Significant Outflow from Real Estate Funds

The three main categories of real estate funds available to the general public saw a 53% decline in volume compared with the first half of 2022.
 

The first half of 2023 was marked by a slowdown in inflows into unit-based funds: OPCIs and civil companies. These two types of investments faced an increase in redemption requests amid adjustments to real estate asset values since the beginning of the year. To a lesser extent, SCPIs also faced an increase in redemption requests in the first half of the year, leading to a decline in net subscriptions. In the current economic climate, investors are adopting a more wait-and-see approach toward real estate investments. Following the interest rate hikes decided by the ECB to combat inflation, we are seeing a downward adjustment in real estate prices across Europe. However, not all asset classes are affected uniformly, and the trends vary in intensity depending on the type of asset and location. According to Jean-Marc Coly, President of ASPIM, “Investors should keep in mind that unlisted real estate funds remain, above all, long-term investment products that help smooth out downturns over time. The price adjustment in the commercial real estate market should offer new investment opportunities for real estate funds, which will be able to purchase properties at higher rates of return. Furthermore, it will be up to each SCPI manager, in a fully transparent manner, to take current developments into account and adjust unit prices as necessary.”

SRI-labeled funds raised €2 billion in the first half of 2023
The 75 retail SRI-labeled funds as of June 30, 2023, accounted for 47% of net inflows and 52% of the market capitalization of retail unlisted real estate funds in the first half of 2023.

SCPI: Half-Year Net Inflows Down 23% Compared to 2022
In the first half of 2023, netinflows into SCPIs totaled €4.1 billion, down 23% compared to the first half of 2022.
Net inflows into SCPIs totaled approximately €1.7 billion in the second quarter of 2023, down 28% from the first quarter of 2023 and 35% from the first quarter of 2022.
With €1,070 million in shares traded, the secondary market for SCPI shares saw significant growth in the first half of 2023 (+32% compared to the second half of 2022). This trading volume on the secondary market corresponds to a share turnover rate of 1.2% for the half-year (compared to an average of 0.8% per half-year in 2022). 
Diversified SCPIs accounted for 44% of net inflows in the first half of the year. Next, SCPIs with a focus on “offices” (29%) outpaced those focused on “healthcare and education” (15%). SCPIs focused on “logistics and commercial spaces” captured 7% of net inflows. Finally, “retail” and “residential” SCPIs accounted for 3% and 2%, respectively, of net inflows in the first half of 2023.
As of June 30, 2023, the market capitalization of SCPIs reached €93.5 billion, up 1.8% quarter-over-quarter.

Units-of-account real estate investment trusts raised €1 billion in the first half of the year
Real estate investmenttrusts offering units-of-account recorded €1 billion in net subscriptions in the first half of 2023, a 66% decline from the record amount recorded in the first half of 2022.
For the record, in the first quarter of 2023, the average overall performance of all real estate unit-based investment vehicles stood at -0.5%.
As of June 30, 2023, the net assets of real estate unit-based investment vehicles totaled €26.8 billion, up 0.8% quarter-over-quarter.

Outflows from retail-oriented real estate investment trusts (OPCIs) continued in the first half of 2023
In the first half of2023, retail-orientedreal estate investment trusts (OPCIs) recorded netoutflows of €977 million. These outflows were driven by the decline in performance since the beginning of the year. As of the end of May, the overall performance of retail OPCIs stood at -2.9%.
As of June 30, 2023, the net assets of retail OPCIs totaled €18.3 billion.