SCPI: The key role of management companies during the crisis
During the crisis, SCPI (Sociétés Civiles de Placement Immobilier) managers played a key role.
Indeed, from the start of the pandemic, most of them have put in place support measures for their tenants most exposed to the crisis. At the same time, they continued to pursue a policy of acquisitions and arbitration.
Managers accompany their tenants
Most SCPI management companies have, since the beginning of the pandemic, taken support measures for their most affected tenants. The objective was to retain them despite the difficulties and to avoid vacant premises or buildings. Indeed, the latter have a high cost (no rent and impossibility of recovering rental charges). These provisions have mainly taken the form of rent payment facilities (more rarely waivers) and have enabled the managers to recover almost all of the 2020 rent. Thus, Primonial REIM was able to recover 95% of its rent payments in 2020.
A dynamic investment policy
The role of management companies has also been to source the right investments in light of the crisis but also over the long term. The Covid-19 crisis did not prevent them from investing, quite the contrary. They have thus acquired 8.4 billion euros (against 9.2 billion in 2019) of assets, according to Aspim. Some asset types were much less exposed to the crisis than others. For example, residential, healthcare/education and office assets have demonstrated their resilience. Through its savings solutions, Primonial REIM has pursued its real estate strategy in these assets.
The management company Primonial REIM has invested €2.6 billion in 2020
In 2020, Primonial REIM's investment teams completed 41 acquisitions for a total amount of €2.6 billion. Primovie SCPI, which invests primarily in the health/education sector, has been particularly active in expanding its portfolio with assets whose tenants, health operators, have signed long-term leases, thereby generating visibility on the rental situation for years to come for the benefit of SCPI investors.
The volume of acquisitions was also significant for the SRI-labeled SCPI Primopierre, which invests primarily in office property, an asset class that demonstrated its resilience in 2020. It has also acquired the Le Shift building in Issy-les-Moulineaux, via an equity investment finalized in January 2021: this building, the new headquarters of Nestlé, also offers long-term visibility on rents, again to the benefit of investors. Thanks to significant inflows in 2020 (€1.89 billion), Primonial REIM is investing in three particularly resilient asset classes on behalf of its investors: healthcare and education real estate, offices and housing.
TOF definition :
The TOF or Financial Occupancy Rate is the ratio between the amount of rent actually billed and the total rent that would be billed if the SCPI's entire portfolio were rented.
What are the risks?
As with any real estate investment, there is a risk of capital loss due to changes in the real estate market. Income is not guaranteed and may vary up or down depending on the performance of the fund. The SCPI is a long-term investment with a recommended investment horizon of 10 years. Liquidity is limited, the management company does not guarantee the resale of units. Past investments are not a guide to future investments. And as with any investment, past performance is no guarantee of future performance.