Benefits and risks
What precautions should be taken before investing?
The risk attached to the CORUM SCPI is equivalent to that of any property investment. The main risks are related to changes in the real estate markets.
Income not guaranteed, risk of capital loss
The potential income and the value of CORUM SCPI shares can rise as well as fall. They depend on the economic conditions and situation of the real estate market, in particular how easily and under which terms the properties can be rented and where they are situated.
Investments and any income from it are not guaranteed. They depend on the trends in the real estate market during the investment period.
Risk related to the SCPI's debt
The SCPI may use debt up to a maximum amount determined by the General Meeting and indicated in the prospectus. The Management Company is not authorised to borrow more than 40 % of the sum of the estimated value of properties and the inflows (net of expenses) recorded but not yet invested.
The use of debt by the SCPI may increase the risk of capital loss. Upon liquidation, any amounts to be received by the shareholders are subordinated to the repayment of the outstanding or full amount of any loans taken out by the SCPI.
Risk related to investing with borrowed money
If they borrow money to buy CORUM shares, investors should bear in mind that they may experience difficulties in meeting their interest obligations or in repaying the principal amount of the loan in the event of a downturn in real estate prices. Also, loan interest payments might not always be deductible from property income tax.
If shares bought with borrowed money do not provide sufficient income to repay the loan, or
in the event of a price decline when the investor seeks to sell their shares, the investor will have to pay the difference.