VentureCrowd and Clearstate raise $1.7 million in property crowdfunding deal

VentureCrowd and property developer Clearstate have raised $1.7 million in their second joint round of crowdfunding for a residential development in Sydney’s south west suburb of Austral.

The fund attracted more than 50 investors. Investors get 49 percent equity with a targeted return of 84 percent, according to a media release.

VentureCrowd's crowdfunding platform allows investors to buy equity into a property development before it is subdivided and sold , while developers such as Clearstate are able to raise equity through this form of alternative financing.

The two companies’ inaugural Riverstone development deal in Sydney raised almost $1 million in four hours.

The 2.4-hectare site in Austral will be sub-divided into 44 residential lots.

Clearstate is developing eight subdivision projects across the Western Sydney growth corridors and North West Melbourne, offering land for owner occupiers and investors.

Land parcels range from 260 sqm to 1,300 sqm, averaging 450 sqm per lot.

Lachlan Cameron, commercial director of Clearstate, said working with such a specialised platform provides access to a broad range of interested parties and allows us to put our development projects in the hands of the people who really want to invest in them.

Among the more than 50 investors in the Austral site is former Credit Suisse advisor Mitchell Hopwood, who invested through his self-managed superannuation portfolio as an alternative to a listed property fund.

“The Austral opportunity provided a relatively high, short-term return in a bite-size, easily understandable transaction that is fairly derisked from an investment perspective," he said.