2023-09-19 16:28:50
The figures for the first half of 2023 attest to a slight increase in income and the distribution rate of SCPIs. But, already, the “capital” component of their performances was in decline…
On September 7, ASPIM and IEIF published the performances of general public real estate funds for the 2nd quarter and 1st half of 2023. Including, therefore, those of SCPIs. Data, as of June 30, which obviously does not include the downward revisions in the price of shares of certain SCPIs, initiated during the summer. And which have accelerated in recent days.
15 SCPIs have announced a drop in the price of their shares
On September 14, after the announcement of La Française REM, 9 SCPIs had lowered their subscription prices since the start of 2023. A number that has increased to 15 since then[1], with press releases from Perial AM then Primonial REIM. The first announced the decline in the share prices of its four main SCPIs. That of its emblematic PFO2 shows the biggest drop: -16.33%. Followed by its vehicle dedicated to Ile-de-France offices, PF Grand Paris: -15.81%. The historic PFO – one of the oldest SCPIs on the market – fell by -8.90%. The most recent, PF Hospitalité Europe, by -9.50%. At Primonial REIM, only two SCPIs are affected by the negative revision of share prices. Most exposed to the office and retail markets. Primopierre (offices) lowers its price by -13.5%. Patrimmo Commerces, by -10.7%.
The capital component of their performance already “down slightly” in the 1st half
Without taking into account the reductions announced after June 30, the ASPIM-IEIF figures already show a slight decline in the weighted average share price. Over the first half, it stood at -0.04%. And results from the accumulation of reductions practiced by 7% of SCPIs on the market -in number-. But also increases carried out by 10% of SCPIs over this period. The ASPIM is obviously well aware that this relative “ stability » of the weighted average price is “ not reflect current corrections to the value of underlying real estate assets”. She recalls that a “ mid-year review of appraisal values » is at work. And that she will be attentive to the conclusions that will be drawn from it by its members “. In other words, real estate asset management companies.
SCPI: rental income maintained, distribution rates increasing
While waiting for this operation to be completed “ truth about prices » for SCPIs, the ASPIM-IEIF figures already provide information on the other component of the performance of these real estate vehicles: rental income. The latter, note the two associations, “ are maintained, with a distribution rate in line with expectations “. The half-yearly installments distributed by SCPIs are in fact increasing. By +2.56%, on a weighted average, compared to the 1st half of 2022. A rate higher than that of the 1st quarter of 2023. Advance payments from income then only increased by +0.25% compared to 1Q 2022. The The 1H 2023 figure therefore attests to a significant increase in the level of distributions. The average distribution rate – level of distributions compared to the share price on January 1, 2023 – thus stands at 2.20% over the first half.
Current yield: +2.15%
This is better, again, than in the first half of 2022. Where this average distribution rate stood at 2.15%. The performance ” global » of SCPIs is however, taking into account the value effect, significantly lower than last year at the same period. As of June 30, 2022, the half-yearly performance stood at 2.8%, according to the EDHEC IEIF Immobilier France index. Including 2.1% for the income component. And +0.7% for the capital appreciation component. As of June 30, 2023, this half-year performance was reduced to +1.92%. Including +2.15% current yield. And, therefore, -0.23% share variation. Given the devaluations already announced, the decline in this capital component should be even more significant in the second half of 2023…
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About the ASPIM(i)
The French Association of Real Estate Investment Companies (ASPIM) represents and defends the interests of its members, the managers of alternative investment funds (AIFs) in real estate (SCPI, OPCI and other “by purpose” AIFs). Created in 1975, ASPIM is a non-profit association which brings together all those involved in the management of unlisted real estate funds. In France, as of December 31, 2021, real estate AIFs represented a total capitalization of €280.5 billion.
About the IEIF(i)
Created in 1986, theIEIF is an independent study, research and foresight center specializing in real estate. Its objective is to support real estate and investment players in their activity and strategic thinking, by offering them studies, analysis notes, summaries and discussion clubs. The IEIF approach integrates real estate into both the economy and asset allocation. It is transversal, the IEIF following both the markets (business real estate, housing), real estate funds (listed: SIIC, REIT; unlisted: SCPI, OPCI, FIA) and financing.
(i) Information taken from an official company document.
[1] Data as of September 15, 2023
1695177746
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