility in real estate investment. In an interview with Paperjam, Jean-Paul Scheuren, CEO of Luxembourg-based LetzToken, discusses Reboost, an initiative aimed at helping developers secure financing while allowing retail investors to participate in real estate projects. Through blockchain technology, Reboost seeks to address funding challenges in the sector by offering fractional investment opportunities, with entry starting at €1,000 and projected returns ranging from 6% to 10%.

Kangkan Halder: Can you introduce Reboost and what inspired you to launch this initiative?

Jean-Paul Scheuren: We see Luxembourg’s real estate market feeling the strain. To keep up with growing demand, the country needs to build between 5,600 and 7,500 homes every year, according to Statec. A huge challenge, with ripple effects well beyond the real estate market.

Prolog was launched six months ago with a €250m budget to help finance 800 to 1,300 new homes, but only one project has received support. Under the initial eligibility criteria, recently revised, developers had to secure 50% (now 30%) pre-sales to access funding, which proved extremely difficult in practice. We figured that our real estate tokenisation platform could play a role in unlocking this bottleneck. So, we launched Reboost. Reboost was born to bridge the gap between Prolog’s objectives and the market’s challenges.

Can you explain how Reboost addresses the 30% pre-sale threshold challenge for developers to utilise the Prolog financing?

Reboost acts as a liquidity bridge by allowing retail investors to participate in early-stage real estate financing through tokenisation. Instead of developers waiting to sell 30% of their units through conventional pre-sales, Reboost tokenises portions of the project and offers them as investment opportunities. Investors can purchase these tokens, representing fractional ownership or financial stakes in the project, helping the developer meet the threshold faster and gain access to the Prolog financing.

How does LetzToken and investment tokenisation play a role in this?

LetzToken provides the blockchain infrastructure and tokenisation model that powers Reboost. Through LetzToken’s platform, real estate investments are fractionalised into digital tokens, making it easier for investors to participate in projects of their choice. Tokenisation enhances liquidity, transparency and security in real estate transactions. Through LetzToken’s technology, Reboost ensures that the investment process remains seamless, efficient and accessible to a broader audience while maintaining strong governance through smart contracts.

Why is the focus primarily on retail investors, and how do you engage with them?

The focus on retail investors stems from LetzToken’s mission to democratise real estate investment. Most of the time, we think property investment is for high-net-worth individuals or institutional players due to high capital requirements and complex processes. Tokenisation allows retail investors to participate with smaller amounts, therefore creating a more inclusive financial ecosystem.

How do you ensure KYC and AML compliance for retail investors?

For know your customer (KYC) and anti-money laundering (AML) compliance, we leverage third-party automated solutions that ensure a smooth yet highly secure verification process that fully complies with regulatory standards. Our process is executed by a PSF trustee company– Opportunity FS.

What kind of returns can investors expect, and how are these calculated?

We estimate between 6% and 10% annual returns, depending on the project and market conditions. Investors will benefit from the revenues that Reboost will generate during the acquisition process. The revenues depend on the period in which the investment is engaged. Investors get fixed interest rates depending on the stage of the construction: retention premium before the notary deed, 6%-10% in the construction phase.

Will the gains be liable to a 20% Luxembourg withholding tax?

Yes, we are integrating a payment agent through an external provider. This integration would allow investors to benefit from the 20% withholding tax framework. Without a payment agent involved, revenue is considered regular and subject to standard taxation.

Like any other investment opportunity, what are the possible adverse outcomes with Reboost? For example, what happens if a promoter goes bankrupt during the construction phase?

All projects will be subject to a guarantee of achievement. So, the bank or insurer will take over in case of the promoter’s bankruptcy. Anyway, Reboost will work with Luxembourg’s best-in-class developers. Moreover, since LetzToken serves as the technical provider for Reboost, and is also responsible for conducting due diligence. All that to say that we take all possible measures to protect investors.

Are any banks supporting your initiative? If so, could you share which banks are involved?

Yes, we are partnering with two of the five banks involved in the Prolog initiative, but we are not in a position to name them.

How do you ensure efficiency and transparency in your real estate projects? Will prospective clients be informed about the projects you are vested in?

Efficiency and transparency are core to LetzToken’s blockchain-driven approach. All transactions, investments and project milestones are recorded on the blockchain and accessible to investors. We also use smart contracts, which automate agreements and ensure that payouts, fund distribution and ownership verification are secure and tamper-proof. Investors can monitor project progress, financial performance and risks via a digital dashboard. Finally, all our tokenised projects adhere to legal and financial regulations, providing additional investor security.

Do you have a target amount or a specific number of projects to achieve? What happens if you raise more funds than planned?

We aim to close ten projects in our first year. We raise funds project by project, so it is unlikely that we will raise more funds than planned. Also, the investor will receive a retention premium of 1.5% to 2% after subscription, even if the capital is not raised. All investments arrive in an escrow account before usage.