New crowdfunding deal opens property developments to investors
VentureCrowd, Australia’s original and most successful equity-based crowdfunding platform, and end-to-end residential property development company Clearstate, today announced the completion of an innovative crowdfunding 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 in Australia that investors have been able to invest in the equity of a property development before it is subdivided and sold. This enables higher potential returns on their investment in a shorter timeframe.
The partnership between VentureCrowd and Clearstate provides 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 $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. The targeted returns for investors exceed 100%.
“We believe this is the first online platform based equity raise for a residential subdivision in Australia,” said Rob Nankivell, CEO of VentureCrowd. “Crowdfunding has raised an estimated US$2.5 billion for real estate globally and is only expected to grow substantially in the future.”
“Though Australia is lagging behind the world when it comes to innovative funding mechanisms, the Riverstone East project proves that 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. We expect this to continue with a number of similar investment opportunities in the coming months.”
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.
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. Clearstate 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. Committed to minimising the impact on the environment, Clearstate creates distinct sustainable designs for families and the broader community.
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.
“After undertaking several property subdivisions across Sydney and Melbourne we looked at the Riverstone project as an opportunity to provide investors with an avenue to access projects and potential returns they otherwise couldn’t access on their own,” said Lachlan Cameron, Commercial Director of Clearstate.
“It is exciting to see property crowdfunding of this type in Australia as it has had a lot of success overseas. VentureCrowd has the intellectual property and experience in both investment and property. 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.
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VentureCrowd is Australia’s first and only online investment platform for alternative assets, providing unrivalled access to equity-based crowdfunding for startups, property and credit. VentureCrowd has raised more than $14 million for high-growth Australian startups since launching in late 2014. This includes completing Australia’s largest ever equity crowdfunding raise of $4.2 million for mobile payments startup ingogo. VentureCrowd provides members with access to deals that wholesale investors have traditionally been locked out of, all verified and vetted by a network of partners to ensure we offer the most diversified selection of investment opportunities.
VentureCrowd is powered by Artesian Venture Partners Pty Ltd, one of Australia's leading early stage venture capital firms.
Clearstate is an end-to-end property development company that manages projects from acquisition to delivery.
Founded in 2011, Clearstate has successfully completed developments in Sydney and recently expanded to Melbourne. In 2013, Clearstate joined the DNW Group and had since secured a development pipeline in excess of $150m dollars. In every aspect of the Clearstate strategy it is about offering a superior place to live for its customers, delivering environmentally sustainable homes and lifestyles is at the heart of what we do.
For more information on Clearstate or DNW Group visit www.clearstate.com.au/2017 or www.dnwgroup.com.au
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