Uncover the resurgence in inflows for real estate funds SCPIs, OPCIs, and UCs at the close of 2024, hinting at a positive trend for the upcoming year.
The landscape of real estate investment vehicles, specifically SCPIs, OPCIs, and UCs, has witnessed a notable yet subdued recovery in inflows as we approach the conclusion of 2024. With a total accumulation of approximately €600 million, this figure starkly contrasts with the exuberant peaks observed at the dawn of the decade, and even more so when juxtaposed with the robust €2.1 billion amassed in 2023. However, a silver lining emerges as net inflows exhibited a marked resurgence towards the year’s end, particularly for SCPIs—a trend that may very well persist into 2025.
This resurgence marks the third consecutive quarter of increased inflows for unlisted real estate funds. In the second quarter of 2024, SCPIs, OPCIs, and real estate unit-linked funds tentatively returned to positive territory, recording a net inflow of approximately €80 million. This upward trajectory was further solidified in the third quarter, where inflows surged to around €240 million, culminating in a remarkable fourth quarter that saw net inflows exceeding €700 million, as per the latest data disseminated by ASPIM and IEIF.
It is noteworthy that SCPIs remain the sole category to report positive net inflows. Despite this late and somewhat tepid recovery in buyer activity—especially when contrasted with the pre-crisis subscription rates—the 2024 financial year has not managed to reach the heights of its predecessors. The net balance of around €600 million for real estate AIFs pales in comparison to the impressive €2.1 billion recorded in 2023, and the staggering figures of over €10 billion at the decade’s outset, peaking at €15 billion in 2022.
SCPIs, however, have demonstrated resilience, experiencing a significant rebound in the fourth quarter. After several quarters oscillating between €750 million and €900 million, they have once again surpassed the billion-euro threshold, achieving an impressive €1.3 billion. For the entirety of the year, SCPIs have garnered slightly more than anticipated, totaling €3.5 billion—albeit still falling short of the impressive figures seen over the past decade.
Interestingly, we must hark back to 2014 to find such a modest total of €2.7 billion. A glimmer of optimism, as highlighted by ASPIM and IEIF in their press release, is the normalization of the “flow of buybacks.” ASPIM estimates that the value of shares traded on the secondary market reached approximately €1.2 billion in 2024, a volume comparable to that of 2023, despite the depreciation in share prices observed throughout the year.
While a considerable portion of SCPIs experienced a decline in subscription prices last year—affecting 24% of the market by number, according to ASPIM—these entities, often sharing similar characteristics, appear to be less susceptible to liquidity challenges, on average.
As for SCPI inflows, which are gradually rebounding, it is evident that they are concentrated within specific categories of vehicles. In addition to the perennial favorites that have dominated recent quarters—Transitions Europe, Iroko Zen, Corum Origin, Remake Live, Epargne Pierre Europe, ActivImmo, among others—new entrants have begun to carve out their niche. According to ASPIM, a noteworthy 9% of the 2024 inflows were captured by the 19 new SCPIs launched this year. This influx predominantly favors diversified SCPIs, mirroring trends from the previous year, with these multi-sector and multi-geographical vehicles accounting for an impressive 68% of gross inflows in 2024.
Conversely, OPCIs and real estate unit-linked funds continue to grapple with net outflows. However, the pace of withdrawals for OPCIs has shown signs of deceleration, with a loss of “only” €333 million this quarter, a marked improvement from the €404 million in Q3 and €703 million in Q2. Consequently, OPCIs concluded the year with a less dire outcome, recording a net outflow of €2 billion, compared to €3 billion in 2023. Their capitalization has suffered a nearly 18% decline over the past year.
In stark contrast, real estate unit-linked products have seen an uptick in outflows, amounting to -€250 million in the last quarter, compared to -€118 million and -€164 million in Q2 and Q3, respectively. Thus, unit-linked products have experienced a more significant loss in 2024, totaling -€930 million, surpassing the -€546 million recorded in 2023.
While the real estate investment landscape is navigating through a phase of recovery, it remains fraught with challenges and disparities among various investment vehicles. The resilience of SCPIs amidst this tumultuous environment offers a glimmer of hope, yet the overall trajectory suggests a cautious optimism as we move forward into 2025.
