User Guide: Why BrickX values transparency

At BrickX, not only are we revolutionising the way in which investors can get exposure to property investments, we also believe we are setting a new benchmark in terms of transparency and information provided to investors. This information doesn’t just relate to individual property investments, but also the way the BrickX Platform and business operates.

BrickX's core values include trust, credibility and transparency. We know that trust and credibility is built over time, and with our continued approach to proactive disclosure, and answering all questions asked by investors, we believe this will set BrickX apart from other investment options.

Our regulated structure segregates assets and gives investors exposure to individual property investments

Working with our lawyers (Gilbert + Tobin) and our Responsible Entity*, BrickX has implemented a structure which has each individual property sitting in a separate trust, held separately from the BrickX business. This approach provides investment protection. Why, you ask? Because the day-to-day activities of one property, or the BrickX business itself, can’t impact another property. In addition, all client funds deposited with us are held in a segregated and separate bank account.

So why is this structure important to investors?

By implementing this structure, BrickX provides the opportunity for investors to gain exposure to individual property investments, without being exposed to the performance of the BrickX business and other properties offered on the Platform in which the Investor does not hold an interest. In building trust and credibility, it is important to us that this investment represents exposure to the benefits and risks of the underlying property investment.

If BrickX doesn’t own or hold an interest in any of the properties, how are the properties funded in the first place, and who owns the Initial Bricks?

It’s true, BrickX does not own or hold an interest in the properties on the Platform. The purpose of the BrickX business is to provide a Platform through which investors can easily and affordably gain access to residential property investments. We believe that by not owning any of the properties, BrickX is better able to act with transparency.

We do not crowdfund the purchase of properties. Rather, BrickX and Theta secure funds to acquire properties before they become available on the Platform. We believe this puts us into a strong negotiating position with property sellers and agents, and also allows us to move quickly on attractive opportunities.

Each property is acquired by a new Trust, with Theta as Trustee. BridgeLane (BrickX's majority shareholder) provides the funds to acquire each property and is the initial owner of the 10,000 Bricks on issue in each Trust. Once a property is acquired, and post-exchange, it will be placed on the Platform in a Pre-Order phase, during which investors are able to reserve Bricks at the Initial Brick Price. The Initial Brick Price is the sum of the Property Purchase Price, Acquisition Costs (stamp duty, buyers agents and legal fees etc) and a Cash Reserve.

Why don’t we hold Bricks and why do we think this is important?

BrickX itself does not hold any Bricks. We believe this is important to providing a trustworthy, credible and transparent environment where investors can gain indirect exposure to property investments. BrickX's focus is on managing the Platform, sourcing new properties for investors, managing these properties and not transacting Bricks.

Buying and selling Bricks on the BrickX Platform

Direct property investment is an illiquid asset class that may not be available to investors. Not only does it take a few months from start to finish to complete a property transaction, there is significant time spent working with agents and lawyers, and also significant costs and fees.

We designed the BrickX Platform to not only provide for easy access and affordability to interests in residential property investments, but also to change the way in which people could sell their investment (of Bricks). BrickX is the first business in Australia to allow investors to buy Bricks when they want, and also put them up for sale when they want through the Platform using the Order Book. This functionality has had a fantastic reception with investors.

However, the ability and speed at which an Investor can sell their Bricks is an important consideration when choosing to invest in the first place, and our investor feedback confirms this. To provide investors with transparency around the movement of Bricks relating to each property, and assist individuals in making decisions, we provide information on the number of Bricks transacted in the last 30 days on each Property Summary page.

Will we always be this transparent?

Comprehensive disclosure about what you are buying helps you to make decisions. We’ll always strive to provide increased information, and respond to all investors questions and feedback.

We’re extremely proud of how we are changing the way in which investors can transact in interests in residential property through the buying and selling of Bricks, and we believe that by being increasingly transparent we can grow the Platform to best serve our investors needs.

If you have any questions relating to this article, please do not hesitate to get in touch with us. For more information on the structure of the scheme, please refer to the PDS.

*Theta is the licensed Responsible Entity for the BRICKX Platform and trustee of each BRICKX Trust. Theta has appointed BRICKX as the Manager of the BRICKX Platform. Each BRICKX Trust has an external Custodian (AET), with BRICKX Trusco appointed as AET’s sub-custodian.

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