Hello to all investors,
has anyone had a good or not-so-good experience with the secondary market for SCPIs like 2nd market?
it seems interesting on paper to buy already established SCPIs like Corum or others?
what do you think?
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Hello,
The secondary market mainly applies to older fixed-capital SCPIs. Some SCPIs have suffered in recent years and offer a significant discount on the secondary market, and not always due to obsolete assets. There is a more significant speculative aspect, and you won’t be investing in the trendiest SCPIs of the moment.
For example, I have in mind a residential SCPI primarily focused on Parisian real estate with approximately a 40% discount on the secondary market. The objective here is not yield but capital gain. In case of a return to normal, this could be a great opportunity because I doubt that Parisian residential real estate could easily lose 40% of its value.
For SCPIs in difficulty with, to put it bluntly, office buildings near the périphérique, I remain of the opinion to wait a bit longer because I’m not certain that the bottom has been reached yet. In any case, it remains very speculative at this stage.
Best,
Alexandre
Just to add some nuance to the Paris residential real estate thing: yes, the fundamentals are there (limited available land, strong demand), but a closed-end SCPI with a 40% discount isn’t necessarily because the market anticipates a decline in assets. It could be near-zero liquidity of the vehicle, historically high fees, or management that hasn’t kept up. The discount can close, or stay there for 10 years if no one buys the shares on the secondary market.
For leveraged Paris residential real estate, I have a preference for physical property, even though access is more restrictive. But I understand the appeal of the value thesis if you have the right vehicle and a long-term horizon.
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regarding 2nd Market - I’m trying to offload some PFO2 shares on it, in parallel with the internal secondary market organized by the management company.
I had looked at vendremascpi.com but it didn’t convince me (I can’t remember why)
in the end, I think I’m going to be stuck worse than the SP shares of Multibonds…
I hope to exit as quickly as possible, even at a discount, and never come back to this asset class again
Honestly, when I see that Primovie is at €54.90 buyer price on the secondary market and it’s likely to drop even further, I find it crazy. That’s almost a 12.75% distribution rate with huge potential for share price increases in a few years. Admittedly, the SCPI isn’t amazing, but apart from the office portfolio, they have rents secured for 10 years with their current leases. I still see it as a great opportunity.
Anyway, I really feel for those who are forced to exit now and have to sell at a loss. This SCPI liquidity problem is really maddening…
The 12.75% calculation is based on what exactly? Last year’s dividend divided by €54.90? You need to check whether the dividend itself hasn’t been reduced and what the management company anticipates for the coming fiscal years. Regarding the Parisian prime office market, I’m not totally negative, but Primovie isn’t all prime, and the upcoming lease renegotiation cycles will reveal the true rental levels. 10-year leases are reassuring, but when they come to term, tenants reshuffle the deck. In any case, you’re right about liquidity—it’s clearly the Achilles’ heel of fixed-capital SCPIs (Sociétés Civiles de Placement Immobilier), and it can remain locked up for a long time.
Yes, it’s based on this year’s projected rent at €7/share. I’m not saying it’s the smartest investment, but it can seem coherent as part of a very long-term strategy if you’re okay with potentially locking up your money until your death.
Regarding healthcare, I think it’s a bit different from office space. You don’t relocate a hospital or nursing home the way you do with an office. I think the healthcare thesis will certainly still hold for a while. From 2030 to 2050, there will be maximum pressure on the need for beds and medical care with the baby boomer generation. There will certainly be a decline afterward.
But at what point the market will start factoring in the end of useful life of assets in the face of the 2050 demographic cliff is my big question.
Concerning debt, I hope the deleveraging strategy will pay off one day and that rates won’t stay at this level forever, but well…