The REIT in commercial real estate continue to attract investors with income flattering, because the prices of the offices are not so much flamed.
Very, the real estate investment trusts (REITS) have experienced a new record year, with € 6 billion of sales in 2017. If we add the € 4.2 billion placed in collective investment funds real estate (OPCI), the investors have invested 10.2 billion euros in the previous year in these products, mainly dedicated to the real estate business.
indeed, SCPI and the OPCI are collective investment schemes allowing investors to buy small shares of a real estate portfolio diversified, mainly in offices and shops, from 1000 euros live, or even less in the context of certain life insurance policies online.
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the prices of The offices have not flamed
The tax reforms have caused a little wait-and-see in the second half of 2017, but it is a brake related, because it is estimated that only 5 to 10% of 400000 holders of the REIT were indebted to the ISF before its replacement by a tax on the real estate asset (IFIS). "The collection of SCPIS is expected to remain good in 2018, because they retain a current profitability to be attractive, 4.43%, on average, compared to their market value, which has increased by a little less than 2%," said Christian de Kerangal, managing director of the Institute of savings and housing foncière (IEIF).
While the price of housing continues to soar, the office market remains much more wise. "The purchase price of the office buildings reflects the performance of the rents," says Jean Pitois, director-general of Périal, a pioneer of REITS in France. In contrast to housing, where prices are often disconnected from the rental potential, the offices have not flamed, as reflected in the valuation of SCPI.
"Their prices have increased, but not everywhere, nuance Christian de Kerangal. The increase is selective, mainly in Paris, where there are few assets for a lot of buyers from all walks of life, which decreases the profitability." In the cities, less privileged, the difficulties of resale and the low occupancy rates continues to be of concern. Managers of REITS are calling beyond the borders.
Distribution of wealth in REITS
Source: IEIF.fr at the end of 2016
"We launched in may of 2017 with a new SCPI, Corum XL, which has invested in Ireland, in Italy and in Germany, and that generates an income 6.58%," confirms Frédéric Puzin, CEO of Corum. "Investing abroad is a good way to reduce the risks, more than a province, because there are still differences in cycles between the countries," said Christian de Kerangal.
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The risk is, nevertheless, important, because it can be difficult to recover his money in case of a turnaround in the market, as was the case for many investors during the decade of the 1990s. Similarly, most of the REITS are sold with a purchase price (purchase costs included) superior 9% to 13% of their resale value, which increases the risk of a lower value before five or ten years. For the limit, we can buy shares of REITS in the context of contracts of life insurance multi-support, because the insurer then needs to be able to pay its insured when they resell their shares.