Most of the indices that track the performance of listed real estate companies ended the year in positive territory. The IEIF SIIC France index, which includes real estate companies with SIIC status listed on the French market, posted a gain of 12.89%. Less well, however, than the leading index of the Parisian market (the CAC 40), which jumped by 29.95% last year …
After a year of steep falls in 2020, most international equity market indices rebounded in 2021. This is especially true of the flagship Parisian index, the CAC 40, which had one of its best years for 20 years. . It closes with a gain of 29.95%. This is ahead of the main European (+ 15.8% for the German Dax) and global indices (+ 27.2% for the American S&P 500).
Listed real estate companies: a variable rebound level depending on the geographic area
The performance of listed real estate companies is also growing sharply. While in 2020 the SIICs listed on the French market recorded the worst year of losses since 2008, with a decline of more than 22%, last year they gained almost 13%. Therefore less well than the generalist index of the major Parisian values. However, depending on the geographic area, their results are rather mixed. In the euro zone alone, the stocks referenced by the IEIF Eurozone index (+ 2.06%) or by the EPRA Eurozone (+ 1%) are also down compared to the general indices. In all of Europe, however, they are almost the same. The IEIF REIT Europe index, for example, was up 25.06%. Against + 26.05% for DJ Stoxx Europe. “REITs” (international equivalent of SIICs) are doing much better on the American markets, given that in the meantime the FTSE EPRA Nareit USA jumped by 49% …
No questioning of the industry performance hierarchy
This discrepancy between European and American values does not fail to question analysts. They explain this only by perhaps taking into account an exaggerated difference in the pace of recovery between the two economic zones. In sectoral terms, the year 2021 is not very different from 2020. It is once again the logistics and healthcare segments that have vastly outperformed those of offices and retail. The residential sector in Europe, on the other hand, recorded a negative performance (around 7%), due to a more rigid regulatory environment. This is demonstrated in particular by the decline in the main European residential property company, the German Vonovia (-13%). On the French market, these trends are illustrated by the impressive new performance of Argan (+ 42%), the only representative of the logistics sector on the Paris Stock Exchange.
Real estate companies continue to record attractive levels of returns
Contrary to the European trend, French retail companies are doing better than office-owned companies on average. Aside from Unibail-Rodamco-Westfield, which saw another year of decline (-4.58%, after -54% in 2020), the three main retail SIICs recorded strong increases. + 24.2%, 22.2% and 17.04% respectively for Carmila, Mercialys and Klépierre. The main office real estate companies, Gecina, Covivio or Icade, are in negative or neutral territory. Overall, despite the increases recorded in 2021, real estate companies continue to record rather attractive levels of returns. This is especially true for retail properties, as this yield could be further increased in 2022 if health clarification allows for a return to dividend levels more in line with business …
Argan asset value leaps by 24%
Reconcile the performance of a portfolio of listed real estate companies and the prospect of a rise in interest rates
About the IEIF(I)
Established in 1986, theIEIF is an independent study, research and forecasting center specializing in the real estate sector. Its goal is to support real estate and investment players in their business and strategic thinking, offering them studies, analysis notes, summaries and think tanks.
The IEIF approach integrates the real estate sector into both the economy and asset allocation. It is transversal, the IEIF follows both markets (corporate real estate, housing), real estate funds (listed: SIIC, REIT; unlisted: SCPI, OPCI, FIA) and loans.
(I) Information taken from an official company document