Valuations and Pricing
There are two key BrickX Platform terms that members must understand when considering a BrickX investment.
Brick valuation
Valuation assessments are carried out annually and in many cases more regularly as a means to provide BrickX Platform participants guidance on the underlying real value of their BrickX investments.
Who determines these Brick valuations? Property valuations are carried out by independent third parties.
Brick Price
This is the price at which a BrickX Trust’s brick trades on the BrickX platform secondary market.
Who determines BrickX secondary market Brick prices? These prices are determined by buy and sell activity set by each and every BrickX Platform investing member participating on the BrickX Platform secondary market.
Premiums and Discounts
Bricks can trade at either premiums or discounts to BrickX valuations on the BrickX secondary market.
A Premium occurs when the Brick valuation is lower than the Brick price
- As a buyer this means that you would be paying more than the assessed value of these bricks to gain this exposure.
- As a seller this means that you would be receiving more than the bricks sold assessed value at this price.
A Discount occurs when the Brick valuation is higher than Brick price
- As a buyer this means that you would be paying less than the assessed value of these bricks to gain this exposure.
- As a seller this means that you would be receiving less than the bricks sold assessed value at this price.
The difference between Brick valuation and Brick price can occur due to a number of factors which include:
- Investor demand and available investment capital
- Capital growth expectations
- Yield bias
- Changing risk appetite
- Real estate / economic cycle expectations
- Shifting tolerance towards gearing/leverage
Investor Activity
There are many types of investors that participate on the BrickX Platform. Generally speaking investors fall into one of the following categories:
🟩 1. Buy-and-Hold Long-Term Investors
These investors focus on long-term capital appreciation and income. They prioritize fundamentals and typically avoid frequent trading.
Types:
- Wholesale Investors (Trusts, Superannuation Funds, Charitable Foundations)
- Long time horizons (10+ years), focus on stable, income-generating assets.
- Retail Long-Term Investors
- Individuals saving for a property of their own, retirement or generational wealth.
- Real Estate Investors
- Target high-quality, stable properties with moderate leverage and consistent income.
Key Characteristics:
- Low turnover
- Emphasis on Net Asset Values (Brick valuations) and underlying asset (property) values
- Preference for BrickX Trusts with strong financials and stable distributions
🟨 2. Value Investors
These investors seek undervalued assets and are patient, waiting for the market to recognize mispricing.
Types:
- Contrarian Investors
- Buy Bricks in BrickX Trusts trading at a discount to Brick Valuation.
- Deep Value Investors
- Target undervalued BrickX Trusts with potential for capital appreciation.
Key Characteristics:
- Willing to wait for price appreciation
- May hold medium to long term (2–5 years)
- Focused on market inefficiencies
🟦 3. Opportunistic / Short-Term Investors
These investors aim to capitalise on short-term price movements, news, or market sentiment.
Types:
- Wholesale/Professional Investors
- Short time horizons (daily/weekly), primary focus is on mispricing to identify discounted assets.
- Retail Short-Term Investors
- Individuals seeking to actively manage their investments to expedite growing their investment capital base by compounding returns.
- Real Estate Investors
- Target high-quality, mispriced properties with a buy and flip investment strategy.
Key Characteristics:
- Frequent investment activity turnover
- Less concerned with long-term fundamentals
- Focus on liquidity and pricing discounts.
Trading Opportunity
To summarise, values and pricing of Bricks on the BrickX Platform are subject to change.
Changes are driven by independent valuations, investors and the broader market and economic cycles to which the real estate investment market is exposed.
In an exuberant market investors investors may be able to sell assets (Bricks) at premiums to other investors who are optimistic of their purchased investment values continuing to increase over either the short or longer term depending on their respective investment views.
There are also times in which investors are presented with opportunities to buy assets (Bricks) at discounts due to investor sentiment, investor impatience or general pricing inefficiencies.
For those investors that are time poor or seeking a efficient manner in which to trade the BrickX Platform we encourage those interested to refer to the newly launched BrickX Active Opportunity Fund (BAO01) as a means to investing on the BrickX Platform.
BrickX members are encouraged to either speak with a BrickX representative or their financial adviser should they require further clarity in respects to the BrickX Platform or their own personal investment needs.
Happy Investing!
