If there is one area of crowdfunding where we consistently hear about unfilled, robust demand, it is Asian money looking to invest in high-quality real estate beyond the borders of their native country. While some real estate markets may be getting a bit hot, real estate as an investment class continues to perform well. Even if (or when) a dip occurs, in certain international markets the demand for real estate should remain rather strong for quite some time into the future.
is a platform that seeks to match this demand with a supply of “exclusive investment opportunities” to the registered members of the platform. InvestaCrowd states it will only work with reputable developers with a strong track record to provide access to finance on their platform.
Recently Crowdfund Insider spoke with Marc Reven ( Sale Director ) to better understand his perspective and expectations for Realty Access Dividend Club and the future of real estate crowdfunding.
We also started a hotel management company to manage the Nest hotel Chain zand other developers in Europe(for reference hotel management is a terrible business unless you have massive scale). Most of the businesses have been related to real estate investment.
Crowdfund Insider: When did you decide to launch Realty Access Dividend Club?
Crowdfunding is just beginning in Asia, but we think it will eventually explode and surpass USA and Europe. Exciting times. Where we have been running for several years.
Realty Access Dividend Club: Asia is a complex and diverse market, and it is somewhat impossible to just bundle all these countries into a single category. That being said, you have two types of markets. Vietnam/China/Hong Kong and Singapore, which are developed markets with clear rule of law and protection for investors. They are also some of the most expensive real estate markets in the world, so there are no returns and hardly any projects unless you have huge money to invest. Then you have all the other countries, Cambodia, India, Vietnam,Thailand, Indonesia etc….which are completely opposite to the developed Asian countries. Their dynamic’s are very different in that there are many real estate investment “opportunities” but the rule of law is opaque, investor protection is weak and finding good trustworthy partners a huge challenge. Ownership laws for foreign investors are also complex, complicated so we use a Trustee to remove the risk , Our trustee is Fairoaks which have been in business for over 20 years. So you have a situation in both types of countries where investors are seeking good quality transactions but face huge challenges to execute. Currently we have investors from 25 countries but with the majority of demand coming from China, Japan, Hong Kong, Singapore and Indonesia.
We look for developers with the right track records in the locations we like. We are starting with simple residential and commercial projects, but envisage projects on our platform across all development types, industrial, student accommodation etc.
It is all about the developers running the project and they must have some scale so they can weather a downturn or any dips in the market or project. We also only work with companies who we think value their reputations above anything else, so they would choose to personally lose money and still deliver a project for investors, rather than take a short term gain and leave investors hanging by running off into the sunset. Developers also need to understand how this all works, we wrote this to help them out: What developers should consider to begin crowdfunding.
We are looking to offer risk-adjusted returns in both debt and equity positions. It is too early to focus on just one type of deal, and Asian investors are much more opportunistic than their USA counterparts. We have successfully funded equity deals in Sydney and New York and launching some London projects now.
Finding good product has also taken a long time and we are extremely cautious about the types and quality of deals we are listing. We are quality over quantity and that has taken time to build. There are other platforms in Asia selling hopeless and risky real estate we would not touch with a 10 foot pole (i.e apartments in Cambodia and Myanmar, which in fact is not even crowdfunding but just Groupon for apartment buying, but in a nascent industry with a confused audience, they seem to get away with it, and people are buying.
Crowdfund Insider: You offer both debt and equity opportunities. Are you doing more debt or equity deals?
We just started launching deals and have funded equity deals to date, debt deals are in the pipeline.
Yes, anytime regulators and government are behind changes to help grow an industry it is a good thing.
Singapore has been the financial capital of South East Asia for many years and they will undoubtedly own the fintech capital of SEA tag too. We also think now that China has taken over Hong Kong, many businesses will migrate from HK to SG over the coming years due to better regulatory and business opportunities. Hong Kong has lost its key value proposition, which was the doorway to China, because now you simply go directly to Beijing or Shanghai if you want to business in China. There is no government in the world that is more behind the startup scene than the Singapore government, they are extremely progressive and intelligent and are leaps and bounds ahead of anyone else we can see. The regulators have even set up a $225 mil fund to invest into the industry – here, that thinking and commitment is truly light years ahead of places like Australia.