The real estate equity crowdfunding space – to date one of the quieter sub-sectors of alternative finance – appears to be heating up.
The largest representative of the sector, Property Partner, has just celebrated its first birthday – and stands a little shy of £19.5m in cumulative investment volume. That total is comprised of the contributions of 5,496 investors. Property Partner allows collections of individual investors to purchase a slice of a buy-to-let property. 147 of these properties have been funded via the platform since its inception.
Property Partner is especially proud of its secondary market. Of the £19.5m invested via the platform to date, £16.1m has flowed into the primary market. A further £3.4m, representing a little under 50 million shares, has changed hands via the secondary market.
In updating the press on its progress to date, Property Partner has been keen to stress the rapidity with which deals been funded. A building in Hanwell, for example, took just 66 seconds to hit a £430k target. The funding for the purchase of a block of 42 flats in Lincolnshire took a mere 10 minutes to source. With a “ten-fold” expansion planned for the coming year, Founder and CEO Daniel Gandesha explained:
“We are scaling the business incredibly rapidly and are on track to achieve our ultimate vision, a global stock exchange for property.”
Elsewhere in the world of real estate crowdfunding, Property Moose has clinched a further £440k in equity money, bringing the to total raised to date to close to £1m. The recent round came from a syndicate of investors that was led by The North West Fund for Digital & Creative. The money will be ploughed into both marketing and technology, with a view to improving the Property Moose user experience. Proeprty Moose has seen £3.6m invested through the platform to date, and boasts about 7,200 registered users.
In tandem with the fundraise, Property Moose has also appointed Darren Schindler, former Managing Director of Business & Commercial Banking at Metro Bank, as Executive Chairman. Mr. Schindler offered comment:
“Property Moose is continuing to raise funds as the business expands and we hope to develop our property portfolio further. This is a growing industry and people are constantly looking for investment alternatives that they can control, which I am confident that we are offering. We have aggressive growth plans and I am delighted to be involved in the company to strengthen its position as one of the leaders within the property crowdfunding space.”
Property Partner and Property Moose operate in a market segment that also features Property Crowd, Crowdahouse, The House Crowd, Mayfair and Morgan, Elevate Invest and Crowd2Let. There’s a good deal of potential in this nascent corner of the market. There’s a certain sexiness to the concept of buying into the property market for just a few hundred pounds at a time. Blending liquidity (or at least the promise of liquidity) with property ownership is all the more compelling a proposition. Will 2016 be the year that real estate crowdfunding comes to the fore?