Peer-to-peer property lending platforms have founded an international real estate trade association to set up standardisation across the sector.
Seven digital real estate investment platforms, including the UK’s Shojin Property Partners, Simple Crowdfunding and British Pearl, have formed the Association of Real Estate Investment Platforms (AREIP) to establish common market standards, in order to build investor trust.
The AREIP said standardisation will help investors better understand and compare the investments available to them, improving transparency and building investor confidence, and will help form the foundation upon which a centralised marketplace can be established.
The other founding members include Estonian P2P platform Reinvest24, BrikkApp and Occollo from the Czech Republic and Max Crowdfund from the Netherlands.
The seven members seek standardisation in terminology, investment descriptions and data, risk scoring, and operations, including technology.
The trade association’s founder members will be joined at launch by five more real estate platforms, represented by companies in Spain, Dubai, India and Latvia, with the expectation of imminent further growth.
“In purely practical terms, AREIP is just what this burgeoning industry needs to go onto the next level and will become the industry’s gold standard for trust and integrity,” said Jatin Ondia, founder and chief executive of Shojin Property Partners.
“But I also believe that it signals so much more than that.
“Digital platforms like ours are built on the principle of making property investment more accessible. It’s not just a playground for the super-rich. That’s a principle that can be applied to so many other high-returning alternative investments – from classic cars to fine art – but to do so safely we need to ensure the public is educated and protected. In this sense, I hope AREIP can serve as a template for others to follow.”
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“The standardisation model is ready in its current form, it will be evolving as requirements change and more platforms come on board,” said Atuksha Poonwassie, managing director of Simple Crowdfunding.
“It’s an evolving document we’re comfortable with, a lot of time and effort has gone into getting it to this point.
“One of the aims of the group is to bring standardisation to this marketplace to help people better understand what’s happening with online real estate investing, to make it easier for investors to compare different platforms and to help bring a standardisation model into place so when talking to policymakers there are a number of platforms speaking the same language.
“When it’s international there are different flavours, but the underlying project assessment is the same. In terms of the types of things we’d look for a real estate investment deal, whilst the numbers might be different because of locality, what we’re looking at is the same.”