ARA-backed crowdfunding platform raises S$2.7m from maiden property investment product

CROWDFUNDING platform Minterest has raised S$2.7 million from its debut property investment product, Minterest and its majority shareholder ARA Asset Management said on Friday.

The final S$500,000 investment tranche was snapped up within two minutes after it was launched on Thursday evening, while the first S$500,000 tranche, launched on May 15, sold out in 11 minutes.

Some 25 Singapore-based investors participated in the final tranche, with the largest investment amount exceeding S$200,000, according to the press statement. 

The investors are mostly professionals in their early 40s on average, and over a third are first-time Minterest users.

The short-term, income-yielding product is backed by the secured mezzanine debt financing of a A$440 million (S$403 million), 64-level high-rise residential development project in Melbourne's central business district.

The investment offers a gross return of 6 per cent per annum for a minimum tenor of three months. After service fees, the net interest rate is 5.1 per cent per annum.

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The tranches were launched by way of co-investment with Straits Real Estate (SRE) and will be professionally managed by SRE on investors' behalf.

SRE, which is co-owned by The Straits Trading Company and ARA Asset Management chief executive officer (CEO) John Lim, invests in real estate-related investment opportunities in the Asia-Pacific.

Minterest chief commercial officer Janice Koh, who is also director of fintech at ARA's property management arm, said the overwhelming investor response was "testament to the strong demand by investors for quality institutional-grade real estate investments that are backed by reputable real estate investment managers with a strong track record".

She added that Minterest plans to develop more institutional-quality investment opportunities for investors in the future.

ARA CEO Mr Lim's family office and the group's property management arm jointly acquired a 52.08 per cent stake in Minterest for an undisclosed sum earlier this month.

The move was ARA's first entry into the fintech sector and part of its wider ambitions in the global real estate credit business.

Minterest, which was established in 2016, holds licences to provide both corporate and personal loans, and connects corporate borrowers with retail investors. It has originated loans of more than S$87.5 million in the Republic to date.