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First residential development to be sold in bitcoin is located in Dubai

September 8, 2017

An apartment and commercial development in Dubai has become the first in the world to offer buyers the option to purchase with bitcoin. Photo: Chris Ratcliffe/Bloomberg

Gertrude Chavez-Dreyfuss

The Knox Group of Companies, with headquarters in the Isle of Man, announced this week that it will launch a residential and commercial property development in Dubai valued at £250 million ($407 million), with residences that can be purchased in the digital currency bitcoin.

The company said the 22.3-hectare 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 towards efforts to push bitcoin into the mainstream. Maligned and ridiculed in its early days, bitcoin hit a record high of $6077 on September 1, surging more than 400 per cent so far this year. However, following a decision by the Chinese government to ban initial coin offerings (ICOs), a token-based method of fundraising for technology start-ups, it crashed more than $1000 to $5038 on Tuesday, before regaining some ground.

Images of the apartments that buyers can purchase with bitcoin. Photo: Instagram Images of the Dubai development. Photo: Instagram

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

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

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

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 in an interview that her interior design company will do the interiors of the apartments.

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

Mr Barrowman said the current popularity of ICOs had shown that there was 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 $US250,000 ($, Mr Barrowman said, while two-bedrooms can be bought for 80 bitcoins, or $380,000.

Essentially, the apartments will be offered at a 15-20 percent discount, Barrowman said.

There will be 1133 apartments; 480 have already been sold in traditional currencies and the remaining will be earmarked for bitcoin holders, Baroness Mone said.

with Antony Lawes

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