Major real estate platforms launch trade body to tackle misleading investor information

Monday, March 28, 2022 6:00 a.m.

Investment platforms demand standardization of investor information

A group of leading real estate investment platforms today launched a trade body to tackle the spread of misleading investment information, ahead of an expected influx of retail investor funding into the space.

Seven digital investment platforms from the UK and Europe have joined forces to support the launch of the Association of Real Estate Investment Platforms (AREIP), with the aim of standardizing information and ensuring that investors can accurately weigh the opportunities.

AREIP bosses said it was an important step as retail investors increasingly had access to the space.

“Real estate, the world’s largest asset class previously reserved for institutions and high net worth individuals, is being made more accessible by hundreds of investment platforms around the world,” a spokesperson said.

“We are on the cusp of enormous growth in this nascent market, and it is the responsibility of all participants to embrace high standards and transparency, which will in turn engender trust and lead to mass market adoption.”

The seven founders, including UK firms Shojin Property Partners and Simple Crowdfunding, said standardizing investor information was the “basis on which a centralized market can be built”.

Standardization is needed in terminology, investment descriptions/data, risk rating and operations, including technology, the companies said.

This comes after real estate investment has exploded in recent years and caused a boom in the growth of real estate investment platforms.

The average annual growth of real estate investment platforms between 2016 and 2019 was 63%, according to data from the Center for Alternative Finance (CCAF) at the University of Cambridge.

If the market continues on this trajectory over the next five years, global transactions for the period of 2015 and 2027 are expected to be worth $309 billion.