Remember
- Performance: variable depending on the years and the health of real estate and financial markets
- Risk: non-guaranteed return and capital
- Duration : at least eight to ten years
- Liquidity: superior to SCPI, with selection possible at any time
Like real estate investment trusts (SCPIs), real estate collective investment trusts (OPCIs) are considered a “rock and paper” investment. They also allow you to “co-own” real estate (offices, businesses, housing, etc.) by purchasing not physical property but a share or OPCI share from a “management company”. The saver can also go through a bank or an insurance company. Very often, OPCI is also subscribed through life insurance settlement units when it is not through a securities account.
This type of fund, not listed on the stock exchange, includes both real estate assets (buildings, stocks or shares of real estate companies), up to at least 60%, and financial assets (stocks, bonds, etc.). In addition, it must have at least 5% cash, which makes it easier to resell its shares.
OPCIs can take the form of real estate investment trusts (FPIs) or primarily real estate investment companies with variable capital (SPPICAVs), based on the SICAV model. Management companies must be approved by the AMF and must present guarantees for the experience of their managers as well as their material and financial capabilities (minimum share capital, equity, etc.).
OPCIs are proving to be a risky investment to consider in the medium or even long term. The capital and return are not guaranteed, but the assets in which the savers invest are held by the banking institution and protected in the event of the failure of the management company.
When you acquire OPCI shares, you expose yourself to both real estate and financial market risks. The value and return on your investment can therefore change over the years, up or down. OPCI’s average overall performance thus fell to -3.48% in 2022 after reaching +4.4% in 2021.
These collective investment organizations have to repay a large part of their profits each year, in particular 85% of their net real estate income. The amounts you receive therefore depend on rents, capital gains from the sale of assets, as well as returns on financial securities and the amount of shares you hold.
Note that companies that sell OPCI and manage real estate assets and rental properties charge management fees, generally between 1.5% and 4.5% per annum. To this are added fees for the subscription of shares, from 3 to 9%. The Key Information Document (KID) must always contain basic information about your investment.
Notification of income : be considered for a period of at least eight years to properly amortize the costs may supplement precautionary savings and SCPI shares.
Taxation
OPCIs for the general public most often have the legal status of SPPICAV. As a result, the taxation of dividends and capital gains applies: flat rate tax (PFU) of 30% or, if you apply, the progressive scale of income tax plus 17.2% social security contributions.
If it takes the form of a REIT, the rents and profits are essentially taxed as income from property and capital gains from real estate. Finally, if the OPCI is underwritten through a life insurance policy, the investor is subject to the taxation applicable to that envelope.
In all cases, the share of OPCI real estate is included in the real estate tax base.
Sequence
When an investor dies, their OPCI shares are subject to inheritance tax. But if they are led through life insurance, they benefit from the more favorable taxation of this envelope.