SCPI: Definition, Benefits, And Risks Of This Real Estate Investment

Civil, real estate investment companies (REITs) attract new investors every year in search of alternatives to life insurance in euros or regular returns, in particular, to compensate for income losses once retired. Overview of this diversification real estate investment, its advantages, and disadvantages, the different types of REITs

What is SCPI?

The SCPI was born at the end of the 1960s and was enshrined in French law by the law of December 31, 1970, and then by the Stock Exchange Commission (Cob, former name of the AMF) on July 1, 1971, in its general regulations. This acronym stands for a local real estate investment company. Its primary purpose is the acquisition and management of rental property assets to achieve a return. They can carry out development work at the margin, buy capital goods and resell certain buildings on an ad hoc basis, but they have a formal prohibition to build real estate.

Most REITs are intended to invest in a commercial real estate, with offices and businesses leading the way.

SCPI With Fixed Capital

Some SCPIs are known as variable capital or closed-end capital. > Performance SCPI: fixed or variable money, what are the differences?

In the case of a closed-end SCPI, an investor can only subscribe for units during fundraising periods designed to increase his investment capacity. The frequency of capital increases varies widely from one closed-end SCPI to another. This type of SPCI is also more constraining to invest since you have to wait for a subscription window to buy shares, and especially if the partner wants to sell his shares, he must find buyers.

SCPI Of Surplus Value

Value-added SCPIs also was known as capitalization SCPIs rely on buildings, premises, housing or offices with a high resale appreciation potential to deliver capital gains to the futures market. In contrast to the other two types of investments (tax and yield SCPIs), these companies do not distribute a small amount of quarterly or half-yearly income, the logic being to carry out regular evaluations of the value of the units.Among the SCPI of capital gains, we can mention Pierre 48 managed by Paref Gestion, Patrimmo Croissance (positioned on the acquisition of the bare ownership of housing) managed by Peritoneal Reim. It should also be noted that the Immune two commercial SCPI led by Society is part of similar logic while distributing dividends.

Or With Variable Capital

SPCIs with variable capital are more flexible since they can issue or cancel new shares, which make it easier for investors to buy or sell units. However, the statutes of this type of company set to purchase and exit limits.

SCPI Tax

Thanks to the tax systems inherited from the rental investment, the SCPI Pinel or SCPI Malraux type SCPIs are intended for investors wishing to invest in real estate without worrying about management while benefiting from a reduction in tax. They have the double advantage of combining economic leverage and diversification in several buildings. However, the yield of this kind of products is lower. > SCPI tax, reduce tax with limited investment
The real estate of these SCPIs is often composed of new homes located in the city center.
Before placing its funds in such an SCPI, the investor must ensure that he does not need money immediately by taking stock of his patrimonial and fiscal situation since these SCPI are more restrictive. To benefit fully from the tax benefits, the holding of the shares of a Pinel SCPI is obligatorily 6, 9 or 12 years from the rental of the last housing of the SCPI, which implies a period of detention generally more extended from three to five years beyond the tax retention period, i.e., a total lock-in period of up to fifteen years.