Australian property development lending gets a boost with the launch of the UK’s CrowdProperty
Australia’s small-to-medium property development sector has received a lending boost with the launch of specialist non-bank lending alternative CrowdProperty.
A UK fintech / proptech hybrid, CrowdProperty matches investors — wholesale investors, SMSFs, institutional lending groups — with developers of high quality, small-to-medium-sized residential property projects via its bespoke platform and in-house property development expertise.
As a marketplace or peer-to-peer lending platform, it offers property developers access to fast, transparent funds, and investors a simple way to earn up to seven percent target interest returns* on short term investments secured by first mortgage, typically paying back in 12 to 18 months.
CrowdProperty UK Co-Founder and CEO Mike Bristow said the model they’ve proven with great success in the UK was a perfect fit for the Australian market.
“We’re a company founded by people who have long experience developing property and working in the finance sector,” Bristow said.
“We’ve built the business entirely around the customer. We intimately know the pain developers experience when trying to fund projects and have built a lending business to deliver speed, ease and certainty of funding for these developers, who can spend up to a third of their time working to source project finance.
“At the heart of the business is a technology platform for efficiency, and property finance and development expertise for effectiveness. We deliver a better deal for all, including the economy, by unlocking more housebuilding.
“Since launching in the UK, we’ve lent over £112 million ($200m) to property developers, funded the construction of over 1,150 homes worth over £220 million ($400m), and delivered a 100 percent capital and interest payback to investors over six years of lending. CrowdProperty UK is the UK’s leading specialist property project online lending platform and we see even greater potential here in Australia. Property development and investment is a national obsession in Australia, and rightly so. Our job is simply to serve this passion by making it easier to develop and invest in property.”
CrowdProperty Australia Co-Founder and CEO David Ingram said the opportunity for Australian savers to invest in a fund providing development project loans was significant.
“Australia’s projected population growth means we have to build over 32 thousand houses per year for the next 20 years,” Ingram said.
“Our solution matches investor capital more directly to the developer using it to add value, enabling greater returns, meeting the major needs of both sides of the marketplace.”
Launching with its first development project already fully funded — a development of two premium co-living boarding houses in Melbourne’s Glenroy — property developer Cheryl Leong said the CrowdProperty lending model was much faster than bank lending and felt more like a partnership.
“Co-living developments are a fast-growing opportunity in Australia,” Ms. Leong said.
“Despite that, it’s not necessarily a project that traditional lenders are interested in or understand, or at least not with an affordable LVR,” she said.
“The CrowdProperty borrowing team assessed the project directly and funded it within weeks of us joining the platform. They were able to bring wholesale investors together in a way small developers can’t always do, and provide finance at an agreeable rate.
“CrowdProperty is in partnership with us to see us succeed for their investors’ return. I can see this being a sustainable community of investors and developers as it grows, funding high quality homes across Australia.”
Founded in the UK in 2013, CrowdProperty has launched in Australia through a locally funded joint venture. CrowdProperty Australia’s launch is funded by a select group of domain-experienced investors ranging from property development, property professionals, financial services, lending, fintech, technology, and marketing. The Australian company will raise a further seed round of funds in the second quarter of 2021.