40% of SCPIs have been awarded the label
Société Civile de Placement Immobilière (SCPI) is set to become one of the key investments of 2023. With credit rates on the rise, they are attracting individuals who are turning away from direct rental investment.
Of the hundred or so products on the market, a good proportion are backed by the argument of "responsible" investment. Since 2020, the "SRI" label has been adapted to real estate, and more than 4 out of 10 SCPIs have obtained this label.
Investing in rental property for as little as a few hundred euros while making a responsible gesture: a powerful argument for individuals who are increasingly concerned about the impact of their investments. All the more so since, in 2022, SRI SCPIs, on average, posted slightly higher returns than those without the label. However, this finding masks a number of disparities.
20% lower returns for SRI SCPIs over 10 years old
A study carried out by the online magazine idéal investisseur.fr, known for its comparative analysis of SCPIs on the market, reveals significant differences among SRI-labeled funds, depending on their age. " Classic" SCPIs have the same average yield, regardless of their age," explains Caroline Courvoisier, editorial director. "But that's not at all the case for SRI-labeled funds, for which the average yield differential is around 20% in favor of SCPIs less than 10 years old.
For the magazine, which analysed the 2022 results of all yield SCPIs, the main reason for these disparities lies in the obsolescence of part of the assets of the oldest SCPIs. With more premises in need of renovation, sometimes less suited to current rental demands, their proportion of vacant units is higher.
Conversely, the youngest SCPIs are in the process of building up their assets. They buy properties that are often very recent, and aim directly for good environmental qualities, with a new trend to target Europe rather than just France.
Another fundamental difference lies in the reserve strategy, i.e. the proportion of profits set aside by SCPIs and not distributed to investors. In this respect, some recent SCPIs have opted to do the minimum in order to favor distribution to their investors, and post a better rate. The potential consequence of this is less stable returns in the medium term, when the portfolio is in need of renovation.
But these arguments alone cannot explain such a wide yield differential, which is not found in "classic" SCPIs. For the magazine, the fact that SCPIs are taking steps to obtain the SRI label may reflect their ambition and commercial dynamism. The fact that label-holders have collected 50% more funds than others (and even 80% for the oldest SCPIs), is perhaps a sign of this.
Source: ideal-investisseur.fr SRI SCPI survey