The UK has been going through a housing crisis. In recent decades, the cost of buying a home has skyrocketed faster than wages, leaving many workers priced out of the market. In some parts of the country, low-deposit mortgages are no help, as potential homeowners cannot afford the monthly repayments on the mortgages they will need, thereby leaving them in the position of needing to save large sums to put down. The COVID-19 pandemic worsened this crisis further.
This is where companies such as Shojin Property Partners come into play and make property investment accessible, simple and affordable. The FCA-regulated online real estate investment platform based in London has now raised its first tranche of £3 million via a global pool of investors. With this round, the company has reached a valuation of £49 million. Given its growth in the past 12 months, Shojin launched the next tranche of funding to raise a further £2 million at a £55 million valuation as well.
This fundraise is positioned alongside a £5 million underwriting facility, which was provided by a London-based family office to increase it to £10 million. It guarantees to fund for mid-market real estate investment opportunities before they go live to investors.
Global expansion plans
Until now, Shojin Property Partners has an exclusive focus on the UK property market. Recently, as it closed its first non-UK real estate investment in Malaysia, the company intends to use the funds to grow its operations team with new hires in deal origination, marketing, technology and risk management as it ramps up global expansion plans.
The additional £2 million corporate raise will primarily be invested into the company’s data-driven marketing campaigns as Shojin sets its sights on new investment opportunities across the globe.
Responding to TFN, Jatin Ondhia, co-founder and CEO of Shojin Property Partners, says: “We will be using the investment to really promote the Shojin brand as we move from startup to scaleup. We recently made our first overseas investment in Singapore, which was an exciting step as we look at other target markets across the globe. To help support out expansion, we recently hired Peter Grange as Chief Marketing Officer (CMO). The appointment comes at a pivotal moment for us as we look to close our Series A and ramp up our marketing efforts to get the Shojin investment concept out to as many people as possible.”
Online real estate investment!
Founded by Jatin Ondhia and Sandeep Puri, Shojin operates in the online real estate investment market, which is estimated to grow from $15 billion in 2021 to $800 billion by 2027. The company was created to make investing into mid-market property developments simple and affordable through co-investment while providing developers with a consistent and trusted source of junior finance. Shojin enables intelligent investors from over 40 countries to access this market from as little as £5,000. To date, Shojin has raised over £38 million across 30 projects.
What makes Shojin different in this market is its unique approach. The company does not charge any management fees. Instead, it shares the profits with investors. Typically, Shojin will take 20% of any profits, which is touted to be fairer than taking large upfront fees. The returns seen on the website are always shown after the profit share has been taken. To cover some of the transaction costs, it charges an initial administration fee equivalent to 2% of investor funds.
What does Shojin do?
The company provides access to institutional-grade investment opportunities in the UK real estate sector to investors around the world. Increasing legislation on buy-to-let opportunities has led many investors to seek alternative ways of driving returns in the property market. By identifying attractive opportunities, it offers these investors an alternative way to invest in bricks and mortar, thereby striving to deliver returns superior to those available elsewhere in the market.
Jatin Ondhia said, “We launched Shojin because we realised that the majority of real estate investments were completely unattainable and inaccessible aside from for the wealthiest individuals. Therefore, we created a model that lowers the barriers to entry across the globe looking to access institutional-grade real estate investment opportunities in the UK. The platform is designed to make property investment accessible, simple and affordable.”
Regarding the problem that they solve, he said, “Shojin is different because we’re not a marketplace, crowdfunding platform or a silent partner. We identify developments and initially reject 95% of the projects we identify. Our due diligence approach ensures that we are choosing the most promising projects and the very best investment opportunities. What also makes us unique, is that we don’t just identify the opportunities, we always co-invest alongside our clients and provide the junior finance which enables investment at the development stage.”