Real estate investment at the heart of economic and social transformations: Second ASPIM / EY study
On 20 October, the French Association for Real Estate Investment Companies (ASPIM) presented its second socio-economic impact study on unlisted real estate investment funds (SCPIs OPCIs, OPPCIs and unit-linked SCIs), commissioned by EY. This study objectively assesses the sector's contribution to the country's economy, at a time when the health crisis has largely confirmed the fundamental role of real estate funds in supporting society's developments and needs.
"Throughout the crisis, our funds have amply demonstrated their resilience, confirming their status as a safe haven for 4 million French people, whether they hold direct investments or unit-linked life insurance policies. More than ever, our funds are keeping pace with changes in the economy and society, to better meet the needs of tenants and savers alike, particularly in terms of social and environmental issues,” says Jean-Marc Coly, Chairman of ASPIM.
Companies at the heart of many societal and environmental challenges
This study illustrates how the funds’ assets have evolved to meet the major societal challenges of recent years. While offices remain the main asset class held by real estate funds, there was a 69% increase in the portfolio dedicated to health (clinics, nursing homes, managed residences) between 2018 and 2021. In 2021, SCPIs invested €1 billion in health real estate, compared with €300 million invested in 2020 before the health crisis.
Similarly, the health crisis has accelerated the return of real estate funds to the residential market, with the housing surface area held increasing by 54% between 2018 and 2021. Against a backdrop of housing crisis, the sector says it is ready to provide solutions, particularly in pressure areas where there is a clear shortage of affordable rental supply. In particular, ASPIM is behind a proposal for a "Housing Fund" that would enable the sector to develop affordable and high-quality rental supply through dedicated funds. The Housing Fund, primarily intended for individuals preparing for retirement, would represent a form of “institutionalisation” of household savings aimed at rental housing.
At a time when our fellow citizens are concerned about financing their retirement, real estate funds offer trusted savings solutions that are able to provide, in a government-regulated environment, income that is less volatile than other savings products while providing a higher return.
The funds also confirm their commitment to socially responsible investment. Almost two years after its launch, 72 funds, representing 29% of the French market, have already obtained the SRI label. This demonstrates the growing adoption of environmental, social and good governance issues by management companies.
The non-financial performance of assets improved significantly between 2019 and 2021, as evidenced by the fact that almost 90% of management companies have introduced monitoring indicators for energy consumption (compared with nearly 50% previously).
Unlisted real estate investment funds contribute to employment and regional development
The sector continues to demonstrate its economic impact on employment and regional development. It currently supports more than 1.8 million employees who work and innovate in buildings owned by real estate investment funds in France.
In 2021, the sector invested more than €850 million in property maintenance and complete asset restructuring. The sector thus contributes to the dynamism of the real estate and urban sector, and has helped to create and maintain the equivalent of 47,000 jobs in France.
The sector is a sustainable partner in regional economic development. Currently, 54% of the real estate portfolio owned by unlisted funds is located in the regions. €2 billion in tax contributions were paid in France in 2021, and nearly 60% of this amount corresponds to regular contributions.
French unlisted real estate investment funds among Europe's leaders
Lastly, this study confirms the position of French funds in the European market. France remained Europe's second-largest market for unlisted funds in 2021, behind Germany with €220 billion in net assets under management. French funds are also among the fastest-growing in Europe, with +79% growth in net assets between 2016 and 2021.
The funds' managers aim to continue the Europeanisation of their investments over the coming years. In 2021, 34% of SCPI's investments were made in Europe, compared with 31% in 2018 and just 15% in 2015.