SIMON BROWN: I’m chatting now with Rupert Finnemore, CEO of EasyProperties. Rupert, good morning. I appreciate the time. EasyProperties has turned one year old, which means we chatted about a year ago about it. I hope you had cake and bubbles in the virtual offices, although in the lockdown maybe no bubbles. How’s the first year been? From stats you put on Twitter late on Friday, you’ve got 30 000 investors. I remember working for a stockbroker 15 years ago, which [then] had 30 000 investors on the JSE. By all accounts, it’s been a good first year
RUPERT FINNEMORE: Yes, I think it’s been a really good first year. I suppose in some respects it feels kind of weak from a business point of view – 10 years in a lockdown year. It’s fantastic that we’ve got 30 000 investors. The IPOs have all gone well. Yes, it’s been terrific.
SIMON BROWN: Part of the logic behind it was that this could be for smaller investors. If I just run the numbers, you said you’ve got units worth about R115 million. That’s a little under 4 000 per investor. Part of the attraction, as I understand, is that what EasyProperties is offering is the ability to invest directly into a residential property with a bunch of other investors for a relatively modest amount of money.
RUPERT FINNEMORE: Yes, that’s exactly right. One of the major friction points that people who want to invest in property have is the huge outlay of cash that is required. For our investors there are no minimums; you can invest as little as R1 if you want. I think it’s probably best typified by our latest Polofields development; it was about an R16 million raise, and we’ve had over 13 000 people buy into those units. That’s R4 000 obviously across all of the portfolios, but the average investment size per property investment is about R1 300.
SIMON BROWN: No more do I need a million bucks or a giant-sized bank loan. How’s the process been? Obviously, you mention the pandemic. You could have picked a harder year – although I’m not sure where you would have found it. The flip side is obviously rentals and that part of the process. How’s that part going? As I understand, you have a third party managing that – that’s obviously not your skillset, but has that been going fairly well?
RUPERT FINNEMORE: Interestingly, that’s been one of our challenges and I think one of the early learnings. Absolutely, launching a business in the middle of a pandemic is an interesting one, though obviously a very well-tended soil to be able to launch a business into the EasyEquities environment. So we’ve been really spoiled in that regard.
Originally we were outsourcing that rental management. It just turned out that, as we handed over our first 40 units, that rental management company went into business rescue.
SIMON BROWN: Oh no!
RUPERT FINNEMORE: It was one of the major challenges; we had to pivot really quickly. We just decided that no one’s got a better incentive in looking after our portfolios than we do. Thankfully we do have the skill set involved, so we kind of ‘turned on a tickey’ and built a rental portfolio management capability, and we are busy scaling as our portfolio scales as well. So that was an interesting one. It was probably brought on a year quicker than what we anticipated, but it was always our goal to look after our own portfolio. We just had to get a hurry-up on that.
SIMON BROWN: How many units are there in total? About R115 million [worth]? How many units do you now have?
RUPERT FINNEMORE: We have 100 units [valued at R115 million], Simon.
SIMON BROWN: Okay. That’s quite chunky. Returns so far? As I understand, it’s a five-year term so there haven’t been exits, but have there been dividends at this point?
RUPERT FINNEMORE: I think that was actually one of the highlights. We’ve paid 15 dividends so far across the different portfolios in four chunks, and we’ve got another one coming up towards the end of the month as well. So yes, we paid out quite a few dividends.
You talk about the investment term, and I think another one of the highlights and one of the friction points that we were trying to solve for is the liquidity around traditional investing in property. So we’ve also held our first auction, which enables a bit of liquidity to guys who list, and that went well. I think we were all quite nervous, me especially, as to what the kind of take-up was going to be and how many shares in these investments were offered up for sale, and we were really delighted. Less than 10% of the available shares were put up for auction and the really pleasing thing was that demand outstripped the suppliers of those shares quite well. So it was a positive experience all around.
SIMON BROWN: I’ve got to be honest, when we chatted a year ago that was what I looked at and thought, ooh, that could be the sticking point. But that went well, so that’s worked there.
What has your yield been over the period if you’ve been paying some dividends, or has there not been enough time? If you’re a year old you’ve only just really got the few properties that are one year old; the rest would be short-term.
RUPERT FINNEMORE: Yes. Actually, none of them is a year [old] yet. We had to raise in the beginning and wait for the transfer and all of that, so we are coming up to a year. Each one of those property investments offers different and differing yields, but at the moment we are beating those kinds of yields in the dividend that we returned to the guys. That’s obviously pleasing.
SIMON BROWN: Rupert Finnemore, CEO of EasyProperties, on their first birthday, congrats and looking good. Thanks for the early morning time.
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