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Peer2Peer Finance News | September 23, 2019

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Downing Crowd steps up investment into data centres

Downing Crowd steps up investment into data centres
Anna Brunetti

CROWD bond platform Downing Crowd has launched a funding deal for a new data centre in Birmingham as part of its growing focus on this borrower market.

The crowdfunding firm has channelled £2.8m to GTP3 LLP for the development of a three-building centre that has already received a junior loan by the Birmingham City Council, which plans to strengthen the city’s position as the country’s second digital hub.

Bonds secured against the project are set to yield Downing Crowd’s investors up to 5.25 per cent per year over a two-year term, and carry a loan-to-value ratio of 17 per cent, the firm said.

“Investing in crowd bonds can be a great way to see your money go into new businesses that will have a direct impact on your local economy,” said the firm’s head of crowdfunding Julia Groves.

“The crowdfunding sector more broadly is also going from strength to strength, with over a million people having now invested through a crowdfunding platform in the UK, but, despite its growing popularity, the different kinds of crowdfunding tend to all get labelled as ‘extremely risky’.

“In fact, crowd bonds are a simple type of securitised investment and, provided investors fully understand the relevant risks compared to savings accounts, they can potentially offer attractive returns in the current climate of low interest rates and rising inflation.”

The platform launched its own Innovative Finance ISA in March, allowing investors to put money into the tax-free wrapper first and choose the projects they want to invest in at a later stage.

The new Birmingham bond underpins the platform’s growing investment in data centre projects, which will help it capitalise on the government’s ramped up digital economy and technology infrastructure strategy.

The P2P firm already committed a further £21m of funds to projects in this segment, which adds to the £33m it recently channelled to the KAO data centre in the London-Stansted-Cambridge corridor, which marked its largest deal to date.

“Data centres are becoming an increasingly large part of the UK’s future infrastructure,” said Peter Beckwith, founding member of GTP3 LLP.

“And the demand for data centres clearly isn’t just in the busy South East either, with Birmingham representing one of many areas that are currently underserved when it comes to this type of facility.

“We have built a strong relationship with Downing, who have worked on several data centre projects already and we’re excited to have them involved as our latest development continues to gather pace.”

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