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Digital real estate investment platforms launch trade association, aim to establish market standards

Today, seven digital real estate investment platforms in the UK and Europe announced joining to launch an international trade association to ensure investors can accurately evaluate investment opportunities and risks, according to a press release shared with FinLedger.

The Association of Real Estate Investment Platforms (AREIP) was launched by seven founding members, including BrikkApp, British Pearl, Max Crowdfund, Occollo, Reinvest24, Shojin Property Partners and Simple Crowdfunding, with the goal of establishing common market standards in a digital real estate market that is accelerating at breakneck speed.

Cambridge University’s Centre for Alternative Finance (CCAF), which has tracked the development of online alternative finance markets, found that the average year-on-year growth for these investment platforms was 63% between 2016 and 2019.

It also found that if the market continues its trajectory, it is set to reach $309 billion by 2027, highlighting the ongoing rapid growth of the digital real estate sector.

The association says that standardization will help investors understand and compare investments, help form the foundation for a centralized marketplace and facilitate liquidity that can offer investors a wider variety of digital real estate opportunities.

“In the global capital markets Bloomberg manages a database for securities descriptions and data, S&P provides the market with securities risk ratings, and a multitude of trading exchanges help connect market participants to generate liquidity,” AREIP stated in the release.

“All these services are essential for the efficient functioning of securities markets. AREIP, together with its members, would like to help establish a similar market foundation for the online real estate investment market with the final goal of achieving mass market adoption and increased liquidity. We see the steps to achieving this goal as follows: Step 1 – Collaboration; Step 2 – Standardisation; Step 3 – Marketplace,” the association added.

All founding members seek standardization in four key areas, including terminology, investment descriptions and data, risk scoring, and operations (including technology), according to the release.

The seven founding members will also be joined by five real estate platforms at launch, from Spain, Dubai, India and Latvia, with an expectation of imminent further growth.

“We are on the cusp of enormous growth in this nascent market, and it is the responsibility of all participants to adopt high standards and transparency, which will in turn engender trust and lead to mass market adoption,” AREIP noted in the release.

In other recent proptech news, SmartRent acquired maintenance service platform SightPlan for $135 million. Tishman Speyer also locked in $100 million for its debut proptech fund.

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