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Letter from Stéphanie Lacroix:
SRI at Primonial REIM France

Juin 2022

Stéphanie Lacroix After two years of tension linked to the health crisis, the current context of war in Ukraine and shortage of raw materials has resulted in the end of the era of negative interest rates while the world and the European economy in particular are navigating between inflationary and recessionary risks.

Faced with this situation, what should we do? How can we protect our savings, particularly against inflation?

While equity and bond funds were experiencing significant withdrawals, unlisted real estate was the subject of strong interest: in the first half of 2022, net inflows into the SCPI market reached EUR 5.2 billion1, setting a new record. Real estate is proving its attractiveness, considered a safe haven in an inflationary context. With little correlation to financial market trends, the real estate component of an allocation allows for less volatility: rents can be revised every year on the basis of an IRL (Rent Revision Index), which takes into account the evolution of consumer prices. The interest of indexation is reinforced by the ability of property managers to identify quality assets in advance while ensuring the solvency of tenants2. This also requires the ability to (re)negotiate rent levels and lease terms on a case-by-case basis in order to align interests with fund unit holders.

As you know, the quality of the properties held in the portfolio and of the tenants is an important criterion in the selection of our investments. The quality of our real estate assets3, as evidenced by the environmental certifications awarded to some of our SCPI buildings, is a guarantee of attractiveness and loyalty for tenants.

While the current economic context obviously calls for great caution, we remain confident in the ability of our SCPIs to maintain their commitment to long-term performance. The health crisis has demonstrated the resilience of our property portfolio and validated our strategic choices, based on conviction-based management that favours :

  • thematic SCPIs by property type (offices, healthcare, residential, retail, hotels) offering diversified geographical exposure and a high degree of selectivity in the investments made;
  • systematically taking ESG criteria into account in all our acquisitions;
  • more frequent arbitrages of mature assets;
  • the repositioning of certain real estate assets to align them with the best environmental standards and new uses.

The news from the first half of the year for our SCPIs illustrates these strategic directions and our strong commitment to social and environmental responsibility. For example, the increase in the unit price of the Primofamily SCPI for the fourth consecutive year on 1 July is evidence of the value of its residential assets over time4. The Patrimmo Croissance SCPI, which invests in bare ownership of social and intermediate housing, became the first Impact SCPI on the market in April. It thus completes our range of responsible funds, after the SCPI Primovie obtained the SRI label in 2021 and the SCPI Primopierre in 2020.

Dear partner, you are entrusting us with your savings for the long term, to make them grow and benefit from a regular additional income5.

While purchasing power remains the main concern of the French and the return of inflation only accentuates this reality, real estate remains an attractive real asset and a shield to protect one's assets against inflation.


Stéphanie LACROIX,
Managing Director of Primonial REIM France


1 Source: ASPIM - IEIF, Net inflows of corporate and residential (non-tax) SCPIs.

2 Income is not guaranteed, and the quality of existing tenants is no guarantee of the quality of future tenants. Investing in SCPI units involves risks, including the risk of capital loss. The liquidity of units is not guaranteed.

3 Past investments are not a guide to future investments.

4 Past performance is not a reliable indicator of future performance.

5 Investing in SCPI units involves risks, including the risk of capital loss. Performance and income are not guaranteed.