Cloud helping property investments go digital

May 21, 2019

—Does this also apply to the financing of large-volume projects? Last fall, Exporo and Hannover Leasing showed in a cooperation project that it does indeed, and CFB is now following suit with its involvement in the “Bergfürst” platform. In other words, more and more big players in the property industry are securing access to the digital world using crowdinvesting platforms.

What’s behind this strategy? With this type of cooperation, the big emission houses are seeking to develop an additional sales channel, which they hope will finally help them compensate for the placement losses of the last few years. The Munich-based LHI already used Exporo to finance a logistics project back in 2016.

property investments
Crowdinvesting unites several financiers to invest in one project who eventually will have a share of its financial success. © shutterstock / Miriam Doerr Martin Frommherz

Combination of property and digital expertise increasing market exposure

“The cooperation with Exporo is yet another stage in CORESTATE’s digitalization strategy, which will give our customers even better access to our products,” says Lars Schnidrig, CEO of the Hannover Leasing parent CORESTATE Capital Group. With a bond to which it is possible to subscribe through the Hannover sales subsidiary Accontis and Exporo, Hannover Leasing aims to make it as easy as possible to invest in an office building in Pullach, near Munich.

Combining digital expertise with the property expertise of the established initiator is expected to increase the market exposure of both partners and to bring benefits for further joint projects.

Early days: Crowdinvesting for commercial property financing

Nevertheless, crowdinvesting has yet to make a breakthrough in what is an important segment in Germany: “Crowdinvesting is an interesting funding method––albeit mainly for private properties,” is how Mark Rodeck, the Innovation Officer of the ZIA and CEO of the project developer Edge Technologies, describes the situation. “In large-volume commercial property financing this type of funding does not play much of a role yet, but, of course, this can change.”

According to Lothar Schubert, Managing Partner of DC Developments, this restraint is mainly due to the rather low agency volumes per property. According to a calculation done by the magazine Wirtschaftswoche, only one third of the projects are intended to raise more than EUR 500,000. Therefore, professionals like Schubert are still waiting for larger volumes and longer-running projects before they are prepared to engage in crowdinvestment platforms.

Digitalization raising medium-term yields despite initial costs

The much-awaited professionalization is indeed advancing in leaps and bounds: With the B2B extension “Caladio,” the crowdinvestment platform Zinsland is intended to bring project developers and portfolio owners together with banks and other property financers. Thus, they are planning to fully digitalize not only the acquisition of mezzanine capital, but also loan reporting. This will also provide digital commercial access to borrowed capital for the first time.

Structural change through digitalization is, of course, no piece of cake, but requires a lot of adaptation, but it should pay off in the medium term. “Increased efficiency through digitalization will increase the yield,” Martin Rodeck predicts.

Stephanie von Keudell

Independent journalist