After several years of flat calm, the world of stone and paper is now going through a zone of turbulence. So much so that several SCPIs have revised the price of their shares downward. Latest victim: the management company Primonial.
New alert on SCPIs. On Friday September 15, Primonial, one of the leaders in the stone and paper sector, updated the share prices of two of its most popular real estate investment companies (SCPI).
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15 SCPIs have revised their valuation downward
In detail, the PRIMOPIERRE office SCPI saw the price of its shares fall by 208 180 euros. Either 13.5% decline. The same goes for PATRIMMO COMMERCE, whose price falls by 10.7%passing 197 176 euros.
Primonial’s price drops are not an isolated case. Since the beginning of summer, no less than 15 SCPI announced falling valuations. Among the latter, we can notably cite Accimo Pierre of BNP Paribas REIM (-17%).
But also other SCPIs, like PFO2 (-16.3%) and PF Hospitalit Europe (-9.5%) of PERIAL Asset Management, or even Elyses Pierre of HSBC (-7%) as well as Gnpierre (-17%) and Edissimo (-13.9%) of Amundi. And others could follow.
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Real estate under pressure
Why such a situation? To curb inflation, the European Central Bank (ECB) carried out the fastest rate increase in its history. Since July 2022, the institution raised its rates 10 times. An absolute record.
As a result, the average rate of a 20-year loan has almost quadrupled in 18 months to reach 4.05% Today. So much so that a couple who could borrow 400,000 euros over 25 years at the start of 2022 can now only obtain 320,000 euros.
As a result, the entire real estate market is slowing down. Over one year, prices fall by, for example, -4.5% Paris. While the cities of Bordeaux and Lyon recorded a decline of -8% over the same period, according to MeilleursAgents estimates.
However, the price of SCPI shares must correspond more or less 10% of the reconstitution value of the portfolio if all the assets were sold, explains Jean-Marc Chevassus, head of the Master 2 in wealth management at IAE Lyon.
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Hidden opportunity?
Beyond the upheavals in real estate, several factors can explain the difficulties of SCPIs, such as the tightening of regulations on energy performance, which forces certain funds to carry out work on their aging real estate stock.
Another downward factor to keep in mind: the explosion of teleworking following the Covid crisis, which has changed the working habits of employees and has strongly impacted the demand for offices in certain geographic areas.
Although they are bad news for savers, these declines must nevertheless be put into perspective, to the extent that investment in SCPI is a long-term investment. Especially since the rents continue to be paid regularly.
For the more daring or those who wish to invest for the very long term, current devaluations can even, in certain cases, constitute an interesting entry point if you anticipate a rise in property prices in the future.
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