SmartCrowd generally targets a holding period of 2–5 years, with historical average exits occurring around 3 years.
However, there is no strict time limit on how long you can hold a property investment.
Investors can exit their investment in two ways:
(1) by voting to sell the property, or
(2) by listing their shares on the Share Transfer Facility.
Voting to Sell At the end of the recommended holding term, a mandatory vote is called where investors are given the option to sell their investments at market value (each property is evaluated by an independent Real Estate Regulation Authority (RERA) approved valuator). However, this vote can be called sooner by SmartCrowd, or any of the investors for valid reasons (i.e. there’s opportunity to make a handsome profit). The vote is based on the proportionate weighting of your investment. That means, if you own 10% of the shares in a property, your vote carries a 10% weight. We don’t allow anyone to own more than 24.99% of a property. This is designed to ensure that no one is a controlling party.
Share transfer facility We launched our Share Transfer Facility in the second half of 2022, allowing you to sell your shares at periodic intervals within a year to other investors on the platform (given that your property qualifies for the Share Transfer Facility – typically properties older than a year). The transfer facility is operational for 2 weeks every 6 months in March and September. This allows you to plan your exits or increase your exposure in certain properties by buying shares from other investors. Remember, real estate should not be treated as a speculative asset. It is a great investment for those who have the appetite to weather out short-term economic fluctuations Eligibility for the Share Transfer Facility begins 12 months after the property transfer. Additionally, SmartCrowd provides email instructions to investors ahead of each STF window to guide them through the process.
Eligibility Criteria for Listing Investments on the Share Transfer Facility (STF)
To ensure compliance with platform policies and regulatory requirements, property shares become eligible for listing on the STF only after a 12-month period has elapsed. This 12-month period is calculated from the date the property is transferred into the Special Purpose Vehicle (SPV) registered in the Dubai International Financial Centre (DIFC). This date is referred to as the SPV registration date.
Key Points:
The 12-month period begins on the SPV registration date, which is when the property is officially transferred into the SPV.
Shares cannot be listed on the STF until this 12-month period has passed.
Common Questions:
Why are my investments not eligible for the STF yet? If your investments are not yet eligible for listing on the STF, it is likely because the 12-month period from the SPV registration date has not yet elapsed. This rule ensures that all properties meet the necessary holding period before being listed for sale.
How is the SPV registration date determined? The SPV registration date is the date on which the property is officially transferred into the SPV registered in the DIFC. This date marks the start of the 12-month eligibility period. Understanding the eligibility criteria for the STF is crucial for planning your investment exit strategy on SmartCrowd. Always ensure that the 12-month period from the SPV registration date has passed before attempting to list your shares for sale.