Where Did Lithuanians Invest Almost €10 Million Per Month?
In May alone, retail and professional investors on the real estate crowdfunding platform "Röntgen" raised a record EUR 9.3 million. Not long ago, this amount would have equaled the platform's results for an entire half-year. What does such strong interest in real estate-backed loans indicate about Lithuanian investors?
Crowdfunding itself has been a regulated activity under Lithuanian law since 2016 and is supervised by the Bank of Lithuania. It connects real estate developers with business ideas to investors looking to put their money to work. Before the advent of crowdfunding platforms, real estate development was financed by banks, funds, or was accessible only to the largest investors. Crowdfunding platforms have opened up this opportunity to everyone.
Crowdfunding is rapidly gaining popularity in Lithuania. According to the Bank of Lithuania, the country's entire crowdfunding market grew by 40% last year, reaching EUR 161 million, increasingly positioning itself alongside other major investment options such as investment properties, stocks, or funds. However, the "Röntgen" platform is growing even faster – just recently, the amount raised by investors in May would have been equivalent to half a year's results. Since the beginning of this year, "Röntgen" has already raised EUR 19.7 million – just a few million euros shy of the total for 2022. What is driving this breakthrough?
According to Greta Zarembien?, Head of Investor Relations at "Röntgen", the platform's recent results are due to a combination of several strong trends: changes in Euribor rates and flexibility for real estate developers have made platforms more competitive than banks or funds, while investors appreciate the solid fixed annual returns of 7-10% and investments secured by real estate collateral. Specifically, in the case of "Röntgen", one of the most conservative and strictest project selection strategies in the market contributes to the platform's success, as it has resulted in fully fulfilled commitments and no loan delays to date.
"Regarding developers, with the rise in Euribor interest rates, project financing through platforms has become highly attractive to them. Although the housing market remains moderate, ongoing projects continue, and new ones are starting, so financing for developers was and still is necessary. On the other hand, investors are turning to the platform for various reasons: some find a fixed return more attractive today than the fluctuating stock markets, others appreciate the short investment terms of 6-18 months. Ultimately, under today's circumstances, the needs of most investors are well met by a 7-10% annual return secured by collateral worth significantly more than the loan," says G. Zarembien?.
She notes that the only notable concern associated with crowdfunding today is the increased number of delayed loans in the market. However, "Röntgen" is one of the few platforms in the market that has managed to avoid these challenges.
"Returns on platforms should not be the primary criterion. During a challenging economic period, it is worth choosing platforms and projects with carefully assessed and transparently communicated risks. This "Röntgen" strategy has never allowed the platform to be the market leader in interest rates, but that has never been our goal. For our investors, it is much more important that commitments are met on time and without complications," says G. Zarembien?.
In the record-breaking month of May, "Röntgen" platform investors financed new and ongoing real estate projects in Vilnius such as "B Kvadratu," "Vilniaus Džiazas," "We Loft," "Lazdyn?liai Pictures," "Horizontai," "Linkmen? 4," and "Kaip Niujorke by Citus". These projects illustrate the platform's diversity and focus on larger, experienced developers' projects. "Röntgen" investors can choose for themselves the extent and which projects to invest in, whether still in development or already completed. The average annual interest rate for the projects financed in the record-breaking month of May was 9.7%.
At the beginning of the year, "Röntgen", together with the KOG Institute for Marketing and Communication Sciences, conducted a survey of 500 investors. According to the results, investors who have not yet tried real estate crowdfunding still consider real estate purchases, stocks, and funds to be the most reliable investment tools. However, among users who already use platforms, real estate crowdfunding is regarded as the most valuable investment tool by a significant margin. According to G. Zarembien?, all these data and results send a strong signal that the platforms are worth at least trying with the minimum possible amount of EUR 100 to make conclusions for oneself.
"I understand those who are hesitant – starting to invest during a challenging economic period can seem daunting. For some people, owning physical property, even with a bank loan, provides more psychological and emotional peace of mind, sometimes outweighing the mathematical benefits. However, a challenging economic period also has its advantages, such as the opportunity to lock in a much higher investment return than last year. While all investments involve risks, every investment journey must have a beginning. It is always a good time to try and see for oneself, and "Röntgen's" experience and statistics show that we are attractive to investors in both good and challenging times," asserts the Head of Investor Relations at "Röntgen", which manages an investment portfolio of nearly €30 million.
Where Did Lithuanians Invest Almost €10 Million Per Month?
In May alone, retail and professional investors on the real estate crowdfunding platform "Röntgen" raised a record EUR 9.3 million. Not long ago, this amount would have equaled the platform's results for an entire half-year. What does such strong interest in real estate-backed loans indicate about Lithuanian investors?
Crowdfunding itself has been a regulated activity under Lithuanian law since 2016 and is supervised by the Bank of Lithuania. It connects real estate developers with business ideas to investors looking to put their money to work. Before the advent of crowdfunding platforms, real estate development was financed by banks, funds, or was accessible only to the largest investors. Crowdfunding platforms have opened up this opportunity to everyone.
Crowdfunding is rapidly gaining popularity in Lithuania. According to the Bank of Lithuania, the country's entire crowdfunding market grew by 40% last year, reaching EUR 161 million, increasingly positioning itself alongside other major investment options such as investment properties, stocks, or funds. However, the "Röntgen" platform is growing even faster – just recently, the amount raised by investors in May would have been equivalent to half a year's results. Since the beginning of this year, "Röntgen" has already raised EUR 19.7 million – just a few million euros shy of the total for 2022. What is driving this breakthrough?
According to Greta Zarembien?, Head of Investor Relations at "Röntgen", the platform's recent results are due to a combination of several strong trends: changes in Euribor rates and flexibility for real estate developers have made platforms more competitive than banks or funds, while investors appreciate the solid fixed annual returns of 7-10% and investments secured by real estate collateral. Specifically, in the case of "Röntgen", one of the most conservative and strictest project selection strategies in the market contributes to the platform's success, as it has resulted in fully fulfilled commitments and no loan delays to date.
"Regarding developers, with the rise in Euribor interest rates, project financing through platforms has become highly attractive to them. Although the housing market remains moderate, ongoing projects continue, and new ones are starting, so financing for developers was and still is necessary. On the other hand, investors are turning to the platform for various reasons: some find a fixed return more attractive today than the fluctuating stock markets, others appreciate the short investment terms of 6-18 months. Ultimately, under today's circumstances, the needs of most investors are well met by a 7-10% annual return secured by collateral worth significantly more than the loan," says G. Zarembien?.
She notes that the only notable concern associated with crowdfunding today is the increased number of delayed loans in the market. However, "Röntgen" is one of the few platforms in the market that has managed to avoid these challenges.
"Returns on platforms should not be the primary criterion. During a challenging economic period, it is worth choosing platforms and projects with carefully assessed and transparently communicated risks. This "Röntgen" strategy has never allowed the platform to be the market leader in interest rates, but that has never been our goal. For our investors, it is much more important that commitments are met on time and without complications," says G. Zarembien?.
In the record-breaking month of May, "Röntgen" platform investors financed new and ongoing real estate projects in Vilnius such as "B Kvadratu," "Vilniaus Džiazas," "We Loft," "Lazdyn?liai Pictures," "Horizontai," "Linkmen? 4," and "Kaip Niujorke by Citus". These projects illustrate the platform's diversity and focus on larger, experienced developers' projects. "Röntgen" investors can choose for themselves the extent and which projects to invest in, whether still in development or already completed. The average annual interest rate for the projects financed in the record-breaking month of May was 9.7%.
At the beginning of the year, "Röntgen", together with the KOG Institute for Marketing and Communication Sciences, conducted a survey of 500 investors. According to the results, investors who have not yet tried real estate crowdfunding still consider real estate purchases, stocks, and funds to be the most reliable investment tools. However, among users who already use platforms, real estate crowdfunding is regarded as the most valuable investment tool by a significant margin. According to G. Zarembien?, all these data and results send a strong signal that the platforms are worth at least trying with the minimum possible amount of EUR 100 to make conclusions for oneself.
"I understand those who are hesitant – starting to invest during a challenging economic period can seem daunting. For some people, owning physical property, even with a bank loan, provides more psychological and emotional peace of mind, sometimes outweighing the mathematical benefits. However, a challenging economic period also has its advantages, such as the opportunity to lock in a much higher investment return than last year. While all investments involve risks, every investment journey must have a beginning. It is always a good time to try and see for oneself, and "Röntgen's" experience and statistics show that we are attractive to investors in both good and challenging times," asserts the Head of Investor Relations at "Röntgen", which manages an investment portfolio of nearly €30 million.
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"Trečia diena" UAB, which operates the Röntgen platform, is a licensed crowdfunding platform. The platform is governed by the EU Crowdfunding Regulation and is supervised by the Bank of Lithuania in accordance with the law.