Website New Look

Hey everyone, after months of work and gathering feedback from our beta testers, we would like to show you Denzity’s new look and feel!

We are only a couple of months away from launching the full product and will keep you updated with our progress and upcoming events by subscribing to our newsletter.

https://www.denzity.io/

Denzity website New Look
Denzity Website New Look

Great turnout at the Future of Real Estate Investing on May 30 2019

It was our pleasure to be one of the co-hosts for the Future of Real Estate Investing event on May 30 2019.

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Thanks for all the co-hosts (RealInflo, C Block Capital, Asia Proptech, ASTA, Mai Capital, FMI) for organizing the event together.

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We have shared our insights on Real Estate fractional ownership and why it needs to be popularized.

We hope everyone had a great time and looking forward to seeing you all soon.

Special thanks to Bryan Wong for taking photos for us. You can find more about him here: https://www.bryanwongdesign.com/

Sign up for our second beta test

Beta testing link: https://beta.denzity.io/

We received some great feedback and comments from our first beta testers (launched at the end of last year). We are close to launching our full version and would really value your feedback and suggestions!

How the beta testing works

As a beta tester, kindly browse the dashboard with your Mac/PC and follow on-screen instructions to test our latest tools and functions to screen investments. Your first visit should take less than five minutes, after that you can spend as long as you’d like!

As a beta tester, we gather your feedback to:

  • Screen for bugs and inconsistencies on our dashboard
  • Improve the Denzity experience by incorporating your comments and suggestions
  • Aggregate beta testing data to revamp our beta towards the full product

Afterward, you will be provided with a questionnaire to share your experience.

Thanks so much for your help and we look forward to learning your comments.

Join us and let’s get started now: https://beta.denzity.io/

Denzity is co-hosting for the event “Future of Real Estate Investing’ on May 30, 2019, in Hong Kong

How will technology solve the inefficiencies, unnecessary costs and unrealized value of today’s real estate industry?

Denzity will be a co-host for the event “Future of Real Estate Investing’ on May 30, 2019, in Hong Kong.

Come and join us for an interactive discussion as we look at the ways technology can improve real estate investment and management

You can find the event details here: https://bit.ly/2JffrUb

We look forward to sharing ideas with you there!

 

Co-hosts:

Denzity

Asia Security Token Alliance

Asia PropTech

Realinflo

FMI Investment Group

MaiCapital

C Block Capital

 

Date:

May 30, 2019 (Thursday)

Time:

6:30 PM – 8:30 PM

Venue:

C Block Capital, 35/F, Two Pacific Place, 88 Queensway, Admiralty, Hong Kong

Realinflo, Our Community Partner

Denzity is proud to announce a partnership with Realinflo, a database platform that is creating the ‘Bloomberg’ for the real estate industry. We would like to introduce Realinflo (www.realinflo.com) to you as the newest member of Denzity’s community.

Traditionally, real estate information has been difficult and time-consuming to obtain. Realinflo solves this problem by providing access to granular transaction data and insights directly from the market. This is combined with their comprehensive land and building database to give a view of normally opaque real estate markets. Realinflo’s vision is to drive improvements in data standards and to become the leading data analytics platform, which is demonstrated by being the first Royal Institution of Chartered Surveyors (RICS) Tech-affiliated firm in the Asia-Pacific region. Currently, Realinflo tracks data on 68 cities in 25 countries across Asia, the Middle East and Africa.

Realinflo’s difference is in the details, for example for any particular building data points are available such as current leases, occupancy rates, historical sales transactions, development details, parameters and planning history. With a complete picture of the market, it is also possible to visualize how real estate markets have changed over time, future supply coming online and to run predictive analytics to make data-driven real estate decisions.

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Gary Walter MRICS, CEO and Co-Founder of Realinflo

Gary a Chartered Valuation Surveyor and has over 11 years’ experience in the real estate industry, with Swire Properties in Hong Kong and Colliers International where he worked extensively across markets in Asia. Frustrated by the lack of reliable data across the region, he founded Realinflo with the aim to raise standards and transparency in the region. Gary has also worked with Virgin Atlantic Airways and has a keen interest in non-profit and social impact work in Africa, having undertaken projects in Kenya, Rwanda, and Tanzania. In 2016 Gary was awarded the excellent Young Achiever of the Year in the Hong Kong RICS Awards and is a regular speaker at PropTech events.

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Denzity and Realinflo both presented at the Propteq Asia 2018 Conference

Gary views that Realinflo’s partnership with Denzity partnership is a natural collaboration in growing Denzity’s ecosystem in the real estate industry. Gary shares Denzity’s mission to match everyday investors with the best possible investment opportunities around the world. By having access to a diverse range of verified listings backed by comprehensive datasets, investors will be able to make informed decisions on which real estate investment best suits their risk-reward profile.

Join Denzity’s Exclusive Beta Tester Program Today

We need YOUR help to participate in our exclusive beta testing program.

We are inviting participants to test out Denzity’s dashboard and to share your ideas and feedback to help us develop the best possible product before releasing to the public.

By joining our exclusive beta testing program, you will enjoy the following benefits:

  • Early preview of products and services that we provide before being released to others
  • Early access and enrolment to upcoming events and conferences
  • Recognition as an early adopter on your individual Denzity profiles
  • Conversion to PREMIUM Denzity membership*

*A limited number of beta testers will be automatically converted to complimentary premium membership.

How the beta testing works

As a beta tester, we ask you to browse the dashboard with your Mac/PC and follow certain instructions to test tools and functions that screen investments. Your first visit should take less than five minutes, after that you can spend as long as you’d like!

As a beta tester, we gather your feedback to:

  • Screen for bugs and inconsistencies on our dashboard
  • Improve the Denzity experience by incorporating your comments and suggestions
  • Aggregate beta testing data to revamp our prototype towards Denzity 2.0

Afterward, you will be provided with a questionnaire to share your experience.

That’s it!

As Denzity will constantly improve as a product, we invite you to give us more feedback at a later stage.

How to participate

The registration will only take a few minutes. The Denzity team will review your registration and upon approval, we will provide you access as a beta tester on Denzity.

Join us and let’s get started.

〈 Become a tester 〉

 


Posts you might be interested:

Why we do, what we do: https://bit.ly/2yMUY18 

Equity vs. Debt Crowdfunding, which is right for me?: https://bit.ly/2OuxIvr

Introduction to Real Estate Crowdfunding: https://bit.ly/2Qmqknh

RECAS Group, our Community Partner

Denzity is proud to announce a partnership with RECAS Group, a fully integrated real estate firm providing asset management, investment management, and advisory services to the real estate market in Mainland China, Hong Kong, Macau, and other countries. https://www.recas-group.com/

RECAS Group

RECAS Group (formerly Real Estate Capital Asset Services Limited) was founded in 2004 by Ivan Ko, its current chairman, who has over 25 years experience in real estate development and finance experience. The Denzity team first met Ivan at a PropTech event in Hong Kong and discussed the real estate industry’s future and what kinds of innovation will lead to the greatest impact in elevating the global real estate market.

Ivan identifies that PropTech can bring a positive impact to the real estate industry and RECAS Group believes in Denzity’s mission to serve an identified gap in the real estate crowdfunding market by matching everyday investors with the best possible investment opportunities available around the world.

Ivan has actively participated in PropTech hackathons and events, most recently the Asia PropTech Innovathon (pictured below) as one of the judges and where Denzity was fortunate enough to meet Ivan.

Ivan Ko (right) presenting the “Day in the Life of Real Estate Executive Award” as Chairman of the China Real Estate Chamber of Commerce Hong Kong and International Chapter (CRECCHKI) at the Asia PropTech Innovation in Hong Kong, August 2018.

From Ivan’s point of view, innovation and technology services to close gaps in the traditional real estate market, whether unidentified or previously thought impossible. For this reason, PropTech may not receive industry-wide recognition now but is a wave of positive change. From his experience, real estate owners in Hong Kong have generated a decent return by being inefficient in buying and holding a real estate portfolio which has simply experienced tremendous capital appreciation over the recent two decades.

This is why he believes Hong Kong should be at the forefront of PropTech development and tackle key issues like accessibility since Hong Kong is one of the most unaffordable residential markets globally. Ivan recognizes that consistent small improvements in technology and innovation will improve the quality of real estate services provided in the best cost-benefit to corporate users.

To become a leading PropTech hub, Hong Kong provides a strong international environment where access to capital, rule of law (such as IP protection), free flow of information, ease of setting up a business, welcoming attitude to foreign workers and new economic growth companies make Hong Kong a sweet spot for any PropTech firm.

PropTech firms need only bring their innovation to strive in a best practice environment of leading real estate developers and investors. This is a market where “dreams” turn into reality. Ivan supports PropTech firms and Hong Kong as a forward-looking city to become recognized as an industry leader.

As a fully integrated real estate firm, RECAS invites PropTech entrepreneurs from all around the world to build their innovation in Hong Kong. Ivan and his team bring a tremendous amount of experience, connections, and wisdom. As a PropTech firm or investor, you can send Ivan an email here if you would like to seek his advice.

Denzity will keep you up-to-date on upcoming events worth your attention and if you’re not already signed up, make sure to sign up to receive the latest updates!

What you need to understand about real estate capitalization rate (Part 1 of 4)

Real estate investment is an opportunity to generate regular income and achieve capital appreciation in a stable asset held over a 5–15 year period. Real estate investors typically compare investment opportunities start by using one key metrics: Capitalization Rate, aka Cap rate.

In this article, we highlight how you should understand how to compute the cap rate and how to use cap rate when comparing different real estate crowdfunding investment opportunities.

This is part 1 of 4 articles covering the real estate cap rate:

  1. What is the real estate cap rate?
  2. What you need to understand about the real estate cap rate?
  3. How does the real estate cap rate form part of your investment analysis?
  4. How leverage helps you achieve your investment goal in real estate.

Part 1: What is the real estate cap rate?

Cap rate is the rate of return on a real estate investment property based on the income that the property is expected to generate. It is calculated by dividing the property’s net operating income (“NOI”) by the current market value or acquisition price of a property.

Capitalization rate = Net Operating Income / Current Market Value (Source: Investopedia)

Once an investor knows a property’s cap rate in a specific market, the cap rate can be used to compare with other types of real estate cap rates located in different markets around the world to understand which is more suitable to their investment preference. We have made a quick guide for you below:

Understand the Real Estate Cap Rate

That’s it!

Let’s use an example: an investor (Bill) wants to achieve a 12% annual return over 5 years by investing in real estate.

Bill decides to purchase an office building for $600,000 that generates $60,000 of net operating income (NOI), which represents a 10% cap rate. This means the property value would need to increase by at least 2% per year to meet Bill’s goal of 12% annual return.

Bill decides to achieve his investment goal by being more dependent on the cash flow (net operating income) generated as rent by the office building’s tenants, rather than a strong capital appreciation.

In this example, Bill is characterised as a defensive, income-based real estate investor seeking real estate investments that require minimal out of pocket expenses (e.g. refurbishments). In case you are wondering: yes, we will cover different investing style and types of investment play in future blog posts.

In Bill’s case, the cap rate is a key metric to begin his initial screen to compare real estate investment opportunities. For example, a shopping mall being sold at an 8% cap rate means that Bill would rely on (i) strong capital appreciation and/or (ii) leverage in order to achieve Bill’s goal of 12% annual return.

Cap rates are an important way to screen investments and narrow down a list of investment opportunities which suit your individual preference. Once you’ve decided on which investment opportunity to pursue, you will need to gain a better understanding of the real estate’s location and market conditions to form your investment analysis.

An important aspect here is timing — something which Denzity wants to clarify with ‘cap rate compression’, explained below.

What will we cover in Part 2?

We have just scratched the surface when it comes to cap rates! There are more metrics you should take into account when making an investment decision.

In our next article, we will discuss how you should understand and compare the cap rates of different types of real estate located in different places around the world to decide on which best suits your investment preference.

We at Denzity are here to help you understand the key metrics and provide insights. We hope these articles provide you with insight into the real estate investment process and journey!

If you’re not already signed up with Denzity, make sure to sign up to receive the latest updates!

Types of Real Estate Investment

Real Estate Crowdfunding provides Investors with the opportunity to invest and receive passive income from various types of real estate located in different parts of the world. Real estate consists mainly of residential, office, retail and shopping malls, industrial and warehousing, and hotels.

Investors should understand the real estate market’s underlying dynamic and outlook before investing in a particular type real estate matching their investment preference. In this article, we highlight the various types of real estate and key considerations before investing in a particular type of real estate.

Why office buildings are the backbone of real estate investment

Office buildings are generally located in cities and towns, the center of economic hubs with retail shops and hotels located in this area as they benefit from pedestrian foot traffic. Office buildings are the core of economic hubs as they provide citizens with jobs, which in turn fuels the economy as employees spend money at retail shops and restaurants.

Office buildings usually have a mix of tenants consisting of small and large companies to ensure stable rental income is generated over a 3 to 5-year time horizon or weighted average lease expiry (WALT), which is explained further in a subsequent post. As a result, rental income is consistently generated each month, even as office tenants move in and out of the office building, which results in what real estate professionals refer to as an occupancy rate.

Office rents are usually the highest among all types of real estate given their central location and function in the economic hub. During periods of economic growth, office buildings can generate high rental income and lead to strong capital appreciation, depending on other factors such as economic condition and supply of office building space in the city.

Office building typically forms the core of a real estate investment portfolio since the investment size is generally larger than others (residential, industrial) with potential for high and stable income generation making it an attractive investment.

Why invest in residential property as a landlord

Residential properties range from a small apartment to large housing complex generally located in close proximity to cities and towns. Residential property is the core type of real estate investment since it provides individuals with accommodation, a fundamental necessity, which makes it easiest to understand from an investment perspective.

Residential properties generally have a single tenant, small house or large housing complex with individual apartments, providing investors with greater accessibility in terms of investment size and tenant management. Single tenant means rental income can be ‘choppy’ as tenants move in and out of different homes, especially as their social behaviors change (e.g. starts a family, needs a larger space).

Residential property located within or close proximity to economic hubs generally carry the greatest value as individuals seek the convenience of a shorter commute to and from their office. Residential properties located close to hospitals and schools is also an important consideration, especially for residential homes suitable for families.

Residential property typically represents the highest yield among its peers in the real estate market. Real Estate Crowdfunding means Investors can obtain fragmented ownership in the residential property while holding other types of real estate.

Why invest in retail with the rising popularity of e-commerce

Retail property range from small shop fronts to large-scale shopping malls. Retail property is generally located within cities and towns to leverage on pedestrian foot traffic paying for products (groceries) and services (hairdressers).

Retail property generally has a single tenant (e.g. hairdresser, restaurant) seeking a shop where similar types of retail businesses are located to capture [like-minded] pedestrian foot traffic. Retail property is important to the makeup of a city or town but faces a key question as a type of real estate investment.

The popularity of online shopping, such as Amazon, questions whether retail property, especially large-scale shopping malls, will survive e-commerce retail. Retail shops located in city centers will attract higher-income consumers, especially tourists, with companies justifying retail rent as (physical) advertising and brand awareness expense alternative to digital marketing.

What the investment rationale is for an industrial property

Industrial property is generally storage warehousing that provides companies with the space to store products sold at retail shops in the city or online. Industrial property is usually located outside of cities and towns as it requires access to transportation networks, such as highways and airports.

Industrial property generally has several tenants sharing sections of a storage warehouse with different access to loading bays for trucking access. Industrial tenants leverage the cheaper cost of real estate in the outskirts since it primarily functions as a storage unit. Rental income generated from the industrial property is usually ‘smoother’ than residential as turnover within the industrial property is lower.

Industrial property benefits from retail consumption of products, whether at retail shops in city centers or through e-commerce. For example:

  • A retail shop located in the city center that sells music instruments would typically store large instruments (pianos, for example) in a warehouse on the outskirts. Once a customer orders a piano, for example, the store would package and deliver from the warehouse to the customer.
  • An e-commerce company selling books online would typically store books in a warehouse on the outskirts and once a customer orders a book, a shipping company would pick up from the warehouse and deliver to the customer.

As you can tell, both retail and e-commerce sales create demand for warehousing storage, whether it be the production or consumption of goods.

How do you invest in a hotel?

Hotel property generally ranges from small (50 rooms) to large hotels (500 rooms) located in cities and towns as temporary accommodation for travelers visiting the particular city or town for two key purposes: business travel and tourism. In addition to the size of the hotel (number of rooms), hotel guests usually seek a particular class of hotel (Holiday Inn vs. Four Seasons) during their stay.

Hotels generally have a single tenant, who manages hotel operations (a Hotel Management Agreement), with various retail shops and restaurants as other tenants within the hotel premises. An investor would enter a Hotel Management Agreement with a service provider and separately manage the retail shop and restaurant tenants, which leverage the capabilities of the hotel service provider.

In general, hotel property investment is considered a ‘trophy asset’ whereby it forms the ‘missing piece’ to complete a real estate investment portfolio. Real Estate Crowdfunding means an Investor could acquire a fragmented ownership in a hotel as part of their portfolio.

What other real estate investments are available

Other types of real estate investors would commonly acquire would be land, agriculture, schools, hospitals, docks, golf courses, to name a few.

Investors require a certain level of expertise in the particular type of ‘other’ real estate, for example, zoning requirements of land, operational needs of a hospital, or topography design of a golf course. This is where Real Estate Crowdfunding Platforms hire real estate professionals to provide relevant expertise, for example analyzing the market dynamics of land that is freehold or leasehold, which is explained further in a subsequent post.

In conclusion, Investors benefit from being able to identify the characteristics of different types of real estate (highlighted above) to make a comparison and decide on which opportunity best matches their investment preferences (size and time horizon of investment).

What’s up next? Denzity will cover the key considerations an Investor should make before making an investment in a Real Estate Crowdfunding project.

Introduction to Real Estate Crowdfunding

Real Estate Crowdfunding provides individuals with the opportunity to invest and receive passive income in real estate, one of the oldest forms of investment that has demonstrated a long history of consistent capital growth.

Crowdfunding in real estate means a number of individuals (“Investors”) combine their money to purchase a real estate property with a Real Estate Crowdfunding Platform (“Platforms”) that hire real estate professionals (“Sponsors”) to achieve the goals of income generation and/or capital growth. Investors have a lot of factors to consider when investing in real estate, let’s walk through step-by-step.

This article’s purpose is to explain the key considerations of Real Estate Crowdfunding so that Denzity users understand how to decide on a Real Estate Crowdfunding investment (“Project”).

How much to invest in Real Estate Crowdfunding?

Investors decide exactly how much they invest into a Project, regardless of the underlying real estate property’s value. Each Investor receives an ownership (in the form of shares) proportional to how much they invest — this is fragmented ownership.

For example, an Investor commits US$50,000 to a Project where the underlying property is valued at US$1,000,000 and generates net income of US$100,000 per year. The Investor’s fragmented ownership is 5% of the Project and would receive US$5,000 in passive income (5% of the property’s US$100,000 net income). In comparison, traditional real estate investment would have required the Investor to commit around US$200,000 and be liable to pay a mortgage payment every month, as a mortgagor.

Where to invest in Real Estate Crowdfunding?

Investors decide which real estate market to invest, usually based on the Platform’s expertise and investment objectives. Each property type (e.g. residential versus hotel versus office) requires specific knowledge held by real estate professionals to match the property’s net income and value with the Investor’s investment objectives.

Investors would typically select a developed real estate market (New York or London, for example) where rent is generated in a commonly held currency (United States dollar, British pound) to generate stable passive income and capital appreciation. In contrast, Investors seeking large capital appreciation would seek an emerging real estate market for long distance real estate investing like Vietnam, for example.

Which type of real estate property to invest in?

Investors decide which type of real estate property to invest and obtain fragmented ownership in a Project, for example, a residential home, office building, or industrial warehouse.* Each real estate property has different characteristics and Investors should decide based on their individual investment preference for risk and return.

*We will talk more in-depth about the various real estate property types in the future.

Which Platform should I invest in Real Estate Crowdfunding?

Platforms will typically be focused on a certain real estate market geography and type of property. As a result, Platforms will hire a team of real estate professionals with specialized knowledge in its focus areas. As an Investor in a Project, the Platform provides you with fragmented ownership but has sole discretion in operating and managing the Project.

Investors should decide whether to proceed with a given Project having made careful consideration of the Platform’s track record and reputation. Denzity provides users with the relevant information to make an informed investment decision on Projects and Platforms.

How long should I invest in a Real Estate Crowdfunding Project?

Each Project will have a different investment (time) horizon. While equity crowdfunding (usually 3–5 years) is typically longer than debt crowdfunding (usually 2–4 years) it can provide a higher return to investors (around 5–15% for equity vs. 7–10% for debt crowdfunding). Based on the investment horizon, Investors can decide how much to invest in any given Project.

In conclusion, each Investor can decide exactly how much to invest in any given Project with consideration to the Platform’s track record and reputation towards achieving passive income and capital appreciation through fragmented ownership in Real Estate Crowdfunding.

What’s up next? Denzity will cover the various types of real estate properties available for investment and highlight the considerations each investor should make before investing.

Stay tuned!

Denzity Team