The shares market of corporate real estate SCPI and OPCI retail on 31/12/2017
The provisional statistical data of 79 SCPI from a total of 84 corporate real estate SCPI representing more than 99% of the net inflow of capital in 2016, and of “consumer” OPCI for the year 2017, collected and processed by the IEIF, once again show the success of real estate investment funds for private individuals.
Net inflow
- Corporate real estate SCPI
With a total above 6 billion euros, that is an increase of 15.2% compared to the previous fiscal year, the global net inflow of corporate real estate SCPI reached a new annual record since the creation of this investment fund more than 40 years ago. The second semester (2.313 billion euros) has however been less favourable than the first six months of the year (3.734 billion euros).
- OPCI retail
In 2017, the “consumer” OPCI essentially distributed by means of life insurance contracts raised a total of 4.21 billion euros (that is an increase of 5.5% compared to the previous fiscal year). In this case as well, the second semester (1.515 billion euros) shows a net downturn compared to the first semester (2.704 billion euros)
Total asset
- Corporate real estate SCPI
On 31 December 2017, the corporate real estate SCPI capital reached a total of 46.02 billion euros, that is an increase of 18.1% compared to end of 2016.
- OPCI retail
Over the previous fiscal year, the combined net asset of OPCI increased from 8.719 to 12.989 billion euros, that is an increase of nearly 50%. Five years ago, at the end of 2012, the net asset had not reached one billion euros yet.
Secondary market
With 840 million euros worth of traded shares, the secondary market of corporate real estate SCPI shares has experienced a significant increase (+21.4% compared to previous fiscal year) in relation to the capital expansion: in 2017, once again, the annual exchange rate of SCPI shares did not exceed 2% of the capital. Above all the secondary market of SCPI has not experienced liquidity pressures; the combined shares pending transfer and uncompensated retirement is limited at 0.22% of the overall capital (0.24 % in 2016).
Performance
- Corporate real estate SCPI
In 2017, corporate real estate SCPI saw their distribution rates reaching 4.43% (compared to 4.64% in 2016). This development is due to a weighted average price increase of SCPI shares (+1.79%) combined with a measured distribution policy by managers (-3.28%). Above all the level of income distributed by SCPI allows them to make a risk premium which remains comfortable (+3.78% compared to 10-year State bonds).
- OPCI retail
In 2017, the overall performance of OPCI reached 3.98% compared to 3.23% in 2016. It’s the increased property value (+2.4% compared to +0.8% the previous year) which led to this performance rather than the current return (1.6% compared to 2.4%), its entirety with a reduced volatility of only 0.6%. Over the period of June 2008 to December 2017, the overall annualised performance of OPCI amounts to 5.3%.
Once more, the year 2017 demonstrated the strength of real estate investment funds aimed at private individuals, the SCPI and OPCI and how highly attractive they are to investors. The inflow of these two vehicle types posts a new all-time record and brings their overall assets at levels never reached before. A downturn of the inflow during the second semester should however be noted.
According to Arnaud Dewachter, ASPIM Executive Officer, “this slowing down of the dynamics must be equally explained by the willingness of management companies to remain in control of the speed of raising capitals compared to that of building acquisitions as by the announcement made by the government in summer on the upcoming Finance Law. The property-based wealth tax (Impôt sur la Fortune Immobilière - IFI) may have raised questions on the fiscal treatment of real estate investment funds and generated a wait-and-see behaviour from investors. The debate on the successor of ISF has furthermore compromised the fair perception of SCPI and OPCI as contributors to the needs of the French economy and society, which ASPIM still regrets”.