Debts represented on average 18.5% of the net assets of SCPIs (real estate investment companies) at the end of 2022, according to the French Association of Real Estate Investment Companies (Aspim), compared to 16.7% at the end of 2021.
Should we be worried, in an environment where loan interest rates have tripled in eighteen months? “The debt of SCPIs must always constitute a point of vigilance for investors, both on the current level and on forecasts over two or three years”notes Thierry Sevoumians, advisor to the general management of Crystal, a group of wealth management advisors.
Investors had put aside this rule a little in recent years, because credit was cheap. “They will rediscover that the return of an SCPI is directly linked to the risk taken, that is to say to the type of assets selected and the use of credit leverage”specifies Christophe Descohand, general manager of Moniwan, a platform specializing in real estate savings.
In practice, the use of credit varies considerably from one SCPI to another. “We implement very prudent management, with very limited use of debt”, declares Antoine Barbier, director of AEW Patrimoine. Two of its SCPIs (Health Heritage and Diversification Germany) are not indebted at all, while the others have a debt rate of between 2.2% (Fructipierre) and 12% (Laffitte Pierre).
Disaster scenario
Conversely, certain products on the market display debt exceeding 30%, such as Elialys (31.7%), Eurovalys (33.6%) and Novaxia Neo (38%), according to a study on SCPI debt at the end of 2022 carried out by MeilleureSCPI. com. “We are targeting a distribution rate of 6% per year, while the market averages 4.5%. The use of debt has been an integral part of this strategy since the launch of Novaxia Neo in 2019, but this debt is secure since it is at a fixed rate for 83%., specifies Laurent Boissin, chairman of the management board of Novaxia Investissement. This means that the fund is only affected by the sharp rise in mortgage rates on 17% of its debt. »
The worst-case scenario for highly indebted SCPIs would be to have significant loan maturities in the short term: they would either have to be refinanced at a much higher rate, or repaid by collecting or selling assets. “It’s all a question of balance: a high collection makes it possible to repay its debt if necessary, but, in this case, the SCPI is no longer in a position to buy buildings, which is essential to ensure its future return”, explains Thierry Sevoumians.
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