Erik van Eeten started his career at IBM as a Business consultant and transferred to the Investment and Banking Industry. Realty Africa has a lot of expertise in the local markets with one co-founder born and raised in Zimbabwe as well as through the benefit of local teams which we establish in each country. Erik van Eeten imparts his expertise about Realty Africa and the opportunities of investing in Sub-Saharan Real Estate projects via their platform.
Can you give a brief overview of what your company does as a property crowdfunding platform?
If I am asked to describe Realty Africa, I have to distinguish between two groups. We not only see the investors as our customers but also have a very strong focus on the developers.
From the start, we took the concept of investing in Africa very seriously and wanted to develop a new approach towards fiduciary responsibility and investor security in the crowdfunding space. It took longer to setup than we anticipated, but for investors, we can offer great investment opportunities in Real Estate which are fully securitized and well suited for retail, professional as well as institutional investors. We thoroughly vet all investments with the help of our service provider Deloitte and we stay involved to manage and monitor the investor interests until the end. We perform site visits and use drip financing to protect the investors. Large investors are welcome to perform their due diligence as well, even before the project lands on the platform.
At the same time, we want to really empower the local landowners, developers and architects in Sub-Saharan Africa. We developed a total service portfolio which we will launch in stages. These will support the local professionals and enable their businesses. Qualified projects have access to international funding on our crowdfunding platform. We are also soon launching our RA Connect platform where the landowner can meet developers and architects to achieve common interests and create joint ventures and more services will follow.
How does crowdfunding fit in the local tradition and how can the local community benefit?
We believe in the future of the African Real Estate markets. From an investment perspective and more importantly from the Impact that these developments have on the local community. We have a large variety of projects in the pipeline which includes Social Housing, Student Housing, Eco Lodges but also middle-income housing and luxury apartments. Africa has a long history with crowdfunding. Whole communities would pull funds for creating a building. For instance, the University of Botswana was largely “crowdfunded”. This process of financing not only facilitates the funding but also creates a feeling of mutual ownership and care for the longer term. We are enabling the African community to take this concept to the next level to get access to the international retail and professional investment community. With our additional services, we support the local developers already in the pre-finance stage. These services will also deepen our knowledge of the local markets, which is to the benefit of all our customers.
With crowdfunding growing in a variety of sectors, to what extent do you feel that businesses and investors are now starting to a pay attention to projects using this investment method?
It is a misconception that crowdfunding is only for small amounts and non-professional investors. Crowdfunding is a way of democratising investments. In our view it is ideal for investors who would like to have more control. You can select the project that you like instead of a mandate to a fund manager. At the same time, investing in real estate in Sub-Saharan Africa is also an ideal way for professional investors to spread risk in an investment class with higher yield and which is maybe outside of your expertise. Investors who prefer Impact investments can participate in Social Housing or Ecolodge projects. So property crowdfunding in Sub-Saharan Africa offers many opportunities to all kind of investors. When the pipeline grows, we are looking for partners to establish a managed fund or REIT of African Real Estate.
How can your Company’s expertise benefit our readers?
With our local teams and with the help of our service providers, we have a lot of knowledge of the local African markets where we are active. Many investors regard investing in Africa as very risky and scary. With our ECO System we are able to open up this market and to offer access to opportunities which were otherwise not available before to most investors. The additional services are vital in creating a stable company base and to support the core business of empowering the local people and of finding interesting, trustworthy and transparent investment opportunities.
Another interesting service we offer lies with a select group being the Diaspora Community, those living abroad outside their country of origin. With our network, we can not only provide investment opportunities in their home country, but we can also support an ambition to build a house back home. With the same structure we use to check on development projects for our investors, we can check on the quality of your build and make sure that only money is paid when the work is performed. We call this Diaspora Construction.
What can you tell about the reputation of your firm?
Realty Africa is a new company and the first projects will be online in the next couple of months. As a new business, we have to take good care of our reputation. Reputation is very important in Africa and therefore, we can’t rush the due diligence process and asked one of the Big Four to be our service provider. Also, we are actively expanding our local teams to gain even more knowledge. In parallel, we are also actively seeking for large investors or institutions that love Africa and that want to work together with us to open up this market and possibly underwrite some of the projects. The opportunities are endless and the double-digit returns provide an excellent opportunity compared to the current savings rates in Western Europe or the USA.
How can investors and developers sign up to access the services on your website?
Everybody can visit www.realtyafrica.com and signup or read the information that is available. After signup, we are legally required to perform a KYC on our investors. Professional and Institutional Investors can contact us on our Institutional Contact Page for more information.