Real estate investment platforms form AREIP

Twelve real estate investment platforms have joined together to form the Association of Real Estate Investment Platforms (AREIP). The association was founded by seven platforms, who are joined by five other platforms as members. Its main objective is establishing common market standards to build investor trust and liquidity.

The founding real estate trading platforms are from several countries in Europe, such as BrikkApp and Occollo (Czech Republic), Max Crowdfund (the Netherlands), Reinvest 24 (Estonia), and Shojin Property Partners, Simple Crowdfunding and British Pearl (the UK). Together, they want to open up property investing in different markets via fractional share ownership. This reduces the cost of investing to 5.919 euros (5.000 British pounds).

‘AREIP will engender trust’

“Real estate, the world’s largest asset class previously reserved for institutions and wealthy individuals, is being made more accessible by hundreds of investment platforms from across the globe”, said the association on its launch. “We are on the cusp of enormous growth in this nascent market, and it is the responsibility of all participants to adopt high standards and transparency, which will in turn engender trust and lead to mass market adoption.”

‘It’s the responsibility of platforms to adopt high standards and transparency.’

The organization has created a common set of operational and conduct standards. Member platforms will undergo a standardization exercise, which includes standard market terminology, investment descriptions and risk scoring. This will improve investment transparency and build investor confidence and liquidity.

‘Standardization offers benefits’

“Standardization offers benefits to all market participants including issuers, property developers, investment platforms and investors. Standardization also helps the development of primary issuance markets and the secondary trading market.”

‘Standardization helps the development of the secondary trading market.’

With the new European regulations, crowdfunding platforms are able to operate in multiple countries. Standardizing these operations could level the playing field.