‘Reinventing’ commercial property
Entrepreneur Mark Hurley has his sights set on ‘‘reinventing’’ commercial property investing using technology to open it up to many more people.
Hurley and partners have founded and launched proptech startup Jasper, a digital platform through which investors large and small can buy ‘‘fractions’’ or shares in commercial property.
Hurley is a well-known entrepreneur who sold his highly successful marketing business, Little Giant, 18 months ago to global marketing group Dentsu Aegis Network.
He said Jasper was the first of its kind in New Zealand and was a technology-led approach to commercial property investing.
Direct ownership of commercial property had required a lot of capital upfront or buying shares in a property syndicate but Jasper would change all that, offering many more people the opportunity to invest in it and make it more efficient to do so, he said.
Signing up as an investor took less than two minutes on Jasper and involved less paperwork than a traditional property syndicate investment. Investors would be able to build up their property portfolio, buying shares in a selection of commercial properties chosen by an expert team.
Hurley said a lot of information on the properties would be on the website, and the reasons for their selection.
‘‘With Jasper, investors will be able to buy fractional portions of commercial properties online, receive regular dividends from the property’s rental income deposited directly into their bank account, and then sell their shares through Jasper’s online secondary market as they desire.’’
The business was born out of his own frustration with accessing commercial real estate investment following the sale of Little Giant. It was a desirable investment class but difficult for many people to get into.
Once the business had built up scale, the aim was to offer low fees and low minimum investment in properties. Fees for various services – like lawyers, brokers, accountants – now typically amounted to about 10 per cent of the capital raised to buy the property and Jasper wanted to halve that.
The business would also aim to improve the liquidity of property investments (the ability to sell the investments easily) by setting up a secondary market place where investors could sell their commercial property investments.
Jasper was owned by Jasper Property Limited and would be essentially a fund manager, Hurley said. It was registered with the Financial Markets Authority (FMA) as a financial services provider.
But to sell commercial property to retail or small investors Jasper had to be licensed by the FMA. The business hoped to be licensed during the first quarter of next year.
In June, Jasper Property raised $1.025 million to set up the business, using the capital to develop the technology, hire key team members, get together a pipeline of potential investments, and gain regulatory licensing here and in Australia.
Hurley, Mark Campbell and Oliver Shaw founded Jasper and are the largest shareholders.
Investor in new enterprises, Icehouse Ventures, is an 8.7 per cent shareholder and Kea New Zealand chief executive Craig Donaldson has a small shareholding.
Hurley has a tech background and Campbell brings property expertise to the company. Campbell recently led a $12 billion joint venture between a US private equity firm and M7 Real Estate.
Hurley said Jasper would not own the properties or manage them. It would work with various operating partners who would carry out those functions.
The principals of Jasper Property would take stakes in the properties individually alongside other investors.
Jasper offered its first commercial property, an industrial building on Holmes Rd in South Auckland, to ‘‘wholesale’’ investors recently. Wholesale investors are habitual and knowledgeable investors who understand financial products and their risks and have considerable net worth.
Thirty-six investors subscribed the $1.86m requested for the splittenanted industrial building which cost $3.48m. The investments ranged between $25,000, the minimum, and $100,000.
Hurley said the building was forecast to return 7 per cent a year in cash to investors over the target five-year hold period.
Jasper’s second commercial property was expected to be available on the platform early next year, with minimum investments expected to start at $5000.
Signing up as an investor took less than two minutes on Jasper and involved less paperwork than a traditional property syndicate investment.