Zinsbaustein, the Berlin-headquartered real estate crowdfunding specialist, has seen its business model gain huge favour with private investors, and posted a record first quarter. The company's curated digital property investment platform attracted more than €20m in the quarter. Last year, by comparison, the company brokered 18 separate financings for a total of €44.2m for the full year.
Zinsbaustein focuses mainly on new construction projects with established building companies. It acts as an intermediary in the financing of these individual products by providing qualified subordinated loans or partial loan receivables. Its investors invest their capital independently and completely digitally.
In the first quarter, the capital collected from investors flowed into six different projects, including new residential and hotel buildings, serviced flats and corporate financing. The fastest funding, a corporate financing by the crowd for the project developer Paulus Wohnbau GmbH, reached its goal of €5m after just a few hours.
Five separate club deals accounted for the remaining €15m of the €20m in Q1, with individual investments ranging from €50,000 to €2m, so far the highest single investment in a club deal. The money went into a residential quarter with more than 500 new flats, one residential property each in Berlin and Munich, the construction of a new hotel building in North Rhine-Westphalia and a serviced flat project in Munich.
In the process, a total of 937 individual investors invested in the Zinsbaustein platform, with around 10% of them being new customers.
According to Volker Wohlfarth, managing partner, "The first quarter of 2022 was the most successful in our company's history. With rising inflation, investments in real estate financing via our platform are more than ever an attractive alternative for private investors* who want to structure their investment portfolio as broadly as possible. Club deals are particularly popular. These exclusive asset investments, limited to 20 investors, start from a minimum investment of 50,000 euros and allow wealthy private investors to participate in the financing of projects with terms of only one to three years at interest rates of between six and eight percent per year."
The company has so far had a 100% performance record, with no defaults. This quarter it returned about €3m to investors, paying interest of between 5.25% and 8%.
The average investment in a Club Deal is about €160,000, with a targeted return of 7-8% per year, depending on the project. Crowd investments start from as low as €500.
Markus Kreuter, managing director with responsibility for the real estate itself at Zinsbaustein, told REFIRE he sees plenty of potential in providing vehicles to enable investors to gain exposure to residential refurbishment. The company already offers investors access to the Alternative Investment Fund (AIF) from initiator Primus Valor, "ImmoChance Deutschland 11 Renovation Plus", which invests in existing residential property undergoing energy-saving refurbishment.
Kreuter sees plenty of mileage for short-term mezzanine financing in this area, and a need for many more funds to channel resources into the sector, for which his company was already preparing suitable products, he said.
