The strength of SCPI is confirmed even during a crisis.

At the 47th Quai d'Orsay, there were three finalists on the shortlist: BNP Paribas REIM, Amundi Immobilier, and Primonial REIM.

Three real estate investors, and as we have already reported, Sigrid Duhamel, president of BNP Paribas REIM, was able to stand out in this transaction process for the headquarters of Natixis in the 13th arrondissement, amounting to around 300 million euros (see below).

The deal was made during the coronavirus crisis, which is confirmed by the dynamics of real estate management companies. Three days before the announcement of the quarantine in France, Amundi Immobilier signed a contract for the #Curve project in Saint-Denis. In early March, La Française REM acquired the headquarters of Rexel in the 17th arrondissement of Paris.

As for Primonial REIM, it is currently participating in several major tenders in the central business district of the Paris office market, as well as in healthcare, residential real estate in Europe, and in the hotel and commercial sectors.

Convinced of the need to create funds fully dedicated to the SCPI theme, especially in the current climate, the management company intends to continue expanding the assets of its funds based on the quality of its signature and its ability to invest its own resources. This is a clear advantage at a time when lenders are becoming very selective and vigilant regarding the quality of applications and sponsors.

“The investment teams at Primonial REIM are now fully mobilized to finalize or position themselves for several significant acquisition deals,” assures Grégory Frappe, the chairman of the management company.

More than 1 billion euros for investment "We have more than 1 billion euros for investments across all asset classes," he continues. "Real estate will continue to be profitable: interest rates will remain low, liquidity will be abundant, and the risk premium will continue to reward investors well overall. We will remain very active in the office and healthcare markets, which will remain the two main asset classes in our overall portfolio. We are also looking at opportunities in the pan-European residential sector and the hospitality business. Finally, we will be even more cautious than before regarding the commercial sector."

The management company intends to invest in the retail segment, stating, "we had an investment reserve of 80 million euros," but "we will be very cautious. We will focus on high street retail, considering projects ranging from 5 to 10 million euros that have significant value and will carefully examine the tenant's strength in terms of their operations and resilience after the crisis. For example, the Franprix store in the 18th arrondissement of Paris, which we plan to acquire with a yield of about 4.5%. We also plan to acquire three Courtepaille restaurants, where the yields exceed 6%. Capital investments have already been made, and the lease term is 12 years."

Competitive processes in the healthcare sector In the healthcare sector, where Primonial REIM is one of the largest players in Europe alongside Icade Santé, Primonial REIM is trying to secure exclusive rights to five portfolios worth over 1 billion euros. This indicates that "investments in healthcare real estate continue to attract investors and generate competitive processes."

As for the hotel business, although this segment is one of the most affected by the health crisis, Primonial REIM continues to pay close attention to it.

What will happen in 2020? Let's remember that in 2019, SCPI collections set a new record, increasing by 68% over the year, with a total collected volume of 8.6 billion euros. They were very active in the investment market, "accounting for 24% of the amounts invested in France (compared to 19% in 2018)," says Knight Frank. Since the beginning of 2020, although the collections from savers remain very active, "the share of SCPI has decreased to 11%," points out Matthieu Garrot, co-director of the investment department of the consulting company. The figures for SCPI/OPCI collections for the first quarter of 2020 are still unknown. However, as the broker notes, the figures for insurance contributions provide the first trends, having decreased by 58% year-on-year by the end of February. "In light of the declining rates, could this decrease be exacerbated by the health crisis? And what is the fate of SCPI/OPCI, whose attractiveness may be weakened by significant uncertainty affecting the economy and real estate performance?" asks Knight Frank. The coming months will show.