Today, the market for SCPI it is no longer one, but protean. There are young opportunistic SCPIs who manage to achieve good performances (with a distribution rate above 6%); there are diversified SCPIs that ride the current wave year after year and deliver between 4.5 and 5.5%; and those who are bearing the brunt of the devaluation of their assets, who are strangled by large ransom demands, and who are withdrawing funds. So much so that, according to statistics from the French Association of Real Estate Investment Companies, only about ten management companies concentrate 80% of their collections on these investment vehicles.
Above all, yesterday’s stars are no longer today’s. SCPI specialized in offices no longer attract. Instead, it is those specializing in logistics, commerce or healthcare that concentrate the interest. One fact says it all: office SCPIs which represented 37% and 25% of collections respectively in 2022 and 2023 represented only 7% of collections in the first quarter of 2024!
Shorter investments
A paradigm shift destined to last given the policies of large French companies, forced to review their needs for square meters of offices due to growth teletravail. A major thorn in the side of SCPIs in charge of large portfolios of tertiary assets that are not necessarily well positioned and poorly filled. “From now on – Winners take all!” –, the leaders are conquering the market, leaving less and less space for others”assures Paul Bourdois, president of France SCPI, who is also concerned by this phenomenon since the vehicles that collect a lot at the moment are above all those that yesterday boasted of having invested little in recent years, which has prevented them from positioning themselves on assets that are not profitable. Given their obligation to quickly invest the funds raised, won’t they in turn be forced to invest under less than optimal conditions?
There is certainly the possibility of leaving the French borders and seeking opportunities elsewhere in Europe. This is what several management companies are already doing which, like Corum, also invest mainly internationally. “We have finally been able to return to the UK thanks to significant price reductions”explains Frédéric Puzin, president of Corum. These professionals are also interested in broader asset families than in the past: data centers, companies, student residences, logistics warehouses, hotels, clinics.
Haro on entrance tickets!
To attract customers and stand out, SCPI they have also chosen not to charge registration fees, traditionally equal to 10% of the amounts paid. These are clearly among the favorite vehicles of late, although, over time, this advantage may fade thanks to higher management fees than those of traditional competitors. However, this exemption is welcomed by savers who wish to invest in real estate, because their investment horizon is no longer as long as that of their elderly. The temptation to regularly switch from one savings product to another to choose more profitable solutions or more suited to your needs is increasingly real. Result: in a relatively short period, the fact of not imposing significant entry fees finds its legitimacy.
Players then bet on the marketing of new vehicles without entry costs. This is the case of Swiss Life AM, the Swiss group that launched SCPI Mistral Sélection on the French market last May, without subscription fees and with the aim of financing the transformation of territories, therefore investing in the region. “This is the opportunity to seize opportunities, such as that of the business park we acquired in Valenciennes with a return of more than 7%,” says Fabrice Lombardo, director of real estate activities at Swiss Life AM France.
In case of early exit before six years, the commissions are equal to 6%, of which 3.6% remains with the fund to guarantee the equality of participants. Another player, Remake, is also riding the wave of zero sign-up fees. “This solution today represents 2% of the total capitalization of SCPIs and 20% of current collections, proof that savers favor it” rejoices Nicolas Kert, president of Remake, which currently finds entry points in commercial and logistics assets.