What are the consequences of the rise in interest rates for SCPIs?, News/Analysis Savings

The Linxea online savings platform has just estimated the average return on SCPIs at 4.70% for 2022 based on a sample of 80 SCPIs. Some rates are still being studied within the management companies, which makes this estimate still provisional. In any case, this confirms another good year for SCPIs with an average increase in yield compared to a 2021 distribution rate of 4.49% (gross of foreign taxation).

Linxea nevertheless recalls that the average distribution rate announced each year by the interprofessional organization of unlisted real estate funds (ASPIM) is a weighted rate according to capitalization, which is not the case of its study. Indeed, SCPIs with the highest yields are often SCPIs with small capitalizations (especially recent SCPIs), and conversely, SCPIs with the lowest distribution rates often have significant capitalizations.

Thirty SCPIs above 5%

In detail, around thirty SCPIs studied by Linxea show a dividend yield of more than 5%. The most efficient, 8 in number, even manage to exceed 6%. These best performances are essentially to be found in the category of diversified SCPIs which shows an average yield of 5.37%.

Questions about the evolution of share prices

Linxea has also identified 25 SCPIs having revalued the price of their shares in 2022, most of which took place during the first half of the year. ” Others preferred, given the international context, to wait for the end-of-year appraisals to record – or not – a revaluation », explains Pierre Garin, Director of Linxea’s real estate division.

Because as the platform reminds us, low interest rates had so far fueled a continuous rise in the price of SCPI shares, resulting in some erosion of yields. With the sudden return of inflation, and the resulting rise in interest rates, the curves will undoubtedly be reversed.

The consequences of rising interest rates

The sharp rise in borrowing rates is in fact leading to the withdrawal of many players who were investing on credit in the tertiary real estate market, resulting in downward pressure on the price of these assets. Linxea therefore considers that there will probably be higher yields in the future but less share price revaluation. Knowing that most SCPIs have reconstitution values ​​higher than their unit prices, which would allow them to absorb a possible fall in appraisal values, Linxea is not really worried about a risk of a general fall in the price. shares.

A slight drop in asset prices due to less competition between buyers is also likely to present an opportunity for SCPIs investing in cash thanks to sustained inflows. ” This is particularly favorable to young SCPIs, who will be able to build up a heritage with a very good entry point », points out Pierre Garin. This is also the case for the very young SCPI without Remake Live entry fee which shows the best return of the year 2022 at 7.64%. The managers of this SCPI launched in early 2022 took advantage of their liquidity provided by strong inflows to position themselves on foreign markets where fewer buyers were present due to the rise in rates which limits their debt capacity.

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