Recent acquisitions, including a French SCPI fund’s £28.6 million purchase of the Waitrose and John Lewis in Ipswich, suggests that SCPI capital not only remains active, but is diversifying across sectors and regions.
However, with rising energy prices and wider geopolitical tensions adding fresh uncertainty to 2026’s economic outlook, can SCPIs sustain the pace of acquisitions seen in 2025? Or will predicted high interest rates curb the appetite?
Can SCPIs stand the uncertainty?
SCPIs, which enable individuals to invest in a property portfolio without directly owning or managing the assets, are built to feed on continuous capital raised by a broad range of private investors who can subscribe on a monthly or quarterly basis. As they do not rely heavily on debt capital and have a constant inflow of funds, they can remain active particularly during periods of uncertainty.
Many French-related managers and SCPIs, including La Francaise, have used these resilient funds as an opportunity to diversify their portfolios by moving away from domestic-focused properties and exploring opportunities overseas. Cities such as Glasgow and Aberdeen have majorly been impacted by this trend due to their competitive operating costs compared to other major UK and EU cities. Aberdeen especially has seen recent acquisitions from these funds range from £7 million to £15 million.
This shift in focus can be attributed to the fact that prime real estate assets, such as regional offices and retail parks, can be acquired at more competitive yields in markets such as the UK and Ireland compared with France. This trend has continued to grow over the years, with domestic French acquisitions accounting for only 20% of all SCPI purchases in 2025, compared with 80% in 2015.
But with geopolitical tensions growing and oil prices rising rapidly, this trend may slow or even force buyers into becoming more strategic with their cross-border investments and targeting countries that are more durable when it comes to economic turmoil.
Despite warnings that renewed energy shocks and geopolitical tensions could push interest rates higher again, the Bank of England has so far kept rates at 3.75%. At the same time, the UK economy continues to outperform France and Germany in GDP growth. While uncertainty persists, many investors still expect rates to decline over the coming years, a trend that could provide renewed momentum for the real estate market.
For French SCPIs, this optimism - combined with faster transaction processes and a deep pool of investment opportunities - has reinforced the UK’s position as one of the most appealing destinations for capital. By Q1 2025, almost one-third of all SCPI investment had been allocated to the UK market.
2026: Momentum with caveats
At the moment, SCPIs appear well positioned to maintain the strong momentum seen throughout 2025, supported by their flexible structure and ability to move quickly in uncertain markets. However, the very conditions that created opportunities for SCPIs over the past year may not last forever.
If inflation eases, interest rates begin to fall and confidence returns to the wider real estate market, competition for high-quality assets is likely to increase significantly. The UK government is already actively seeking to attract greater levels of foreign capital into the country, particularly from large overseas pension and infrastructure investors, reinforcing the perception of the UK as a long-term investment destination.
While that renewed confidence would be positive for the wider market, it could reduce the number of undervalued or opportunistic deals that SCPIs have been able to capitalise on throughout 2025. As more investors re-enter the market, pricing pressure is likely to intensify. In many ways, for SCPIs to continue performing at the pace seen over the last year, they may require the road ahead to remain somewhat uncertain.
This article was co‑authored with David O’Neill, Trainee Solicitor at MFMac.
This article was first published in Property Week.
