Real estate financing via crowdfunding is gaining significant momentum in Germany, according to new research from Flatow Advisory Partners (FAP).
Of the 47 deals counted by the report since 2012, 60% were completed in 2016 alone. These included deals where participants were allowed to invest as little as €10.
'Being a young, fast growing market segment, crowdfundingis an exciting alternative. This new form of investment is going to evolve as an independent market for subordinated capital,' commented Jörg Scheidler, managing director of FAP.
The report shows that while this kind of financing is still in its infancy in Germany, the last two years have registered interesting capital flows.
In 2015, eight platforms achieved a combined investment volume totaling €22.7 mln across 16 completed deals. Some €17.5m - or 77% - of this was arranged via only three platforms.
The capital invested across seven crowdfunding platforms in 2016 to date totals around €19.1 mln with 28 completed deals. Again, €15.3 mln of this (80%) was arranged via only three platforms. According to the data, the average crowd capital volume per deal to date is approximately €0.6 mln.
By the end of 2016, FAP forecasts an investment volume totaling around €28 mln which produces an estimated implemented market value volume of €335 mln.
To date, crowdfunding platforms have focused on the residential sector, but the study shows that this should change. Offices, retail, logistics, nursing homes and student/microapartments will be increasingly considered.
Preferred risk classes, says the report, are development projects, modernisations, refurbishments and value-add scenarios.
