Real estate savings: SCPIs stay the course in 2020

In 2020, SCPIs (Sociétés Civiles de Placement Immobilier) delivered an average performance of 4.18%.

This result is slightly lower than in 2019 (4.40%), but very respectable given the unprecedented health context and its economic impact. With an average performance of 4.60% in 2020, Primonial REIM's SCPIs have outperformed the market and have a positive balance sheet and good prospects for 2021.

SCPI: good results on average

A popular investment for the French for the past decade, SCPIs have demonstrated their ability to deliver a return over time. Faced since March 2020 with a slowing economy, the widespread use of telecommuting, the specter of recession and the resurgence of precautionary savings, SCPIs have nevertheless held up well. Despite a downward trend, albeit not as strong as expected, performance remains attractive on average* compared to other non-guaranteed capital savings products and stock market investments, which are more volatile and affected by market fluctuations. With the performances recorded for its SCPIs, Primonial REIM demonstrated in 2020 the relevance of its allocation choices in an environment where agility, adaptability and proactivity are more than ever differentiating assets.

Primonial REIM SCPIs, a proven resilience

Out of 26.8 billion assets under management, 90% of the portfolio held by Primonial REIM is made up of office assets (located in Paris and the inner suburbs and occupied by large companies), healthcare/education assets in Europe, and residential properties (located in cities where rental demand is strong). Real estate sectors that have weathered the crisis well. While telecommuting has accelerated the transformation of companies, its impact on the office sector remains to be put into perspective. Primonial REIM remains convinced that well-located "headquarters" type buildings, integrating new sanitary standards and new uses (air quality, flexibility of spaces, integration of services for employees, etc.) will remain popular with both tenants and investors.
With more than 70 assets and nearly 450 leases in place, Primonial REIM's SRI-labeled SCPI Primopierre, which invests primarily in office properties in the Paris region and benefits from a high degree of centrality and quality tenants, has demonstrated its robustness and resilience throughout fiscal year 2020, with a rental collection rate close to 100% and an overall performance of more than 5% for the year 2020.

To be noted , the SCPI PrimoFamily, invested mainly in housing, delivered an overall performance of 5.05% in 2020. During this crisis, residential real estate has played its role as a safe haven.

Primonial REIM's 2021 outlook

In 2021, Primonial REIM will strengthen its presence in three particularly resilient sectors: core office real estate (prime locations), European health and education real estate and residential real estate in European cities where rental demand exceeds supply. In addition, Primonial REIM will continue its SRI (Socially Responsible Investment) commitment. Its SCPI Primopierre was one of the first real estate funds in the market to receive the 2020 label.

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. And as with any investment, past performance is no guarantee of future performance.

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