Relendex on verge of P2P failure

Relendex on verge of P2P failure




Four months after its launch, Relendex, the secured P2P lending platform for commercial property investments, is seemingly on the brink of failure .

Four months after its launch, Relendex, the secured P2P lending platform for commercial property investments is seemingly on the brink of failure.

Relendex launched in April this year as the “first peer-to-peer lending exchange” for commercial property loans with an aim of raising £250 million of funding.

However, the only loan deal advertised on its platform, which was due to expire today, has once again been extended; a clear sign that the platform is struggling to source investors for the deal.

The deal, against student accomodation units in Wales, had just 29 per cent of the deal funded by peers as of last week. Today, the platform states that it has secured 32 per cent of funding, but that the expiry date for investors to fund the loan is now the close of business on 30th August.


Screenshot showing 23 per cent funded as of 1st August.

For its launch, Relendex had taken on ex-astl CEO Adrian Bloomfield on an advisory basis. The lender had also announced that it had appointed Mirabaud Securities, one of Switzerland’s oldest and most well-regarded private banks, to raise up to £250 million from private and institutional lenders to invest in commercial property loans via its online exchange platform.

Adrian commented at the time: “I am proud to be associated with Relendex and to offer strategic advice about the lending and banking type issues. I have been impressed with the professionalism and expertise of the management team and I am confident this will turn out to be a highly successful business delivering an excellent service both to investors, lenders and to borrowers.”

Investors are able to take a share of fixed interest loans, from £500,000 to £25 million, secured on income-producing commercial properties.
 
Relendex markets itself as a transparent lender as all loan documentation fully disclosed, with valuations and title reports available for viewing in a secure virtual data room. However, how can it be truly transparent when the loan is constantly being extended?

The deal can’t be deemed a failure though until Relendex pulls it from the platform but, as stated earlier, it has been up for several months now and the time left on the auction has been extended multiple times.

The Summary of the Loan Auction



With the large amount of advertising the platform has conducted, including in the FT and Sunday Times, it is clear that the platform is struggling to get anyone interested in investing through the platform.

The particular deal, to be fair to the platform, is a loan against a student accommodation hall in Wales, which does not provide good security for investors in a market that has recently had a lot of major issues.

Investors for the loan have been offered a 5.25 per cent return, which when linked with the security, is obviously placing a factor on why investors aren’t participating in the loan and the asset.

Other platforms
Other property P2P platforms are working well within the marketplace, including the LendInvest platform, which has traded almost £5 million through the platform already.

LendInvest is associated with bridging lender Montello, so has access to some of the best underwriting processes and fraud detection systems in the market. Due to this association the platform has access to a huge amount of potential deal-flow.

This platform offers investors the ability to invest in both newly originated loans and also secondary market loans. It is also focussed on residential and commercial mortgages (Relendex is only focussed on commercial lending and only for new originated loans).

Future?
Recent research by the Open Data Institute (ODI) and supported by the Bank of England, confirms that the UK's peer-to-peer lending market is growing rapidly, having trebled in size in the last three years. According to the ODI research, the market is set to grow to over £1.6 billion by 2016.

Does this news about Relendex show that when it comes to property within the peer-to-peer industry, it is an entirely different ball game, especially if you are a new lender? There are successful platforms at present, but don’t expect to see a huge rush of new P2P lending platforms dealing with property coming in thick and thin, unless they are linked to existing lenders or platforms.

From track record, the platform is unlikley to reach the total amount by the end of this month. What will happen now is unclear, but there are several questions that spring to mind: Have all the investors been informed of the numerous extensions? Will its aim of raising £250 million of funding have to be amended swiftly? What will the fate of Relendex be?

Relendex declined to comment to B&C.

3 Comments

  • Photo

    Happy Chappy

    Handbags ladies!

  • Photo

    Michael Lynn

    John Dode has never worked for Relendex.

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    John dode

    I worked for this company from the outset untill i was unfIrly dissmissed. But im glad i left when I did as I was becoming increasingly aware the management have no idea how to run an Internet based business

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