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Property developer Ingenia Communities Group (ASX: INA) is going high-tech with its "modest" investment to acquire a minority stake in fintech Land Lease Home Loans, giving prospective residents access to a new funding solution.
Founded in January this year by former ANZ Health director Andrew Ralph, Land Lease Home Loans focusses on providing residents of land lease communities similar financing opportunities to those available to traditional house-and-land homeowners.
Ingenia CEO Simon Owen says the investment in the startup is a game changer for residents of land lease communities - one of the sectors the company specialises in.
"After many years of effort, undertaking meetings with literally scores of financiers who may have seen the opportunity but were not prepared to commit to offering a realistic solution, this is a great outcome," says Owen.
"We have seen the tremendous success of this market in the US where the provision of funding is commonplace and have been very keen to support the inclusion of a well thought out and well executed finance solution for prospective residents who may require a modest loan to facilitate their move to a community.
"The funding solution is a natural next step in the growth and maturity of the land lease sector in Australia. We have been working with Andrew Ralph, the founder of Land Lease Home Loans, who share our vision, to bring this opportunity to market."
Land Lease Home Loans founder and managing director Andrew Ralph said he was excited about the opportunity to work with Ingenia.
"This is an untapped area of housing finance demand and we believe the potential market is significant," Ralph said.
"There is already a strong pipeline of inquiries ahead of the official market launch."
As part of the "modest" seed capital investment Ingenia will hold a minority stake in Lend Lease Home Loans, allowing the listed property developer to participate in the oversight of governance, credit policies and lending framework as the Sydney-based startup finds its feet.
In addition, INA will provide $3 million to fund a loan book to be used to exclusively offer amortising loans to customers purchasing a new home in an Ingenia Lifestyle community.
"We see an opportunity to broaden our customer base to those who may be attracted to the connected and supportive lifestyle our communities offer but may be delaying their decision for financial reasons," says Ingenia Lifestyle general manager project sales Kate Melrose.
"We are increasingly seeing interest from both younger buyers and single people, who are still working and would like to make a move to our communities.
"This product will open that opportunity for younger, aspirational buyers."
Shares in INA are up 0.54 per cent to $5.55 per share at 11.20am AEST.
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