Belgian real estate crowdlending platform Beebonds is set to open an office in Luxembourg after getting a taste of the market with a successful project in Mertert.
The platform’s expansion into the grand duchy comes at a critical time: in 2017, Luxembourg think tank the Idea Foundation said that the country needed to build around 9,500 housing units per year until 2030 to house the country’s growing population. Every year it falls short of that target, it drives up house prices. More prudent lending policies among banks further compound the problem.
“Banks have an 80% lending coefficient so developers have to find 20% from their own funds and often they don’t have enough,” Beebonds CEO Joël Duysan explains.
Developers in Luxembourg will often raise finances by selling properties “off-plan”, before they have been completed. However, rising inflation rates make it harder for an individual to borrow for such a project. Duysan says: “The bank demand that the developer sells 70% in pre-sale but they don’t finance people who pre-buy, which means construction is slowed down.”
Beebonds has been perfecting a solution in Belgium since 2016 that leverages individuals’ savings through crowdfunding offering a return on investment of 8-9%. Duysan compares it to what wealth managers and family offices have been doing for the ultra-wealthy for decades with the difference that at a minimum investment of €500, the access threshold to Beebonds is considerably lower.
“Luxembourg was important for us because right now there is no crowdfunding there. And yet there is €90b in private accounts,” says Duysan, adding: “Then there’s the real estate element. The population in future is expected to reach 1 million for which the country needs 75,000 homes.”
Beebonds is currently fundraising for a new housing development in Mertert, eastern Luxembourg, where Riman RE Solutions will construct 12 duplex apartments across three buildings. At the time of the interview, the campaign had reached €1.4m out of the targeted €2.4m, showing there is an appetite to invest in Luxembourg.
“I’ve been travelling from Brussels to Luxembourg for the last 35 years and one thing I know is that Luxembourg trusts Luxembourgers,” says Duysan. “That is why we want to have a Luxembourg entity that is recognised by the CSSF and managed by Luxembourgers.”
Duysan, whose company has helped crowdfund 75 projects in Belgium and Luxembourg, totalling €75m, reckons that there is space for more crowdfunding platforms to do the same in Luxembourg, “because there’s a need.”
In the near future, Beebonds will launch crowdfunding for budding sports people. In July, investors will be able to use their savings to finance the career of a budding young golfer in Belgium, with other sports people expected to be added to the platform.
And Duysan was not blind to the urgent need for investment in technology companies and said that it is considering adding crowdfunding features for scale-ups.
