Still more questions regarding the future of civil real estate investment companies (SCPI)! These unlisted real estate funds invest in offices, shops, and warehouses, etc., and pay unitholders their portion of the rents. This effortless real estate investment is attracting more and more savers, collecting a record sum of more than 10 billion euros last year.
However, for the past few months, clouds have been gathering in the skies of SCPIs. Indeed, the sudden rise in interest rates in 2022 creates tensions on the real estate market. As investors no longer have access to credit as cheap as in the past, their purchasing power is reduced and prices tend to fall.
A trend confirmed by the publication of the Inrev index for the fourth quarter of 2022. This European index lists the performance of 284 products.
“Unlisted European real estate posted a total return of −6.19% in the fourth quarter, indicates this association of investors. The correction was brutal and synchronized between the markets, although the levels of decline varied from one geographical area to another. » In the third quarter, a decline of 1.60% had already been observed.
Inflation problem
Should SCPI holders be alarmed? Each year, management companies have the property assets of their vehicles valued. These appraisal values are not yet known for the most part, but the first echoes point to a stability or a very contained decline at the end of 2022.
“We have recorded a slight drop in our SCPI invested in Germany, of the order of 3.5% to 4%, and our product invested in Spain is stable with a decline in the appraisal value of 0.19%”communicates Jean-François Chaury, Managing Director of Advenis REIM.
However, the decline is certainly not yet fully integrated into these figures. “We note that it generally takes eighteen months for the appraisal values to take into account the evolution of market values, this is what we observed during the financial crisis of 2008”, notes Amaury Demarta, CEO of Millenium Gestion Privée. The values at the end of 2023 may be less favorable for certain products.
Especially since SCPIs will have to deal with the problem of inflation. In theory the rents are indexed. But, in practice, it is another matter. “The managers do not want a rental vacancy and the tenants negotiate, so the theoretical increase in rents is not passed on 100%”souligne Amaury Demarta.
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