Inflation, downward valuations for many real estate assets, contraction of transactions, geopolitical and economic tensions… Real Estate Investment Companies (SCPI) – like almost all investment products – are suffering the repercussions of numerous turbulences . Many SCPIs have thus recorded drops in the value of their assets, which they pass on to the price of their shares. What exactly does the volume of declines represent? What will be its impact on this type of investment? State of play and prospects…
SCPI shares saw their price fall-iStock-Kwanchanok Taen-on.jpg
Declines in SCPI share prices… Where are we?
While between 2018 and 2022, the value of the real estate portfolio of SCPIs experienced an average discount of -2.81%, “paper stone” saw its average return also deteriorate. It stood – according to the French Association of Real Estate Investment Companies (ASPIM) – at 4.53% in 2022, then at 4.52% for 2023. Although slight, this decline combined with economic uncertainties and tensions on the real estate market, have generated a drop in the price of shares of certain SCPIs. Twenty-six of them (including Remake Live, Cœur de Régions and Kyaneos Pierre, to name just a few), have thus lowered their subscription value in 2023, if we include the devaluations of Eurovalys and Novapierre which were recorded on January 1, 2024. The phenomenon then continued, throughout the year, with: Primovie which applied a reduction in the price of its shares by 8.87% on February 13, just like Primopierre which degraded its own by -6.67% on the same date, Accimmo Pierre, with a drop of 1.18% on March 1, Edissimo (-6.37%), Genepierre (-6.70% ) and Rivoli Avenir Patrimoine (-6.72%) followed the movement on March 15, Laffite Pierre (-1.34%), AEW Opportunite Europe (-16.67) and Immo Evolutif (- 6.54%) made their respective decreases on April 3, Atlantique Mur Régions, followed with a decrease of 11.27% on May 2 And finally Elysées Pierre, announced a decrease of 13.95% on August 8. These price revisions are described by specialists as “necessary adjustments to align the values of SCPIs with the realities of the current real estate market”.
What future for SCPIs?
Experts remain optimistic about the future of SCPIs, citing two main reasons… On the one hand the ECB, which, by reducing its main rate to 3.75% last June, initiated a downward trend in interest rates. interest that should benefit investments in SCPI. On the other hand, because the current falls in share prices represent opportunities to buy at relatively low prices… then to realize significant capital gains in the event of future revaluations. In the uncertain context in which we live, specialists advise holders to diversify their SCPI portfolios in order to reduce the risks linked to market fluctuations. Overall, they believe that these products remain solid assets… As long as they are managed with prudence and a long-term vision!
