One year from launching, Australia’s-first peer-to-real-estate (P2RE) marketplace Peer Estate is in such demand it’s funding developer loans in less than a day.
With bank lending constrained by tighter regulations and the legacy of caution left by GFC, the platform is tapping into a global developer desire for alternate financing.
Peer Estate CEO Adam Broder said part of the reason he started the business with ex-ANZ banking tech expert Phil Aarons was to help smaller property developers find funding as the banks scaled back lending.
“We’ve seen huge demand from land owners and developers who are struggling under tighter lending criteria by the banks. They come to us once they become fed up with the time it takes to source the required funding from banks. We give borrowers certainty of capital,” Broder said.
Spun out of respected real estate investment management firm Qualitas, Peer Estate’s online-only P2RE model has proven its traction in its first twelve months:
- Has been involved in funding loans across Victoria, NSW and Queensland with the majority being land acquisition finance for developers
- Over 400 registered investors
- Over 150 investments
- Delivering returns between six per cent to 12 per cent
In the last three months, Peer Estate has funded a developer land bank loan in Port Melbourne in less than a day and one in the inner-western Sydney suburb Annandale in under 90 minutes.
Offering a minimum investment of $5000, Peer Estate also gives investors often excluded by large price tags and lot sizes, flexible access to commercial property.
“Our investors see the benefit of good risk-adjusted returns being able to provide lowly leveraged loans into a sector that the banks find difficult,” Mr Broder said.
“Given our heritage and people we are able to offer the same institutional grade investment standards – across risk mitigation, approval process and ongoing management – that up until now have been kept exclusively for institutional and ultra high net worth clients.”
The next 12 months will see Peer Estate enter an exciting growth phase with further investment in technology to bring even more users to the marketplace as well as a potential Series A fundraising.
Qualitas founder and Managing Director Andrew Schwartz believes in the growth of the business. “We invested in this business due to our strong belief that this industry is ripe for disruption and those on the inside are in the best position to disrupt themselves. We couldn’t be happier with Peer Estate’s progress to date and look forward to sharing the growth with many others.”