Australia’s first and only equity-based crowdfunding platform VentureCrowd has teamed with residential property developer Clearstate on a deal that raised in excess of $900,000 for a major residential property development in Sydney.
Unlike more typical property crowdfunding deals which see investors buy equity in single homes or apartments, this is the first time Australian investors have had access to the equity of a property development prior to it being subdivided and sold.
The partnership between VentureCrowd and Clearstate provided eligible investors with unique access to equity in the $13.4 million Garfield Road property development in Riverstone East, located 45 minutes north-west of Sydney.
The project is due for completion in mid-2017.
The innovative funding method, facilitated through the VentureCrowd platform, provides eligible investors with access to unique opportunities, while developers such as Clearstate can raise equity from a new form of alternative financing.
VentureCrowd CEO Rob Nankivell says the approach enables higher potential returns on investments in a shorter time frame.
"The $900,000 funding round gives investors a total of 49 per cent equity in the residential project, where the block of land will be subdivided for 35 new homes," Nankivell says.
"The targeted returns for investors exceed 100 per cent.
“We believe this is the first online platform based equity raise for a residential subdivision in Australia,” he adds.
Nankivell says Australia is lagging behind the world when it comes to innovative funding mechanisms, however he maintains the Riverstone East project proves wholesale investors are not.
"Wholesale investors are ready and willing to invest and gain access to alternatives within the Australian property sector at an early stage on an aligned basis with the developer," he says.
"We expect this to continue with a number of similar investment opportunities in the coming months.”
The Riverstone East project is the latest in a number of alternative asset class investments offered on the VentureCrowd platform, which has previously raised more than $14 million in funding for startups and high-growth companies.
VentureCrowd recently launched a credit offering giving wholesale investors access to the Artesian Australian Corporate Bond Fund at institutional fee structures.
Clearstate is a member of the DNW Group of companies, an organisation that focuses on property and care, and the natural correlation between physical assets and services used by everyday people.
Commercial Director Lachlan Cameron says the company believes in the 'Australian dream' of home ownership and is always looking for unique and innovative ways for people to enter the market, be it individual or investor.
"It is exciting to see property crowdfunding of this type in Australia as it has had a lot of success overseas," Cameron says.
"Clearstate’s land subdivision expertise, combined with VentureCrowd’s agility to provide access to funds and investors, is a recipe for project success. We expect this to be the beginning of a long and successful partnership.”
Clearstate and VentureCrowd are exploring further investment opportunities in the upcoming months.