As property obsessives, we’re always interested in innovation in the market-place, so when Middleton client Norman Fiore told us about Property Partner, in which his company Dawn Capital is an investor, we were all ears. Norman describes Property Partner as a ‘stock exchange’ for residential property investments, and says, “When we take these bets, we expect them to be industry changers”.
“The current reality of investing in residential property is that it’s more like starting a business than making a simple investment. There’s so much admin and so many legal hurdles. There are risks if you are dependent on rental streams, and there are big, up-front cash requirements. And buy-to-let has also been something of a political football, which introduces other uncertainties and unknowns. Property Partner has built a platform that enables you to invest in buy-to-let on a share basis. Clearly, it’s a much easier decision to invest an affordable amount of capital on a regular basis, than buying an entire property in one go, particularly when the properties are chosen by experts.”
Launched in 2014, the aim of Property Partner was to open up the buy-to-let market to anyone. The company purchases a broad range of residential property types. Investors provide cash equity, but this can be as little as £250, and can be invested in one property or several. The investor owns shares in a limited company which can be bought or sold on Property Partner’s ‘resale market’.
With 10,000 investors on its platform and £59 million of investor equity under management, Property Partner has created a portfolio of 440 units, owned by 86 different SPV (Special Purpose Vehicle) companies.
Middleton’s Mark Crampton listened with interest. “Norman was very enthusiastic about the possibility that crowd-funding concepts such as Property Partner can bring greater liquidity to the residential property market as a whole. While Middleton’s market is obviously very different, we are all, ultimately, dependent on movement in the market. We’ve all had to factor in the big shocks of the last 10 years – from Lehman Brothers through to Brexit – and dismantle some of the old preconceptions about bricks and mortar. So it’s great to hear about such innovation in a market that is, by its nature, conservative.”
“It’s also interesting to hear from Norman that they have seen buy-to-let investors changing their habits. Some have stopped buying more properties and switched to Property Partner for the expertise and convenience. Many younger investors are also using the platform – some as a means of building a deposit for their own first home, others as a way of taking a step into buy-to-let.”
With typical returns of 10 per cent a year after fees from UK investments, Property Partner is now eyeing Europe and beyond. Founder and CEO Daniel Gandesha has described his vision as ‘Creating a global stock market for property’. The rest of the property world is sitting up and taking notice.
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