Asset manager (gestionnaire de fonds) : A specialist in charge of improving the value of a portfolio. Asset managers manage a fund for one or several investors with whom they may act as joint investors.
C
Capitalisation rate (Taux de capitalisation) : This is the ratio between potential income from a property and the property’s purchase price.
I
Investment funds (Fonds d’investissement) : These are investment vehicles, often collective (owned by many), that manage financial or real estate assets with a defined investment goal (type of financial assets, management policy, objectives, fees, share value, rhythm of calculation of value and so on). Closed funds have a limited number of shares (or units), do not issue new shares or buy shares that have already been issued. Open-ended funds issue new shares and buy shares that have already been issued.
L
Listed real estate investment company - Société d’Investissements Immobiliers Cotées (SIIC) : The French introduced the regime for the SIIC to promote the ownership, development and sale of assets on the letting market (commercial, housing, services or operational estate markets). The minimum time period for ownership using this regime is 10 years. The status enables companies to benefit from two tax breaks as they are exempt from company tax as well as from tax on any capital gains. In exchange, companies are required to distribute at least 85% of their operating profit, 50% of capital gains and 100% of dividends received from subsidiaries.
N
Net initial yield (Taux de rendement net immédiat) : Gives as a percentage the ratio between the net income (excluding taxes and charges) from a property and the acquisition cost (price of the building plus fees and transfer duties).
P
Pension funds (Fonds de pension) : Pension funds invest the capital given to them by individual savers in securities and real estate in order to pay the pension of future retirees. These types of funds usually seek low-risk investments. When real estate is the chosen investment, pension funds usually opt for secure assets – those in good condition, well located, already let and so on.
Property company (Foncière) : A real estate company is a company whose business is owning real estate which is let and/or used to maximise the profitability and yield. The core of the business is managing a real estate portfolio. The real estate may be residential, commercial (offices, retail, warehouses, industrial) or operational (hotels, retirement homes, university residences etc.)
R
Real estate investment trust - Organisme de Placement Collectif dédié à l’Immobilier (OPCI) : The OPCI is a new mutual savings scheme dedicated to real estate. OPCIs enjoy a regime that is very similar to the one for securities mutuals, or OPCVM (Organismes de Placement Collectif en Valeurs Mobilières). Two types of OPCIs exist (inspired by the organisation of SICAVs and FCPs) with two different tax regimes.
OPCIs are investment products, at least 60% of which are invested in real estate and 10% in liquidities. They have more flexible tax regimes that are better suited to real estate. OPCIs are controlled by the markets’ watchdog, the AMF and, like SCPIs, the newest form of OPCI must obtain prior approval from the AMF.
OPCIs are also subject to strict rules on the distribution of rental income and capital gains which vary for different forms of OPCI.
Real estate investment trust - Société Civil de Placement Immobilier (SCPI) : Real estate investment companies are collective investment companies whose exclusive purpose is to own and manage a portfolio of assets leased to tenants. At least 90% of the portfolio of an OPCI SCPI investment company must consist of real estate assets. SCPIs sell shares in the buildings that have been acquired to shareholders. SCPIs are not listed on the stock exchange but are financed by savings from the public. These trusts are not subject to company tax. Each shareholder is taxed personally on the revenues received from the trust. Partners in an SCPI will have to decide by 17 April 2012 whether they wish to transform their SCPI into an OPCI or keep the SCPI status.
P
Portfolio (Portefeuille) : The real estate assets owned by an investor with a view to receiving direct revenue or capital gains.
S
Sale on plan - Vente en l’état futur d’achèvement (VEFA) : The sale on plan is a sale concluded before the development is completed. The buyer immediately becomes owner of the land and takes ownership of the building as and when construction advances.
France