UAE-based SmartCrowd, the property investment and technology platform, has announced that it has grown by 400 percent in under two years since being regulated by the Dubai Financial Services Authority (DFSA).
Following its success across the UAE, the business is now eyeing real estate opportunities internationally with brokers and developers.
The company is also looking to expand its physical presence across the region to cater to the growing SmartCrowd investment community.
“The entire region is viewed as a safe haven so we intend to attract investors from around the region, that’s probably the next leg of our expansion,” CEO and co-founder, Siddiq Farid, told Arabian Business. “And then providing international opportunities, not just Dubai properties, giving people the opportunity to invest in UK properties, or US properties or properties in Asia or other parts of the world.”
Farid explained that the concept of the business is to make investing in property as simple as investing in the stock market, with the option to purchase shares in properties as an alternative to buying outright.
He said: “If you look at the real estate sector, there’s a tremendous amount of demand for investors, everybody wants a piece of real estate, who doesn’t want to invest in real estate? What we have done is make it accessible for many more people. We’ve created a new market.”
The home grown business was one of the first to graduate from the DFSA regulatory sandbox and now has offices in Abu Dhabi ADGM and Dubai’s DIFC FinTech Hive.
SmartCrowd’s model uses a 100-point proprietary screening tool and independent data to assess the most attractive properties for investment, before listing on the platform.
Properties are listed on the platform for 30 days, with investors given the opportunity to invest until 100 percent of the property value is reached.
The property is then divided into shares – via a Special Purpose Vehicle incorporated in the Dubai International Financial Centre (DIFC) – which is allocated proportionally dependent on the size of investment.
Investors benefit from rental income on the property and can look to sell their shares whenever the investor wants to exit.
The company takes an upfront payment of 1.5 percent of the investment and charges 0.5 percent annually as an administration fee. SmartCrowd also takes a 2.5 percent fee after any exit.
Farid said: “The difference is, you put your entire AED1 million in one property, whereas you could take that AED1 million and spread it across 10 or 20 properties so your risk adjusted reward is much better. Imagine if you had made that one investment and, God forbid, the building burned down or something happened to that investment, you had all your eggs in one basket.
“Whereas a platform like ours, you can spread that risk across multiple properties so yes you’re paying a little [in] fees, but from a risk-adjusted returns, that is much better than putting all your money into one property.”
Siddiq Farid, CEO and co-founder of UAE-based SmartCrowd
Farid said that while demand from new customers is high, there is strong reinvestment among existing investors with over 60 percent investing more than once. He added that while 90 percent of investors come from the UAE, there are also people involved in investing on the platform from New Zealand, Canada, Italy, Germany and the UK; and regionally from Saudi Arabia, Kuwait and Bahrain.
“The beauty of the platform is that it’s borderless. Anyone from anywhere from the convenience of their device can access real estate. That’s quite powerful,” he said.
“Imagine a middle-class family sitting in India on their couch who would really like to buy property, but they don’t know how to get started and don’t have money to buy, but guess what, they can just open up their phone, log-in to the SmartCrowd platform and voila, they can own a piece of property in Dubai Marina or Downtown.”
Currently, there is a selection of real estate investment choices on SmartCrowd, including offerings from Ellington Properties, Lootah Real Estate Development, Driven Properties and Select Group.
SmartCrowd has also partnered with specialist property managers AirDXB to maximise rental opportunities in the holiday home segment within its portfolio.
To date, SmartCrowd has provided investment opportunities across Dubai including Downtown, Dubai Marina, Palm Jumeirah, Jumeirah Village Circle, Jumeirah Lakes Towers, Remraam, Dubai Silicon Oasis.
Farid added: “We’ve grown organically so far, with our customers passing on recommendations to their friends and family. They are seeing the benefits of strong dividend payments in the form of rental yields, which are on average around seven percent per year. We’re really proud that the majority of people who invest once, come back and reinvest.”