Barely have the 2023 results been completed when analysts are projecting the forecasts of real estate investment companies for 2024. According to statistics revealed last week by the specialized firm Rock-N-Data, the forecast distribution rate anticipated for 2024 stands at 4.81%, compared to 4.50% last year.
“Of course, this figure should be taken with a pinch of salt
,” says Pierre Brandouy, financial analyst for Rock-N-Data.
“We obtain it by dividing the distributions for the year 2023 - assuming that they should not vary much - by the new share prices, taking into account the reductions announced by the managers.
But we only give it as an indication
,” he adds.
Very promising deal flows
To achieve nearly 5% net return for the saver, management companies are chasing the signing of very profitable leases and do not hesitate to highlight their latest acquisitions.
On February 13, Axipit announced the acquisition of commercial premises in Essonne with a generated yield estimated at 7.2% for its SCPI Upeka.
As for Sofidy, on March 11 he signed the purchase of commercial buildings on the Place du Capitole in Toulouse, with an immediate rate of return of 6.6%.
“We are still taking advantage of sellers in a hurry to sell their assets to obtain good returns
,” explains Nicolas Kert, president of Remake Asset Management, which manages the SCPI Remake Live.
“In 2023, our average net return was around 7% but at the start of 2024, the deal flow, that is to say the new investments made, is around 7.5%”
.
Although not the norm, such returns are now common: according to data provided by Rock-N-Data, managers included 43 real estate transactions in their portfolios with yields greater than 7.5% during the year. 2023, including 16 for the manager Kyaneos Asset Management, 10 for Iroko, 5 for Corum Asset Management or Sogenial Immobilier…
Here again, these announcements do not predict future returns.
Especially since the managers are hardly transparent: the weight of new assets in the SCPI's overall portfolio is never indicated, making it more difficult to assess the impact of recent acquisitions on final performance.
Do not confuse announced rate and final yield
To get a more precise idea of future performance, the client should know that most of these returns are announced "deed in hand" (AEM), that is to say net of all fees paid on the acquisition of the real estate, in particular transfer taxes, while taking into account the rent received, net of charges and property tax paid by the manager.
“If this rate is a good indicator to get an idea of the distribution rate, it is generally necessary to withdraw 150 to 180 basis points, once the management costs have been deducted as well as a little rental vacancy, the properties not being not permanently 100% rented
,” notes Jonathan Dhiver, the founder of Meilleurcpi.com.
“Ultimately, an SCPI which displays an actual yield of 7% will offer a yield of 5.20%
,” he specifies.
Towards a timid increase in interest rates
In a market that is still unfavorable for sellers, managers capable of collecting should continue to achieve good deals.
Especially since the clouds seem to be moving away.
If overall collections fell sharply in 2023 (decrease of 52.4% compared to 2022), the liquidity crisis seems to be over.
Several managers have shares awaiting withdrawal.
But these only represent 2.11% of the outstanding SCPIs at the end of 2023, or less than 2 billion euros, according to Rock-N-Data.
On the other hand, the cycle of rising interest rates, unfavorable for the valuation of SCPIs, is over.
Now, all eyes are on the United States, where the Federal Reserve (Fed) is expected to lower its rates before the European Central Bank.
On March 7, its president Jerome Powell confirmed before the House of Congress that a reduction would take place this year.
Financial markets anticipate a slight inflection in key rates of 0.25% in June.
It is then unlikely that the Fed will decide to intervene again before the American presidential elections on November 5.
Even if timid, this drop will relieve the valuation of SCPIs.
But we will have to wait several months to see it appear in the revaluation of share values.
In any case, 2024 should be a less turbulent year than 2023. Last year, 26 SCPIs had to lower their share prices, following pressure from the Financial Markets Authority after successive rate increases.
So many favorable signals for investors.