Axipit Real Estate Partners: real estate, learning from the past for a more serene future

How is the SCPI Upêka, which you have just launched, positioned?

The ambition of this SCPI is to respond to the shifts in the European real estate market through an approach centered on supporting change and enhancing asset value. This market is simultaneously facing rising interest rates, which have triggered a repricing of assets, an evolution in usage patterns accelerated by the health crisis, and increasingly stringent environmental regulation. All of these factors are creating particularly favorable conditions for building a diversified portfolio of eurozone assets at attractive yield levels. Upêka has the considerable advantage of not carrying a stock of assets acquired in the past that would weigh on future returns for investors. It can also draw on the asset management expertise of Aquila Asset Management, Axipit's parent company, further strengthened by its integration into the Catella group, which is present in several European countries.

This SCPI is designed to be accessible to as many people as possible, enabling savers to build up savings or supplementary income to fund their retirement. Subscriptions are available in full ownership, in dismembered ownership, or through scheduled payments with a minimum of €200. Furthermore, the absence of subscription fees means that the entirety of the client's contribution is allocated to real estate acquisition.

Are opportunities currently concentrated primarily in the office sector?

While offices have certainly struggled since the pandemic, the real estate market is highly heterogeneous. There are numerous opportunities to seize, both geographically and across different asset types. Covid brought about a profound change in habits: remote working has become more widespread and employees are placing greater demands on work-life balance. As a result, many offices have been vacated by tenants seeking more accessible locations and flexible working environments. The French office market suffers from a lack of visibility, as it remains difficult to assess the full extent of price adjustments. In certain European countries, however, office prices have already adjusted significantly — Ireland and the Netherlands being prime examples. We are therefore targeting these office markets, where transactions can offer yields in excess of 7%.

In France, we are currently focusing on certain neighborhood retail assets where strong opportunities exist. However, extreme selectivity is required, with careful analysis of tenant solidity, as occupiers must be able to withstand rising costs and charges.

What lessons can be drawn from the turbulence in the paper real estate market?

In a highly unsettled market, we are seeking to reassure investors by reinforcing investor education. Three key lessons can be drawn.

First, controlling fundraising is essential. Even as an increasing number of acquisition opportunities emerge, it is important not to rush, and instead to prioritize strong asset selectivity. Having raised €20 million in three months, our SCPI is taking the time needed to invest. It has reviewed a pipeline of €350 to €400 million in potential acquisitions but will only genuinely commit to assets that meet our criteria.

Our SCPI currently plans a six-month enjoyment period to guarantee this selectivity and allow sufficient time to deploy capital in the best possible conditions. Given that the average holding period for a SCPI unit is 22 years, this enjoyment period does not impact the investor's final return.

Second, the current liquidity crisis affecting certain SCPIs is a reminder that institutional investors have poured heavily into the sector — yet they do not share the long-term perspective of the private investor. For our part, we wish to return to the original spirit of the SCPI, which was initially launched as a retail vehicle. We will therefore favor direct ownership by private investors.

Finally, the sharp rise in interest rates underscores that the absence of debt is a strength. It removes the need to dispose of assets hastily in order to meet loan repayment deadlines. The SCPI Upêka has not used leverage to date, which further reinforces the stability of the returns offered to investors. However, the yields available on certain assets today are leading us to consider reintroducing the use of leverage.

Ultimately, drawing all the lessons of the past while seizing today's acquisition opportunities allows us to look to the future with greater confidence.