CORPORATE lawyer and venture capitalist Steve Maarbani is on a mission to democratise the Australian property investment scene, once considered the exclusive domain of the “top end of town”.
The CEO of property crowdsourcing company VentureCrowd, Maarbani says his digital investment model helps ordinary people secure a stake in high-growth residential and commercial property developments with relatively low entry requirements.
“We can allow people to invest as little as $10,000 or $20,000,” he tells the Australian Conveyancer.
“No property developer or broker anywhere could possibly justify speaking to an investor for $10,000, it just doesn’t work for them financially.
“But we can provide that kind of access because it costs us a lot less to facilitate because of our digital processes, and we’re able to bring together lots of different people with all sorts of different cheque sizes.
“In the past, this kind of investment has typically been reserved for the top end of town, but we believe it should also be made available to as many people as want to diversify their portfolio into the higher return, higher risk categories.”
Global management consultants IMARC Group says Australia’s crowdfunding market is picking up pace topping $USD368 million in 2024 with expectations it will reach $USD1,321.6 million by 2033, exhibiting a predicted growth rate of 15.26 per cent between 2025 and 2033.
IMARC says the rise of digital platforms, such as VentureCrowd, are facilitating the ease of crowdfunding and are the primary driver of the market’s growth across the country.
VentureCrowd’s Property Director David Whitting, formerly the general manager of billion-dollar construction companies Grocon and Multiplex, says VentureCrowd, which entered the market in 2014, is a “first mover in this space, in terms of property development and crowdfunding”.
“Crowdfunding allows small investors to invest more easily in property and property development just like they can in shares,” says Whitting.
With a company focus on property projects in the “fertile market” of southeastern Queensland, Maarbini says VentureCrowd investors can choose their preferred entry levels in the property capital stack.
“Investors can opt to be in on the ground floor of greenfield investment during the equity or acquisition stage – which is the highest potential return part of the process – through to the mezzanine/ preferred equity stage of civil works, to the first mortgage debt stage of construction through to completion of the dwellings and sales,” says Maarbini, who has so far paid out more than $20 million to his property investors.
As part of its business model, VentureCrowd also supports ‘proptech’ companies such as PublicSquare and Land Lease Home Loans to raise funds via their platform. Both companies are also offering “alternative and affordable solutions” for consumers wanting to enter the property market.
VentureCrowd’s property clients can choose to fund specific projects to meet their individual investment principles with the company offering developments focused on providing more housing in under-supplied regions, or projects which tick environmental, social and governance (ESG) boxes like conservation initiatives and energy-efficient housing.
Maarbini says his clients can monitor their VentureCrowd investments in real time from day one.
“Investors get access to a password- protected dashboard with access to all of the investment information that’s relevant to their investment from the minute they press the button to invest,” says Maarbani, who claims a 57 per cent reinvestment rate from clients.
Nevertheless, he cautions every investment comes with exposure, and property developments can be challenged by many variables including unpredictable weather, rising construction costs and general market conditions.
“Property development is a risky business,” he says. “You cannot be absolutely certain at any point in a project that it’s going to perform the way you originally estimated.”
So, Maarbani advises, it’s vital any new or experienced investor conduct due diligence, seek independent advice and manage their property investments as part of a diversified portfolio.
§ SOME OF THE VENTURE CROWD PROJECTS
Situated atop the Great Dividing Range, Alford Grove in Glenvale is Toowoomba’s newest master-planned community created by VentureCrowd Property Projects. Covering 36.42 hectares with 314 homesites, stage six of the project will soon be ready for release. A private community in Albany Creek, 15km from the Brisbane CBD, Parqway Townhomes is a residential, riverside development of 49 new homes. VentureCrowd offers investment in the project via preference equity or through its Super High Yield Fund, targeting construction and development of the site. With new tenancy rates in Queensland climbing 45 per cent since 2020, VentureCrowd has plans to develop a co-living project of 114 studio apartments aimed at young couples and singles, located in Morningside on Brisbane’s booming Southside.