Great Keppel Island will be divided into small lots and sold off under a cryptocurrency scheme which allows investors to buy tokens to fund its redevelopment.
Owners Tower Holdings want to return the iconic Queensland holiday destination to its former glory after a decade of stalled planning developments and bitter local division over its future.
The company paid $16.5 million for the resort island in 2006 but the global financial crisis hit shortly afterwards, followed by damaging storms which have left much of the former holiday mecca’s tourism infrastructure dilapidated.
Tower Holdings listed its revitalisation project for sale earlier this year after failing to attract private investors since gaining building approvals in 2013.
Now the developer has partnered with a Sydney-based cryptocurrency consortium to fund the $300 million scheme, which is expected to increase the island’s value by $1 billion.Many locals remain concerned about the size of the development proposal, which includes an airstrip, marina and Greg Normal-designed golf course as well as 250 beachfront rooms, 700 luxury villas, a casino and a research centre.
Tower is inviting anyone to buy a piece of the island, via a token, using blockchain technology. Once the set number of tokens is sold, the money made will fund the revitalisation work.
Standards Australia blockchain technical committee member Philippa Ryan said it was a “brilliant” move that appeared to have the backing of Australian regulators such as ASIC and the ACCC.
“Security token offering is a clever new name for this particular type of fundraising model, because it clearly indicates the type of crypto token to be issued; it is a security token,” she said.
“This is much easier for ASIC to regulate than initial coin offerings, which do not issue coins at all.”
A promotional video invites potential buyers to “acquire the greatest gem on earth”, calling the scheme a “true once in a lifetime opportunity, the likes of which may never come around again”.
Over the next week, investors are invited to register their interest in the Great Keppel Island tokens (GKITs). Tower Holdings will keep 12 per cent of the GKITs and the tokens will be able to be traded on any crypto exchange platform.
A white paper will be released this week but the marketing campaign is already in full swing, with Tower claiming its scheme is supported by all levels of government.
The company believes mum-and-dad investors will be attracted to the offer, which allows them to buy a smaller-than-normal piece of land at a more affordable price.
But even if it does attract enough funding, Tower faces a difficult task in creating and maintaining its new development.
Offshore tourism ventures around the Great Barrier Reef are notoriously expensive to run and hard to staff and maintain because of their limited accessibility to the mainland, supply issues and their exposure to cyclones.