Participatory real estate financing, which is used by developers to partially finance their construction programs, is booming. It grew by 157% in New Aquitaine last year! Two-thirds of this regional increase is concentrated in the Gironde region, and for the most part in Bordeaux area.
Born2Invest finance news mobile application is the world’s leading public service that provides its readers with the latest news in trending topics such as crowdfunding, business, and others.
A new lever designed to financially close the deals launched by developers, participative real estate financing is developing at a high speed in France and explosively in New Aquitaine. The 2019 barometer of real estate participatory financing by Fundimmo, a French platform dedicated to this type of fund-raising, which surveyed 28 real estate crowdfunding platforms in collaboration with HelloCrowdfunding, showed that New Aquitaine real estate developers raised $37.6 million (€33.2 million) through this mechanism last year. This represented a record increase of 157% compared to 2018!
“This very strong trend is also found in other regions, with New Aquitaine in fourth place nationally, behind Ile-de-France, at +226%, Reunion Island, which is up +206% and the Grand Est, at +189%. The trend in New Aquitaine is identical to that of Provence-Alpes-Côte-d’Azur,” said Jérémie Benmoussa, chairman of Fundimmo’s management board. It should be noted, he continued, that of the $37.6 million (€33.2 million) collected in New Aquitaine, two-thirds were collected in Gironde, with $25.4 million (€22.5 million)! This is thanks to the strong dynamism of Bordeaux Métropole. The other major regional market is in the Basque Country: $6.92 million (€6.11 million) was collected in Pyrénées-Atlantiques.”
The number of promoters has doubled
If to look at the evolution of this real estate participative financing in volume, here again, New Aquitaine is in fourth place nationally with its $37.6 million (€33.2 million), behind Ile-de-France $186 million (€164.2 million), the Auvergne-Rhône-Alpes $68.7 million (€60.7 million) and Provence-Alpes-Côte-d’Azur $43 million (€38 million) regions. The Grand Est occupies fifth place, at $24.58 million (€21.7 million), ahead of Occitania $20.95 million (€18.5 million), the Pays-de-Loire $11.44 million (€10.1 million), Réunion $7.24 million (€6.4 million), Centre-Val-de-Loire $6.9 million (€6.1 million) and, in tenth place, Normandy $4.41 million (€3.9 million).
“This trend is more favorable as the increase in inflows follows the trend in market activity. Until 2018 there were 35 property developers benefiting from this type of financing and this group has been enriched by the arrival of 30 additional professionals in 2019 alone”, said Jérémie Benmoussa.
2020 visibility in real-estate
Rumors of a slowdown in collection in 2019 did not really have an impact,” he added, adding that he believes that 2020 should remain a good year.
If the boss of Fundimmo makes this prediction, it is because participatory real estate financing operations are taking place three to six months after the building permits have been cleared of any recourse, which already provides fairly good visibility for 2020.
Superior performance in New Aquitaine
“Real estate crowdfunding is a niche market with great potential. All our platforms are independent and not owned by any developer. This market, which is only five years old, is still very young,” said the chairman of the management board. New Aquitaine savers who opt for this type of investment in New Aquitaine can expect an average annual return of 9.5%, compared with 9.2% nationally, for an average investment period of 19.1 months (21.3 months for the national average).
In 2019, the latter was reimbursed $13.36 (€11.8 million) in New Aquitaine, a good +74% compared to 2018, which represented 20 projects. The average amount per collection was $583.9 (€515.666), 25.2% less than the national average.
“All the lights are green for bonds, where there are no particular warnings. In detail, it can be stated that savers invest $1,788 (€1,581) on average and that the default rate on these operations is very low since it does not exceed 0.57%. This makes real estate crowdfunding a fairly safe product,” observed Jérémie Benmoussa.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in LA TRIBUNE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
How these three technology companies are defining the post-COVID world
Covid-19 has upended our lives in dozens of ways, and as the US continues to struggle with rising case numbers,...
Hope in Morocco: after 4 months of confinement the economy is in recession but the government finally announces a recovery plan
Moroccans are suffering harshly from the social consequences of four months of health crisis. The tourism sector in particular, and...
Record gold prices continue apace and silver hits its price target
Gold prices continue to soar and silver is slowly beginning to break out of a multi-year channel. Precious metals bulls...
Possible Ka-Booms as Far as the Eyes Can See
Explosive growth in Silver and Gold are but one of many indicators of an overbought market, with large banks and...
How the Ministry of Agriculture is trying to help farmers in Burkina Faso
Burkina Faso is one of the African countries affected by insufficient rainfalls. Due to the global situation and the lockdown...
Featured6 days ago
Deutsche Bank joins the fintech company Traxpay
Featured6 days ago
Why sustainable investment is the path to corporate resilience
Cannabis5 days ago
Demecan launches an online cannabis shop for pharmacies
Biotech7 days ago
The Government of Catalonia awards Roche a €9.2 million contract for analysis services