Representative and secretary of the association (co-representative Sugimoto in the center, co-representative Muto on the right)
The inaugural general meeting of the Japan Real Estate Crowdfunding Association (JRCA), an informal organization consisting of operators engaged in real estate crowdfunding services under the Real Estate Specific Joint Venture Act, took place on the 29th at the Second Members' Office Building of the House of Representatives.
Real estate crowdfunding (CF) is anticipated as a tool for addressing local issues such as vacant properties, unused real estate, and the utilization of municipal assets. The number of new entrants in the market is increasing. In the fiscal year 2022, the amount raised through investment solicitation was approximately 60.4 billion yen (2.61 times the previous year), and the number of projects increased to 419 (1.85 times the previous year), indicating an expansion in market size. However, issues such as the lack of assurance of the quality of operators have led to disputes between operators and investors.
To address this, JRCA aims to establish self-regulatory rules to ensure investor protection. Additionally, through initiatives such as the parliamentary league for real estate crowdfunding, set to launch in December with the central involvement of Representative Seiji Kihara, the association plans to make policy recommendations for solving local issues through real estate crowdfunding. In terms of self-regulatory rules, the association aims to enhance the strictness of solicitation and advertising requirements for investor protection beyond the application requirements of the Ministry of Land, Infrastructure, Transport and Tourism. It also plans to promote information disclosure, including the financial details of operators. Furthermore, the association intends to foster collaboration with the Real Estate Crowdfunding Association, established in August, for information exchange and other purposes.
Mr. Muto, CEO of LAETOLI Inc., and Mr. Sugimoto, Chairman and Group Executive Officer/CEO of C-TECHNOLOGIES Inc., have been appointed as co-representatives. At the time of establishment, approximately 30 companies joined. Mr. Sugimoto stated, "By becoming a member of this association, businesses can demonstrate their reliability. We hope that all companies engaged in real estate crowdfunding will join in the future."
During the general meeting, Mr. Muto explained the significance of the association, saying, "The key to the momentum of the Kishida administration's 'from savings to investment' initiative lies in investment in real estate. While the market size and the number of operators are increasing, it is a responsible job, and self-regulation by industry groups is necessary." Mr. Sugimoto expressed his aspirations, stating, "Approximately 90% of public facilities are operating at a deficit, and aging is progressing. By using real estate crowdfunding to gather funds online, we can achieve revitalization with the nation's money."
Reprinted from: Real Estate Distribution Research Institute Co., Ltd. “R.E.port”
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