Mission
Bring together real estate investment platforms globally to help accelerate the adoption of digital real estate investment by building (1) investor confidence through standardisation, and (2) liquidity and choice by creating a central marketplace.
Collaboration
Standardisation
Marketplace
Liquidity
- The association will give investment platforms the opportunity to connect with each other and share knowledge, discuss opportunities and find solutions to challenges, and importantly work toward standardisation and increasing market liquidity.
- In addition to establishing standards and a centralised trading venue, investment platforms must manage business risks, including regulatory risk. Often the core mandate of financial services regulators are to (1) protect consumers (2) encourage competition and (3) encourage the efficient functioning of markets. For a regulator to achieve its mandate and implement well thought through rules and policies that achieve an optimal outcome, it must engage market experts to access clear information on the nascent sector.
- To best represent the sector, AREIP gives its members the venue to collaborate with peers to provide a thoughtful and comprehensive response to financial services regulators and policy makers, as a single voice.
- Member collaboration can also help achieve better commercial arrangements with sector service providers such as banks.
- AREIP members need to achieve standardisation in the following areas: (1) terminology, (2) investment descriptions and data, (3) risk scoring, and (4) operations including technology.
- Standardisation will help establish common undisputable investment information and risk scores. By doing so it will improve investment transparency and build investor confidence. For the investment platform operators, it will lead to operational efficiencies and increased trust, because investors will be able to better understand, evaluate and compare investments and their associated risks. This will ultimately lead to increases in transaction volumes.
- In this nascent market standardisation is essential to assist with market growth and can only be driven and agreed upon by experienced market operators i.e. real estate investment platforms.
- The success of a financial market is determined by the number of market participants and the volume of transactions. The more participants and the more transactions the more liquid the market is. Liquidity is a key factor to build investor confidence. The more liquid a market is, the easier and quicker it is to buy and sell securities/investments. This is important since, an essential part of an investors initial investment decision is whether they can sell and exit their investment if they need to, in other words the degree of liquidity influences the initial investment decision .
- By creating a central trading venue, investment platforms from multiple jurisdictions will be able to list their investments in front of a much wider audience of investors. Additionally, the marketplace will give investment platforms cost savings in terms of technology, operations and compliance. Investors will have access to a much wider choice of investment opportunities and benefit from using a single application to meet all their digital real estate investment needs.
- The central trading venue is only possible if many investment platforms come together to complete the standardisation process. AREIP members will also have input into the design of the marketplace, which is an ideal environment to foster market liquidity.