Amid the global pandemic, the positive trend from last year continued unaffected in the property sector, which favored the founding of new platforms. An area leaving a social imprint is urban regeneration where property combines social interest. Crowdfunding lending provides new opportunities to make sure that the survival of such economic activities that are severely slowed down by the pandemic is guaranteed.
The coronavirus pandemic shows a freshened-up face of pooling funds that never stopped drawing ventures and investors for both financing and equity, even during the restrictions. Naturally, the changing marketplace trends pushed investors to search for alternative financing as well.
There has been a robust push toward digitization in this period, according to Alessandro M. Lerro, president of the Italian Association of Equity Crowdfunding (Aiec). New platforms popped up during lockdowns, noticeably in the property branch, which will be launched by summertime.”
There’s been interest in a social aspect or a sustainable approach during 2019. The newest such venture is Mamacrowd, the first Italian equity crowdfunding platform to support G311 – Green Living, the initiative that proposes a modern post-lockdown housing model (gardens, large spaces, community services) and aims to raise up to $4.94 million ( € 4.4 million).
Now, sustainability is the buzzword. People are beginning to think about eco-effects and there are projects going in that direction. Think of the financing of the tax bonus, for example, which allows you to recover energy efficiency expenses, explained Lerro. The Dl increased relaunch for 110 percent. Companies can’t count on a down payment any more. Crowdfunding lending projects are therefore being set up to support companies working in energy efficiency by funding the initial part of the work. This type of initiative is part of the impact because it impacts the environment and the social fabric positively.
An area with a social impact is urban regeneration where the component of immovable property combines social interest. Redevelopment processes will have room as long as there is an underlying business model favorable to retail investors with a limited risk appetite and needing some return. Now a redevelopment project is much more fascinating if the developer stays in the area the project focuses on himself. The return is not just a financial return: that investor knows that his investment is experiencing a relapse near his territory. For example, we’re seeing loans projects in the energy sector that have to do with communities.
It is precisely the communities of energy which will be at the center of a transition sponsored by the new European directives. There are societies where it shares energy generation and/or consumption. They will also enhance flatfome territories as Ener2crowd proposes investments with a differentiated rate of return based on whether or not the investors are in the position where the intervention takes place.
Crowdfunding lending also offers new opportunities to ensure the survival of those economic activities severely penalized by the pandemic. We are beginning to think of an interesting profile of the crowd economy, which is not only a financial phenomenon but also a marketing phenomenon, Lerro continued. One of the industries most affected by the Covid19 crisis is the catering industry. Imagine a restaurateur wants to relaunch the company with funding through the crowdfunding platforms. He could set up a campaign not only to raise money against interest rates, but also on investor loyalty, which can be his customers, his local community. It could create an engagement with a beneficial effect going beyond mere borrowing but having a positive impact on the territory.
The Property Race
Over these months of the year the bullish trend in properties from 2019 carried on with no problems, which in fact favored the inception of novel crowdfunding sites. The latest Bridge Asset and others are set to be launched, in equity and lending terms.
Lerro explained they used lockdowns to work on new platforms which will be introduced to the public. Projects have gone up considerably, mostly in the real estate sector. We are creating an offer with projects which are more organized and better described. You should expect more and more insightful and more in-depth platforms as not only the market is increasing, but also the degree in terms of both the investment sum and the investor’s maturity. “Lerro cited Finnovia ‘s Italian equity record set on the Backtowork24 platform: a $8.54 million (€7.6 million) campaign in collaboration with Intesa Sanpaolo. Around $33,700 (€30,000) was the largest investment.
Both the market and the bid are growing. This is due to the fact that investment in real estate is easier for the retail investor to understand unlike other areas such as technology and the risk is lower due to the presence of a real estate asset.