The recovery continues in French real estate investment funds

Frédéric Bôl’s analysis of the latest figures released by the French Association of Real Estate Investment Trusts (Aspim) and the Institute for Real Estate and Land Savings (IEIF) showed signs of gradual improvement in real estate funds over the past several quarters, even if they “should not obscure the persistence of vulnerabilities in certain segments, particularly in the office market, where the rental environment continues to deteriorate.”

On the positive side, therefore, fundraising for SCPI's, the French equivalent for what are known as real estate investment trusts in the U.S., “continues to grow and the values of open-end SCPI shares remain broadly stable,” notes the president of ASPIM, who sees “liquidity pressures easing somewhat, against a backdrop marked by the temporary suspension of capital variability for certain SCPIs and the launch of secondary markets designed to contribute to the gradual unlocking of the share market.”

During the first quarter, gross inflows into SCPIs reached €1.4 billion (up 7% compared to the same period in 2025), driven by diversified funds, which accounted for 72% of these inflows, ahead of office SCPIs (20%), healthcare and education (3%), logistics and industrial properties (3%), and retail (1.4%). Over the same period, net inflows for SCPIs totaled €1.2 billion ( up 10%).

The secondary market remained active, with €238 million in requests for compensated redemptions or exchanged shares, representing 17% of quarterly gross inflows. The value of pending shares stands at €2.4 billion, or 2.8% of the market capitalization. This amount is down 14%, or approximately €350 million, compared to December 31, 2025. This decrease comes amid several announcements of temporary suspensions of capital variability for certain SCPIs, leading notably to the resetting of order books to zero for the affected vehicles and the establishment of secondary markets, according to Aspim and IEIF.

On the bright side, “performance remains generally resilient, with a stable market distribution rate and a return of overall real estate yields to positive territory in 2025 (see elsewhere),” notes Frédéric Bôl. “The very clear deceleration in value adjustments observed over the past two years is also an encouraging sign for the unlisted real estate market.”

Based on reference prices as of January 1, 2026, the capitalization-weighted distribution yield, across all categories, stands at 1.14% in the first quarter of 2026, a level that is broadly stable compared to the first quarter of 2025 (1.13%).

This overall stability is accompanied, however, by mixed trends in interim dividends paid by SCPIs. This is the flip side of a situation analyzed by ASPIM and IEIF. Weighted by market capitalization, the average interim dividend paid in the first quarter fell by 6.7% compared to Q1 2025. Thus, 52% of SCPIs, by number, maintained or increased their interim distributions per share. Among them, 27% raised them, with an average increase of 12%. Conversely, 48% of SCPIs reduced their distributions, with an average decline of around 15%. These declines reflect two main situations. For some SCPIs, particularly those exposed to the office market, they reflect leasing difficulties. For others, which are among the thirty or so SCPIs launched over the past two years, they correspond more to a gradual convergence toward their target distribution rate.

“Longer re-leasing times, renovation plans, and the increasing number of support measures granted to tenants are weighing on the revenues of certain SCPIs and leading to distribution adjustments,” summarizes Frédéric Bôl, for whom “the economic and monetary tensions recently reignited by geopolitical uncertainties in the Middle East call for caution.” He adds: “Changes in interest rates and financing conditions will continue to be a key factor for real estate investment players over the coming quarters.”

It should be noted that in the first quarter of 2026, the average share price of open-end SCPIs, weighted by market capitalization, remained virtually stable, with a change limited to -0.1%. For closed-end SCPIs, prices determined by market comparison show more pronounced adjustments: ten decreases and five increases were recorded during the quarter. The average price in this segment, weighted by market capitalization, thus fell by 20%. As of March 31, 2026, the market capitalization of SCPIs stood at €88.7 billion, down 0.5% quarter-over-quarter but up 3% year-over-year.

In the first quarter of 2026, retail OPCIs recorded outflows of €276 million, down 42% from the previous quarter and 10% from the first quarter of 2025. Since the start of the year, their overall performance stands at -0.1%. As of March 31, 2026, the net assets of retail OPCIs stood at €10.7 billion, down 3% quarter-on-quarter and 12% year-on-year.

Real estate unit-based civil companies, for their part, recorded outflows of €160 million, down 61% from the previous quarter, but significantly higher than the volume observed in the first quarter of 2025 (€60 million). Since the start of the year, their overall performance stands at -0.5%. As of March 31, 2026, the net assets of real estate unit-based investment companies stood at €20.7 billion, down 2% quarter-on-quarter and 3% year-on-year.