Ann: Change of Director's Interest Notice, page-8

We should hopefully get an update soon about the LiveOffer Auction platform and trial partners.  

From the Market Update of 28 May 2018:  

"Property Connect is pleased to advise that it is ahead of schedule for the completion of the development of the LiveOffer Auction platform, which was previously announced in investor decks as due to be completed by the end of June 2018. As a result, trial and commercial conversations continue with local real estate agents and property developers about utilising the LiveOffer Auction platform once completed."

Seeing as we are approaching the end of the financial year, I thought that it would be a good time to look back on the past year and consider what other updates/news we might see in the future:

THE RENTAL PLATFORM

1. McGrath  

According to an excerpt from McGrath Lower North Shore (in their March 2018 newsletter) available on the Property Connect website (at https://propertyconnect.com/blog/):

"... we have successfully been running trials on this technology since the new year.  We will soon be able to open up the portal to landlords to be able to view, and follow the bidding as it occurs."

2. Century 21

From the Market Update dated 20 March 2018:

"Other trials of the residential leasing LiveOffer platform are already being undertaken in Sydney’s North Shore with McGrath, and Century 21 offices in Victoria and Western Australia. As previously announced, Property Connect has received positive feedback on the LiveOffer platform and is working closely with managers trialling the platform to optimise its features before entering into formal commercial arrangements."

3. Real Estate Dynamics

From the market update dated 28 May 2018:

"Discussions regarding the commercialization of LiveOffer Rental through partnerships and strategic alliances are progressing across various markets in Australia and overseas. These include advanced discussions for licensing arrangements in Australia with Real Estate Dynamics."

From the Market Update dated 8 May 2018:  

"In conjunction with these direct sales activities the Company is also in advanced discussions with Real Estate Dynamics about partnership activities to onboard progressive agencies, who are looking to optimise their rent rolls and achieve the sort of scale and benefits that the Live Offer platform brings for agents, landlords and renters. The Live Offer Platform delivers cost efficiencies and transparency to the renting process."

4. Potential other partners

From the Appendix 4C dated 31 March 2018:

"The Company is in continued discussions with McGrath, CBRE, The Little Property Group and Domain about the commercialisation of its LiveOffer Rental platform as well as its LiveOffer Auction offering. There are numerous other parties also interested in the space, but commercial discussions remain nascent at this time."

5. Overseas Jurisdictions

From the Heads of Agreement Announcement (in relation to Dubai) dated 12 June 2018:

"Discussions ongoing for strategic partnerships for LiveOffer platform in Singapore, Hong Kong and Malaysia"

WILL THERE BE AN ACQUISITION?

6. From the market update dated 28 May 2018:

CEO of Property Connect, Darren Patterson, said: “... In addition, the Company continues to explore opportunities for the acquisition or development of complementary products to enhance our first mover advantage in this market.”

The November 2017 presentation refers to "M & A Bolt-ons" as part of the strategy recap.  

From the October 2017 Annual Report:

"The Company will also investigate further opportunities to develop other real estate technology products in the Australian market, either principally or in conjunction with other parties."

THE AUCTION PLATFORM

7. PEXA

On page 14 of the investor presentation from April this year under the heading of "Activity Update LiveOffer Auctions" states that: "State Governments have legislated for electronic conveyancing - PEXA".  Page 17 lists PEXA under the heading of "Partner with to extend LiveOffer Platform".  

8. Property Sales Funnel Enablers

Page 15 of the investor presentation in April 2018 refers to Property Sales Funnel Enablers.  That slide is also on the blog at the Alchemy Ventures website which is available at: http://www.alchemyventures.com.au/journal/ The blog article, Taking Down a Bank by #crushinit, dated 5 April 2018, is an interesting read, and I highly recommend reading it in its entirety.  Perhaps some of the key passages are:  

"The benefit of this model over traditional property sales, will be tested first with off the plan developments. This segment of the property market is subject to cyclical movements, driven not only by local demand, but also offshore demand, and changes in banking lending practises. Using an automated and online platform facilitates AML/KYC and FIRB requirements for property investment, but also facilitates project sell through. ...

As Alchemy, we have made a couple of investments which have been strategic and align these themes in what I would call a natural product set and sales pipeline, or enabling co-adjacent businesses, with disruptive business models to take down a bank! ...

Then came Clearmatch, a B2B, real time APRA approved lending engine, which powers the B2C consumer lending business Society One. The recent "spin out" and investment into Clearmatch, means that Clearmatch is now focused on building a range of product sets in the financial services sector, which can then be fractionalised. Today these range from in part powering products like Society One, Insurance Premiunm Financing, Rental Bonds and in the future things like construction development finance and residential mortgages. Capital asset financing is another product to consider.

What is unique about this model from a traditional bank or any of the "new banks", is that the P2P and fractionalisation provides opportunities for High Networth Investors to "Be the Bank". A lot of these investors are offshore and they build and develop property onshore in Australia. As the banks start to reign back their CDF and residential investment lending, this creates additional opportunity for platforms like Clearmatch and these investors to fund their own projects, but to also diversify and spread the risk through the use of the fractionalised lending engine.

  ...

Now bundle in the property element and Property Connect's LiveOffer auction engine. Investors have the ability to attend an auction and obtain a real-time APRA approved lending decision as the auction is conducted. This is a truly unique proposition, not only for the property market, but also for the disruption of a traditional bank and lender."

On page 17 of the April 2018 Investor Presentation "Clearmatch" is listed under "Partner with to extend LiveOffer Platform".

BLOCKCHAIN

9. There may be an update about leveraging blockchain technology in the platforms.  From the Appendix 4C dated 31 January 2018:

"... the company will explore solutions for the use of Blockchain technologies in the property market and electronic settlement and conveyancing, for both off the plan and existing property developments."

The investor presentations have outlined how blockchain technology may be integrated.  

In my opinion, Darren and Property Connect have done a great job over the past year and I am looking forward to what updates and news the future brings.