Real estate crowdfunding continues its strong growth with 2021 collection approaching one billion euros

Crowdfunding of real estate continued its strong growth in 2021 to reach 958 million euros collected, an increase of 90% compared to 2020.

For Jérémie Benmoussa, Chairman of the Management Board of Fundimmo: “The year 2021 has brought real estate crowdfunding into a new era. With inflows which have almost doubled from one year to the next to approach one billion euros, it has established itself as an essential lever for property developers and merchants who have seen their financing needs increase sharply at the end of year with the rise in building permit issuance. This 2021 collection, which alone represents 42% of the total collection of real estate crowdfunding since 2015 despite the slowdowns linked to the pandemic, has been part of a logic of growth for several years. Professionals are now widely aware and more and more savers are turning to this product to diversify their investments and grow their wealth. With an average investment of €2 per collection, the democratization of real estate crowdfunding continues, particularly in Ile-de-France, the South Region and Auvergne-Rhône-Alpes which together account for nearly three quarters (871%) of investments. But the other regions are taking off, in particular with increased collections in New Aquitaine (+ 74%) and the Grand Est region (+ 93%). Obviously, the investment horizon of less than 97 years on average and the average return of 2% per year appeal to investors and the outlook is encouraging: the entry into force at the end of 9,21 of a new status for crowdfunding on a European scale will make it possible to innovate and propose investments in new, more alternative and more international products. On this new basis, the coming period will certainly make it possible to identify new trends, whether in terms of investor preferences in terms of project typology or the integration of environmental issues. The upcoming elections will no doubt also be decisive in terms of future public policies for real estate construction. »

Unparalleled Collection and Refunds

Like previous editions of the barometer, the indicators for 2021 are in turn at record levels: 958 million euros were collected, compared to 505 million in 2020, an increase of 90%. This annual growth is in line with pre-crisis growth rates. The increase in funded projects, 1.065 in 2021 compared to 589 in 2020 (+81%), also illustrates the strong dynamism of the sector.

On the reimbursement side, here again the figures are on the rise: 301 million euros reimbursed (+ 67% compared to last year), representing 474 projects (compared to 310 in 2020).

The average performance indicators are maintained

Based on the data published by 26 platforms, the democratization of real estate crowdfunding is reflected in particular in the number of investors per collection: there were 313 on average in 2021, compared to 177 in 2020, with an average investment of €2.871 (compared to €4.711 in 2020).

The average amount financed per project amounts to €899.933, an increase of 5% compared to the previous year. The average investment period is very slightly up, at 21,2 months, compared to 21 months in 2020.

The average annual rate of return remains above 9%: it is 9,21%/year in 2021 against 9,3%/year in 2020. A remuneration which remains particularly attractive for savers wishing to boost their wealth by investing in real estate, in a relatively stable market.

Ile-de-France remains in the lead, residential takes the lion's share

The Ile-de-France region remains at the top of the ranking with a collection of 419 million euros (compared to 225 million euros in 2020, an increase of 86%), followed by the South Region and its 171 million euros (+191%) in second position, driven by the operations of luxury goods merchants, particularly on the Côte d'Azur. In third place, Auvergne-Rhône-Alpes with 118 million euros collected (+87%). These three regions alone account for almost three quarters of the national collection. With a few exceptions, collection is up in most regions.

We can highlight the growth in collection, particularly in the Grand Est (+100%), in New Aquitaine (+93%), in the Pays de la Loire (+79%), or in Occitanie (+42%). .

The market continues to be driven mainly by residential real estate transactions, which represent 81,7% of projects financed in 2021. Offices (9,8%), shops (9,7%), hotels ( 3,8%), development projects (2,2%) and activity/logistics (1%).

Another fact to be underlined: the continued growth in the operations of property dealers, ie purchases of goods which are then valued and then resold with a gain. They will become the majority in 2021 (53% of collection compared to nearly 39% last year).

In 2021, the "average project" financed by real estate crowdfunding was a residential operation of 45 housing units in Ile-de-France, representing a turnover of around 11,3 million euros.

A full-fledged financing solution for professionals

In a context of lengthening the duration of real estate transactions, the use of crowdfunding has become one of the main levers for adjusting and arbitrating equity for real estate professionals. Seduced by the possibility of optimizing their cash flow quickly to continue their activity serenely, 1.039 operators have been convinced by this method of financing since the creation of the market, including 259 new ones in 2021.

At this stage, the real estate crowdfunding market remains concentrated around 7 major platforms (including Fundimmo), which represent more than three quarters of the total market inflow. Then follow 9 medium-sized platforms which represent less than 20%. Then 10 platforms which represent just over 4% of market share. In 2021, only 26 platforms were active.

Decrease in default rate, slight increase in late payment rates

The average default rate is calculated on the basis of projects having suffered a capital loss and/or a loss of interest since 2012. It is evaluated at 0,09%, compared to 0,16% in 2020, i.e. a decrease of 0,07 .XNUMX points.

Unsurprisingly due to the health crisis, the late rates are slightly increasing. The rate of delays of less than 6 months amounts to 4,76% (compared to 4,4% in 2020), and that of more than 6 months to 6,61% (compared to 5,7% in 2020), of which 3,9% with a delay of 6 to 12 months. Note however: these are averages that cover significant disparities. Investors who suffer these delays continue to benefit from the corresponding additional interest.

In a process of transparency, the HelloCrowdfunding project aggregator updates the data on the progress of the various projects every month, thus making it possible to identify late projects.