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5 criteria to look for to identify an efficient SCPI

You wish to invest in an SCPI (Sociétés Civiles de Placement Immobilier). But how do you choose among the 206 existing SCPIs? You will find a lot of information on the documents issued by the SCPI: the newsletters and the annual report. Here are, according to us, the 5 criteria to determine the performance of an SCPI.

5 critères à regarder pour identifier une SCPI performante
 

 

 

 

1. The distribution rate on market value (TDVM - taux de distribution sur Valeur de marché in french ) of the SCPI

The TDVM corresponds to the gross dividend (before withholding tax) paid in a given year divided by the average share price in that same year.

The level of remuneration and its regularity are of primary importance. Indeed, investors in SCPI are, in general, looking for additional income (to improve their retirement pension, for example). It is also important to look at the IRR to know the performance of the fund over time (5 years, 10 years...)

2. The size of the SCPI

In addition to the overall value, it is important to look at the number of buildings and the number of tenants in the SCPI. The greater the number of tenants, the greater the risk pooling.

3. The SCPI's assets

The durability of an SCPI depends largely on the quality of its real estate. The buildings must be in line with the needs of the tenants (location, services, environmental quality, etc.) in order to secure the maximum rental income for the SCPI.

Please note: The properties held are listed in the SCPI's annual report.

4. The Financial Occupancy Rate (TOF) of the SCPI

The TOF corresponds to the ratio between the amount of rents, the occupancy indemnities invoiced, the indemnities compensating for rents and the total rents that would be invoiced if all the SCPI's assets were rented. This ratio illustrates to some extent the financial vacancy rate of the real estate portfolio managed by the SCPI. It is measured on the last business day of the past calendar quarter, and is valid for the three months making up that quarter.

5. The reputation of the management company (in charge of the SCPI)

The 206 SCPIs are managed by 38 management companies. To recognize a good management company, one must look at the quality of the management teams, its ability to source and manage quality assets and also to meet its commitments by offering an interesting risk/return ratio to its clients.

For more information on SCPI, contact us!

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