An equity crowdfunding company has signed a memorandum of understanding with one of Australia’s biggest property groups, with a trial of the new platform to occur in conjunction with two Sydney developments.
VentureCrowd Property signed the agreement with Mirvac Group at the end of April, with two apartments, one each at the developer’s latest apartment projects in Bondi Beach and Harold Park, designated as the trial sites.
VentureCrowd Property is an offshoot of VentureCrowd, a company backed by Artesian Venture Partners.
The company states that the platform enables wholesale investors to “build a portfolio of properties from as little as $100”.
"Property crowdfunding models have flourished internationally, enabling investors to diversify their property portfolio with smaller amounts of committed capital," the company said. "The investment method also allows investors to build a portfolio without having to purchase entire properties, while providing greater control and choice over their portfolio, compared to traditional Real Estate Investment Trusts."
Launched in 2013, VentureCrowd claims to have seen “hundreds of investors” invest more than $2 million into expanding technology companies such as Ingogo and Fame & Partners.
The launch of VentureCrowd Property follows the February launch of online property share platform Brick X.
Similar to Brick X, VentureCrowd Property will not be available to retail investors due to legislative restrictions.
VentureCrowd chief executive office Jeremy Colless anticipated that this would change at some point during 2015, enabling younger investors to gain a share in burgeoning capital city markets.
“We expect to see legislative changes in 2015 which will allow crowdfunding investment opportunities to be extended to retail investors, particularly as rising property prices make it more difficult for younger investors to enter the market,” Mr Colless said.
Mirvac’s residential development chief executive officer, John Carfi, explained that the move would allow the company to assess the merits of the platform.
“As part of our mandate to innovate we have agreed to provide two apartments from our popular Sydney projects to the trial, enabling us to better understand the ins and outs of crowdfunding,” Mr Carfi said.
Eligible investors can apply to be considered for the scheme now.