At this year’s MIPIM, the world’s largest real estate fair held in Cannes, the Lisbon Region stand presented a compelling agenda to showcase the attractiveness of investing in Portugal and more specifically in the region. On the 13 of March, Portugal’s commercial real estate market took center stage in a discussion on why French SCPIs are finding it an increasingly relevant investment destination. Moderated by Alexandre Lima, Director at Iberian Property, the Quick Talk featured insights from Jean-Marie Souclier, President of Sogenial Immobilier, Jean-François Chaury, Deputy Managing Director of Advenis, and Jorge Bota, CEO of B.Prime Portugal.
An SCPI (Société Civile de Placement Immobilier), also known by its generic name pierre-papier, is a collective financial investment in real estate. This can include office and retail property, as well as healthcare facilities and residential buildings. As their name suggests, SCPIs are designed to generate income. This income is not guaranteed, and may rise or fall according to market conditions and the performance of the SCPI. Distributed income comes from rental income, financial income from SCPI cash management, and any capital gains from property sales. The amount of this income depends in particular on rental activity and transactions carried out. This income, also known as dividends, is usually paid on a quarterly basis. The management company charges fees for rental management of the properties held by the SCPI and for transactions carried out on its behalf.
To understand how this French vehicles carry out their transactions, it is important to have in mind that SCPI are regulated investment vehicles with a debt cap of 40%, meaning they must rely heavily on available equity. They offer investors the ability to diversify geographically while ensuring stable and ambitious returns, often achieving net entry yields of around 7%. Importantly, they are subject to taxation in the regions they invest in, and Portugal’s tax framework for real estate investment is seen as more favorable compared to France. This, coupled with a steady real estate market, has made Portugal an attractive destination for French SCPI funds.
The panelists shed light on the types of assets that capture their attention in Portugal. French SCPI investors prioritize location not necessarily for its aesthetic appeal but for its liquidity and long-term value potential. Their focus is on key regions such as Lisbon, Porto, and the Algarve, which offer dynamic tenant pools and a balance between stability and growth. SCPI funds also recognize the importance of partnering with local experts to navigate the Portuguese market effectively. Being both already invested in Spain beforehand, Sogenial and Advenis (with the SCPI Elialys) made their debut in Portugal in 2024.
Elialys chose to acquire an industrial asset in the Lisbon district for approximately €5 million. The warehouse, strategically located near the A8 motorway, has been leased for 20 years to a food processing company with export ties to Spain and France. This investment reflects SCPI’s preference for high-potential logistics assets with long-term tenants in place.
Similarly, Sogenial Immobilier made its mark in Portugal with the acquisition of Évora Retail Park, an 8,000-square-meter retail asset. Jean-Marie Souclier highlighted Portugal’s strong fundamentals as an investment destination, citing its economic resilience and growing attractiveness within their pan-European strategy.
Despite the appeal, investing in Portugal comes with its own set of challenges. The panelists acknowledged that while the market is liquid, transaction processes remain lengthy, requiring patience and strategic execution. However, the rental growth prospects and the availability of high quality assets at more moderate ticket sizes, contribute for their overall optimism and interest in continuing being active on the acquisition side.