The strategy

What strategy?

CORUM has implemented an original management style: flexible management. It is the first SCPI in France to ever implement this management style.

Like its economic and financial environment, the real estate market is also subject to uncertainties. This is why CORUM decided to use flexible management in order to benefit from great mobility in terms of asset allocation. In this way, it takes advantage of the market environment instead of submitting to it.

Why use flexible management for a diversified SCPI in the current market environment?

Modelled on flexible management in the stock market, flexible management in real estate investment is based on the following premise: "today's solution may be used tomorrow, but rarely on the day after".

For instance, retail units have long been neglected by major institutional investors. However, after the subprime crisis, they began to attract considerable attention as they offer stable income. They became a genuine value creation tool for the tenant. In this new environment, the prices of these assets sustainably increased due to heavy demand from investors while rents remained stable, causing yields to go down.

CORUM's flexible management style

Thematic SCPIs 

These funds are based on a specific investment theme (retail units, car parks, warehouses, logistics, healthcare...). They have the advantage of benefiting from growth in a specific sector and from its economic fundamentals, which sometimes offer attractive prospects. Nevertheless, such SCPIs are dependent not only on the cycles of that sector but also on investors' appetite for this type of asset, which may have a positive or negative impact on prices. Since the SCPI can only invest the money raised from its capital increases in one sector, it cannot choose when to invest it and it is at the mercy of the market's vagaries: while price increases generate higher investment costs and lower yields, prices decreases have a negative impact on the value of the existing portfolio.

Standard diversified SCPIs

Most of these SCPIs hold portfolios consisting of at least 80% of offices in the Paris region. These "standard" portfolios are attractive in many ways, especially in terms of market depth. However, although this category of SCPIs is undeniably diversified as far as tenants and their lines of business are concerned, portfolios are still very concentrated. Therefore, this category ends up having the same drawbacks as thematic SCPIs.

The CORUM SCPI differentiates itself through an open and opportunistic strategy

The CORUM SCPI's investment policy is intended to capture opportunities in terms of rental income through diversification by:

  • country (France and eurozone countries),

  • property classification (offices, retail units, industrial facilities, warehouses, hotels, car parks, healthcare facilities, student residences, logistics platforms).

 

The investment process takes into consideration a combination of 4 key factors:

  • depth of the rental market,

  • vitality of the area,

  • tenant quality,

  • lease term.

 

CORUM seizes investment opportunities by taking advantage of market cycles. This strategy helps it spread the risk across its entire property portfolio through:

  • geographic diversification within the eurozone,

  • diversification in terms of types of assets.

 

CORUM's asset managers endeavour not to invest in real estate markets subject to strong pressure on prices and yields.