Investing in SCPI in four questions

Since the onset of the economic crisis associated with the global pandemic, many of us have realized the need to put our money in safe investments. Financial investments, while very profitable, have a reputation for being unstable. At this time, investors need to be reassured. Also, they are turning more and more towards real estate products and in particular SCPI.

What is a SCPI? 

A SCPI (or real estate investment company) is a company responsible for investing in real estate and managing it on behalf of investors who buy shares in its capital. The SCPI with fixed capital cannot increase their capital. Consequently, when the maximum threshold thereof is reached, no other investor can invest in this type of SCPI as long as a shareholder has not put theirs up for sale. Conversely, the SCPI with variable capital can welcome new investors at any time. 

What are the different types of SCPI?

There are three types of SCPI. First, the SCPI performance invests mainly in real estate for professional use (offices, warehouses, shopping malls, healthcare establishments, retirement homes, etc.). tax SCPIs take advantage of the attractive tax measures put in place by states to encourage rental property investment for residential use. Finally, SCPI of capital gain scrupulously study the real estate market and rely on building value over time.

How do SCPIs invest?

If SCPIs are not as profitable as certain financial investments, it is because the risk is measured and controlled.What allows a SCPI to stabilize the profitability of its investments?It is by simply diversifying them.For example, most of them buy goods in euro area countries to take advantage of the most attractive tax arrangements.This is particularly the case with tax SCPIs.Some real estate investment trust companies are interested in countries located outside the euro area while remaining in the European economic area to offer greater profitability.Then, SCPIs diversify investments depending on the type or destination of real estate.Performance SCPIs, for example, will diversify their purchases among goods for commercial, industrial, logistics or service sector.Others, on the other hand, will specialize in a particular sector while varying the type of goods.

Do you need to know finance or real estate to invest in SCPI?

NO. It is the advantage of the SCPI compared to direct investment. The company manages its real estate assets on behalf of those who bought shares: from the purchase and resale of goods, including maintenance of the premises, accounting management and reversion of profits. Financial studies as well as those of the real estate market are therefore carried out by the SCPI expert groups. It is therefore not necessary to know the financial and real estate markets nor have accounting skills to invest in SCPI.