SHOJIN Property Partners is expanding outside of development finance to offer a new range of property investment opportunities.
The property crowdfunding platform, which launched in September 2017, typically connects developers in need of equity funding with sophisticated and high-net-worth investors, who receive returns of up to 27 per cent per year.
The London-based firm launched three buy-to-let products last Thursday and is poised to launch new bridge and mezzanine finance facilities – some of which will be open to retail investors.
“It’s an education process,” Gareth Bain, head of marketing at Shojin, told Peer2Peer Finance News. “People know about buy-to-let, so it’s a good way of getting them on to the platform. Then they can learn about the other products we offer.”
The new products – which are a mix of debt and equity finance – will typically offer lower returns than the core development equity product, but will be lower risk, Bain said.
Shojin is offering a ‘standard’ buy-to-let product, which offers investors income plus a share of any profits when the property is sold, for a blended return of seven to 12 per cent per year over five years.
It has also launched a ‘capital growth’ equity product, which purely offers capital growth but no regular income, with target returns of nine to 12 per cent per year over five years.
Its third buy-to-let offering is an income-only, mezzanine product, secured by a second charge against the property. Investors will receive a fixed quarterly income but none of any future capital growth on the property, with target returns of four to six per cent per year.
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Its upcoming bridge and mezzanine investment opportunities will be launched once a pipeline of projects come to fruition, Bain said. They will offer returns of eight to 12 per cent and 14 to 18 per cent respectively.
Some elements of the expanded product range will be available to retail investors, including the buy-to-let facilities. “These offer fixed returns and a fixed time period so are less risky than the equity products,” said Bain.
Shojin launched an Innovative Finance ISA at the end of March, enabling most of its investments apart from the development equity product to be included in the tax-free wrapper.
The firm co-invests in all projects. “We make our money by the projects being successful,” said Bain. “We do extensive due diligence. It’s a partnership between us and the developer and the investor.”
Shojin was founded by Jatin Ondhia, who spent 12 years at UBS optimising large institutional portfolios, and Sandeep Puri, a qualified quantity surveyor who has worked for several large homebuilders including Redrow and Wimpey.
The firm has raised £21m since its launch and has attracted over 1,000 investors including high-net-worth individuals, family offices and institutions.