[Interview] "Real estate crowdfunding, a real asset for the sector!"
February 19, 2021
Raizers is one of the Top 5 French crowdfunding platforms. It is a real estate investment platform that allows to lend directly to real estate developers or property dealers. It prepares bond issues and offers them to different investor profiles, such as individuals who can subscribe directly on the platform or investors intermediated by wealth management advisors and partner family offices. One third of the platform's investment volumes are made through intermediary investors. Raizers also has its own investment fund which co-invests in the transactions.
How does it work? Raizers proposes to an individual investor to allocate a small investment pocket that will allow him to obtain yield, while making short-term investments. The platform allows the marketing of unlisted bonds. The nominal value of the bonds does not change during the term of the loan. The coupon served annually is between 8 and 10% profitability on average and the default rate is almost nil for the bonds issued.
In 2020, the volume of investments on the platform doubled, despite a turbulent year, to reach 46 million euros of investments made during the year. This represents more than 50 operations financed, more than 1,000 homes created or renovated on average investments of 800,000 euros.
The demands of developers and property dealers did not stop in 2020. Delays have been noted, but they are specific to the activity, as developers are having difficulty making progress on their sites. There have been some impacts of Covid on the activity: less staff allocated to the sites, delays in marketing. However, if some bonds reach maturity without being repaid, they continue to generate interest. The risk is not zero, but the challenge for each player is to select the operations considered to be the most interesting and to take the best guarantees on the operations, such as personal guarantees, first demand guarantees on holdings, but also registered first mortgages, in order to reinforce the credibility of the operations.
Raizers recently launched a new business, Raizers Transactions, which offers support in the marketing of property from developers and which is also of interest to investors who want to buy a property, make a Pinel investment, in land deficitetc.
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