The real estate market has undergone major turbulence in recent months. So much so that several SCPIs were forced to lower the price of their shares. Attention is now also turning to ICS.
After the SCPIs, it is the turn of the Socits Civiles Immobilires (SCI) to find themselves in turmoil. The alert was given by the SCI Capimmo of Primonial REIM Francewhich announced, in a letter addressed in August to its 15 insurance partners, that it could no longer provide them with liquidity, beyond a billion euros in withdrawals of their customers.
The ceiling of one billion euros is almost reached since 750 million euros have already been committed, again according to The Agefi. It will then be up to the insurers, to ensure liquidity with their savers. SCI Capimmo had net assets of more than 6 billion at the end of June.
Some SCIs are suffering the full brunt of the backlash from the brutal rate increase
Some SCIs which have collected and invested a lot in recent years are feeling the brunt of the blow from the brutal rise in rates. They have been able to invest massively in SCPIs or assets whose values are suffering today, which is causing a drop in their net asset value, analyzes Gautier Delabrousse-Mayoux, president and co-founder of the Iroko distribution platform, interviewed by The echoes. These SCIs also face a demand for withdrawals from institutional investors who hold large positions. This undermines their natural liquidity. This is only the beginning of this asset reallocation movement.
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Negative performance in the first half
Within life insurance contracts, SCIs, which are more diversified than SCPIs (real estate investment companies), make it possible to invest in real estate. According to the ASPIM (French association of real estate investment companies), SCIs offered a negative return of -1.07% in the first half of 2023.
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This negative performance reflects the taking into account in the net asset values of drops in the valuation of real estate assets held directly or via participations in other unlisted funds, indicated the ASPIM. In 2022, SCIs offered an average return of 3.7%, compared to 3.8% the previous year.
Life insurance: SCPI, SCI… Still a good time to include real estate in your contract?