For the past five years, real estate investment companies (SCPIs) have won the support of savers. The reasons for this enthusiasm are many. First of all, this investment is simple and easy to understand: an SCPI invests in a tertiary real estate portfolio (offices, commercial premises, warehouses, clinics, etc.), manages it and regularly pays a share of the rents to its unitholders (it notably charges management fees). Then, “it is accessible, since it only takes a few hundred euros to get started”, underlines Nicolas Van den Hende, director of savings at Sofidy. And above all, it is… profitable: last year, SCPIs brought in an average of 4.53% to savers, the best of them posting performances of more than 7%!
The “perfect investment” could be tarnished this year, because the financial and economic situation is no longer the same as at the beginning of 2022. In question? “The sharp and rapid rise in interest rates has contributed to slowing the real estate market,” notes Jean-Marc Coly, president of the French Association of Real Estate Investment Companies. Almost everywhere, in France and in Europe, the price of stone is eroding, which will weigh on the value of the real estate assets of SCPIs, and therefore on the price of their shares.
Beware of energy-intensive buildings
The second factor to take into account is the return of inflation, which exceeds 6% in France at the start of the year. It will have a significant impact on the future results of SCPIs. Normally, rents rise with inflation, but differences will emerge depending on the quality of the housing stock. With less buoyant economic growth, new tenants will be more cautious about rent increases. Especially since at the same time, property charges (heating, local taxes, energy, etc.) have soared. Energy-intensive and ill-suited buildings therefore risk being deserted or re-let after downward rent renegotiations. “Only the most sought-after properties, that is to say the best placed and with low operating costs, will be able to do well,” says Sonia Fendler, president of Altixia Reim.
If you plan to buy SCPI shares this year, be extra careful and do not choose with your eyes closed. First advice: favor those whose quality of management has been proven for many years. Because now that interest rates have risen, some individuals will want to resell part of their SCPI portfolio to turn to more profitable and less taxed financial products. The managers will then receive withdrawal requests from subscribers, a situation that many of them have not experienced for a very long time and which requires experience. Indeed, it is sometimes necessary to carry out arbitrations within the real estate heritage to respond to it.
Then, diversify your investments as much as possible by analyzing the composition of the portfolio of the SCPI you are targeting. Check that it is made up of high-quality assets, in perfect condition and located in the best locations, such as business districts in the city centers of large cities or small shops at the foot of buildings. Also pay attention to the level of indebtedness of the SCPI, because some have borrowed a lot in recent years to build up real estate assets, taking advantage of historically low rates. “Those who have had little recourse to credit have retained greater leeway to go into debt and will therefore be better able to take advantage of the new real estate situation”, confides Pierre Brunet, founder of the firm Alter Invest. All of these criteria will allow you to target the strongest products.