Real estate investment companies (SCPI) are buying more and more buildings in Europe. The French know that European real estate is totally compatible with their desire to increase their wealth and their purchasing power. One of the best ways to invest your money in mutualized real estate in Europe is to invest in European SCPIs. However, why choose to buy European SCPIs to invest your money? This is what will be presented to you.
Why is it interesting to invest in real estate in Europe?
For many years, people were limited to the national territory to invest in real estate. Investors thus turned almost systematically to the purchase of a rental apartment in France or to SCPIs specializing in France.
With the evolution of regulations and technological means, it has become possible to invest more easily outside France, particularly in European countries.
Investing in Europe thus makes it possible to seek unique return opportunities by benefiting from the specific features of each country. It is now possible to bet on the dynamism of the German economy or even find potential capital gains in countries with a discounted real estate market.
By leaving France alone, the investor will thus have access to greatly increased diversification. Of course, it is in practice very complicated to buy directly abroad as the procedures can be tedious between language barrier, remote management or even different regulations.
This is why many investors have chosen to invest abroad thanks to European SCPIs.
As reminded Lionel Benhamouone of the founding partners of The Central SCPI (www.centraledesscpi.com), the first French digital savings network: “One of the first European SCPIs is the SCPI Corum Origin, created by Corum Asset Management in 2012. This performance SCPI paved the way for the democratization of real estate investment in Europe. Aware of the prospects for European real estate, clients who contact us at 01.44.56.00.23 increasingly want to put European SCPIs in their portfolios. »
What are the main characteristics of European SCPIs?
European SCPIs make it possible to invest without management in return for fees and in a pooled way in real estate. Capital and income are not guaranteed in SCPI.
Investing your money in European SCPIs allows you to take advantage of unique opportunities, specific to different countries. Opportunities that we would not have had by being confined to French territory alone. This is partly what allows some of the European SCPIs to post yields of up to 6% today. A return of course not guaranteed.
In addition, investing in European SCPIs leads to further pooling of one’s real estate assets since their assets will be able to be spread over several countries at the same time and over dozens of buildings. A diversification that allows better risk management compared to a purchase of a single rental property directly.
Finally, one of the advantages of European SCPIs is their taxation. Dividends paid by European SCPIs are not subject to social security contributions at the rate of 17.2% for rents collected outside France.
In which European SCPIs is it wise to invest according to your profile?
The choice of European SCPIs being more and more extensive, investing well in European SCPIs is not easy. This is why there are platforms specializing in SCPIs to support savers. Thus on the site of the market leader platform, The Central SCPI (www.centraledesscpi.com), savers have access to SCPI sheets and SCPI simulations.
The consultants of The Central SCPI deliver free and personalized advice on 01.44.56.00.23 to provide educational support to potential investors in their first steps into the world of SCPIs.
We have therefore decided to discuss four European SCPIs on the advice of Laurent Fagesmanager within The Central SCPI :
” These four SCPIs can form the backbone of a well-diversified SCPI portfolio. This is the SCPI Corum Originof the SCPI Corum XLof the SCPI Corum Euroion and some SCPI Novapierre Germany 2. »
The Board of La Centrale des SCPI (www.centraledesscpi.com): Income from SCPIs is not guaranteed and is likely to fluctuate upwards or downwards, so it is important to build up good diversification when investing.
The first SCPI is the SCPI Corum Origin. Managed by Corum Asset Management, Corum Origin is a geographically well-diversified SCPI since it has assets in 13 countries of the euro zone. Corum Origin is also a highly diversified return SCPI by type of asset since it has purchased offices, retail premises, hotel premises, business premises, logistics real estate and real estate related to health.
Corum Origin reported a payout ratio* of 7.03% last year and its ten-year internal rate of return** (IRR) was 6.60% as of December 31, 2021. The capitalization of the SCPI Corum Origin exceeds 2.2 billion euros. It has a non-guaranteed target of 6% return. Its share price revalued to 1er April by 4.1% due to the increase in the value of its assets.
The SCPI Corum XLalso managed by Corum Asset Management, was the first SCPI to acquire buildings outside the euro zone. Corum XL is currently invested in twelve countries. It is also diversified by sector and its capitalization exceeds 1.2 billion euros.
On the performance side, Corum XL has offered a payout ratio* of 5.84% in 2021. Its non-guaranteed return target is 5% and it has a non-guaranteed internal return target** (IRR) of 10% over 10 years.
Corum Asset Management has finally created the SCPI Corum Euroiona euro zone SCPI. Corum Euroion is an SCPI holding the SRI label (Socially Responsible Investment). The SCPI Corum Euroion acquired buildings in seven euro zone countries, mainly in Ireland and Finland. With assets in three types (offices, retail and logistics), Corum Euroion is also a diversified SCPI.
The SCPI Corum Euroion had a payout ratio* of 6.12% in 2021. Its non-guaranteed target internal rate of return** (IRR) is 4.50% over 10 years.
Finally, let’s talk about the SCPI Novapierre Germany 2, managed by Paref Gestion. The SCPI Novapierre Germany 2 is a pure-player SCPI invested in business walls. Novapierre Germany 2 capitalizes nearly 200 million euros.
It had a distribution rate* of 3.39% last year and is aiming for a return of more than 4% in 2022. Note that its share price was revalued in April 2022 by 4%, driven by the increase real estate prices in Germany.
Investing your money in European SCPIs is an excellent way to geographically diversify your assets without management constraints in return for management fees.
Lionel Benhamou, founder of The Central SCPI (www.centraledesscpi.com)concludes as follows:
“Inflation raises fears for the purchasing power of one’s money. It is therefore necessary to rethink your savings intelligently to find solutions that bring returns. European SCPIs are clearly one of the best ways to invest your money today with very attractive returns! “.
Warning
Investment in an SCPI is not guaranteed, both from the point of view of the dividends received and that of the preservation of capital. SCPIs depend on fluctuations in the real estate markets.
Before any decision to purchase SCPI shares, get advice from a professional to be certain that this investment corresponds to your asset profile.
Finally, like any real estate investment, take into account the fact that SCPIs are long-term investments whose recommended holding period is 10 years.
Before any investment, check that it is suited to the investor’s financial situation and their investment objectives.
Past performance does not guarantee future performance.
Warning concerning Corum Origin, Corum XL and Corum Eurion SCPIs
Like any real estate investment, the liquidity of SCPI CORUM ORIGIN, SCPI CORUM XL and SCPI CORUM EURION is limited. There is a risk of capital loss and income is not guaranteed.
Currency risk increases income and capital risk.
Before any investment, check that it is suited to the investor’s financial situation and their investment objectives.
Definitions
*Payout rate: corresponds to the ratio between the gross distribution before final deduction and other taxation paid by the SCPI on behalf of the partner for year N, by the subscription price on January 1 of year N for SCPIs with capital variable.
**Internal rate of return (IRR) : measures the profitability of the investment over a given period. It takes into account the change in the value of the share, the dividends distributed over the period, as well as the subscription and management fees borne by the investor. When an SCPI communicates on an objective of internal rate of return, it is a communication and not a commitment on the achievement of this objective which remains unguaranteed.
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