The Fund presents an unrivalled investment opportunity with a primary focus on generating consistent income for investors. (For Wholesale Investors Only)
An opportunity to invest in a soon to be completed large format retail centre located in a growing region of Victoria.
This is an educational guide to help investors better understand the property fund landscape in Australia. It is not personal financial advice, nor does it consider individual objectives or circumstances. Rather, its purpose is to explain how different property investment vehicles work and how they can be compared on a like-for-like basis.
InvestmentMarkets enables investors to research and compare a wide range of investment options, including listed A-REITs, unlisted property funds, property trusts, and syndicates, all in one place. Interest in these structures has continued to grow among investors seeking income, diversification, and exposure to commercial property through managed vehicles.
Below we’ll outline the mechanics of property funds, their potential benefits, key risks, and the criteria investors commonly use when comparing them, such as structure, liquidity, fees, gearing, and underlying assets.
Property funds are managed investment vehicles that pool investor capital to acquire, manage, and derive income from property assets. They have become an increasingly popular way for Australian investors to gain exposure to commercial and residential real estate without the complexity, capital requirements, or ongoing management responsibilities of direct property ownership.
What they offer:
Structure options:
Key advantages:
Exposure remains to:
Most Australian property funds operate as Managed Investment Schemes (MIS), a structure regulated by the Australian Securities and Investments Commission (ASIC). Under an MIS, investor capital is pooled and managed by a professional fund manager in accordance with a Product Disclosure Statement (PDS). Rather than owning physical buildings directly, investors hold units in the scheme, which represent a proportional interest in the fund’s underlying assets and income.
Unit ownership determines an investor’s share of distributions, their exposure to the fund’s net asset value (NAV), and, in some cases, voting rights on material matters. Units do not guarantee income or capital returns. Outcomes depend on property performance, tenant activity, market conditions and fund management decisions.
Property funds are typically structured as either open-ended or closed-ended vehicles:
| Structure | Key Features | Typical Vehicles |
| Open-ended | Ongoing applications and periodic redemptions, portfolio can expand or contract | Diversified unlisted property funds |
| Closed-ended | Fixed term (often 5–10 years), no redemptions until end of term | Property syndicates, development funds |
Income within property funds flows from tenants paying rent to the fund. From this gross income, the fund deducts operating expenses, management fees and financing costs. The remaining net income may be distributed to unitholders, usually monthly or quarterly, in proportion to units held. These distributions are not guaranteed and may vary over time.
Properties are typically revalued by independent valuers on a periodic basis, often quarterly or annually, which can affect unit prices in unlisted funds. Actual capital gains are only realised when assets are sold. In closed-ended funds, proceeds are usually returned to investors at the end of the term. Capital growth is market-dependent and not assured.
Funds managed by large Australian commercial property managers such as Centuria, Dexus and Charter Hall are prime examples of how these structures are implemented across listed and unlisted property vehicles.
Property funds may invest across a range of underlying asset types, each with different income drivers, risk characteristics and performance metrics.
Commercial property in general includes multi-tenant buildings. Revenue is driven by lease agreements with businesses and retailers.
Key risks:
Industrial and logistics assets include warehouses, distribution centres, manufacturing facilities and logistics hubs. Demand is often linked to e-commerce growth, supply chain efficiency and last-mile delivery requirements.
These assets may benefit from longer leases and corporate tenants but can face risks such as tenant concentration, geographic exposure and economic sensitivity.
Retail property ranges from regional shopping centres to neighbourhood centres, bulky-goods precincts and strip retail. Anchor tenants such as major supermarkets or department stores often play a critical role in driving foot traffic.
Key risks:
Office property covers CBD towers and suburban offices, often categorised as Premium, A-grade or B-grade. Demand is influenced by employment trends, business confidence and location quality. While high-grade assets may attract long-term corporate tenants, risks include vacancy, leasing incentives and fit-out costs.
Healthcare and medical property includes hospitals, medical centres, aged care facilities and specialist clinics. These assets are often purpose-built and leased on long terms, supported by demographic trends such as an ageing population.
Key risks:
Mixed-use developments combine multiple asset types, such as retail, office and residential, within a single precinct. This diversification can reduce reliance on one income source but increases management complexity and maintenance requirements.
Liquidity varies significantly across property fund structures and is a key consideration for investors:
| Fund Type | Liquidity | Pricing Method | Key Characteristics |
| A-REITs | High | Market-determined, continuous | Trade on the ASX, T+2 settlement, prices can differ from underlying property values |
| Unlisted Funds | Limited | Independent valuations (1–12 months) | Redemptions via windows, may be capped or suspended |
| Syndicates | Illiquid | Fixed issue price, periodic valuations | No exit until asset sale, fixed terms often 5–10 years |
Unlisted fund liquidity depends on cash availability and property sale timelines, which are not as immediate as selling shares. ASIC Regulatory Guide 46 permits withdrawal suspensions during periods of market stress. Importantly, valuation lag in unlisted funds does not eliminate the risk of drawdowns. It reflects slower price adjustment rather than price stability. Syndicates are often particularly concentrated, with cash flows reliant on a single property and tenant profile.
Liquidity matters because it affects exit flexibility, risk tolerance and responsiveness to changing market conditions.
Units can bought and sold in different ways depending on the structure:
| Method | A-REITs | Unlisted Funds | Syndicates |
| Buying | ASX via broker at market price | Direct with manager after PDS review | Initial offer only |
| Pricing | Live market pricing | NAV from periodic valuations | Fixed issue price |
| Selling / Redeeming | Sell on ASX anytime | Redemption windows, notice periods | No redemption until sale |
| Settlement | T+2 | Manager-determined | End of term only |
Unlisted fund redemptions may be delayed during periods of high withdrawal demand, and redemption queues can form. Syndicate exits depend on property sale conditions at the end of the investment term.
Australian investors can access property exposure through several distinct investment vehicles, each with different structures, liquidity profiles and risk drivers. Understanding how these vehicles operate is essential when comparing property investment options.
A-REITs are ASX-listed trusts that own and manage portfolios of income-producing property. They are professionally managed and subject to continuous disclosure, governance standards and market oversight. Sub-sectors include office, retail, industrial, diversified and specialised property such as healthcare, childcare, self-storage and data centres.
A-REITs offer daily liquidity, with units traded on the ASX during market hours and settled on a T+2 basis. Pricing is market-determined and can fluctuate independently of underlying property valuations.
Key risks include equity market volatility, interest rate sensitivity and periods where unit prices diverge from asset values. Because A-REITs trade like shares, short-term sentiment can influence pricing even when property fundamentals are unchanged.
Unlisted property trusts are not traded on an exchange and typically hold institutional-grade assets such as business parks, industrial estates, neighbourhood shopping centres or healthcare precincts. These trusts may be structured as open-ended or closed-ended vehicles.
Units are priced using periodic independent property valuations, often quarterly or annually. Liquidity is limited, with redemptions available only through scheduled windows and subject to cash availability. Under ASIC Regulatory Guide 46, withdrawals may be suspended during periods of market stress.
Key risks include property market conditions, tenant performance, leverage levels and liquidity constraints. Valuation lag can delay price movements but does not remove underlying market risk.
Property syndicates invest in a single, identified property rather than a diversified portfolio. They are typically closed-ended, with fixed investment terms of five to ten years and no ability to exit until the asset is sold.
Income and capital outcomes depend on the performance of that specific property and its key tenant or tenants. There is no secondary market, making liquidity very low.
Key risks include tenant concentration, lease expiry risk, local market conditions and asset-specific issues. While cash flows may be predictable when a long-term lease is in place, diversification benefits are limited.
Property development funds finance construction, redevelopment or land subdivision projects rather than stabilised, income-producing assets. These vehicles are usually closed-ended and focused primarily on capital growth, with income often irregular or absent during construction phases.
Key risks include cost overruns, planning and approval delays, construction risks, market timing and typically higher gearing. Returns are closely linked to project execution and end-sale conditions.
Property securities funds invest in listed property companies and A-REITs rather than holding physical property directly. They offer high liquidity, daily pricing and diversification across multiple listed issuers and property sectors.
Key risks include interest rate movements, equity market volatility and correlation with broader share markets. Performance may differ materially from direct property returns.
Most property funds are available only to wholesale or sophisticated investors under Corporations Act thresholds.
According to Moneysmart, wholesale investors require ‘a certificate from a qualified accountant certifying they have a prescribed net asset or gross income level. This gives them an exemption under the Corporations Act 2001. That means they can buy financial products without a regulated disclosure document such as a prospectus or product disclosure statement. A person holding a certificate is a: ‘sophisticated investor’ for the purposes of Chapter 6D (if offered debt or shares), or a ‘wholesale client’ for the purposes of Chapter 7 (if offered a financial product, other than insurance, superannuation or a retirement savings account product or service) and the financial product is not used in connection with a business.’
Wholesale funds usually require larger minimum investments, provide less frequent disclosure and may employ higher leverage. Risk levels are generally elevated, reflecting both strategy and structure.
Direct property ownership involves purchasing and managing physical real estate.
Compared with fund-based investing, it typically requires larger capital commitments, involves significant upfront and ongoing costs, offers limited liquidity and provides little diversification unless multiple properties are held.
(This comparison is included solely to differentiate direct ownership from fund-based property investment structures.)
Property investment funds typically aim to generate income from rent paid by tenants across their underlying properties. After operating expenses, management fees and financing costs are deducted, net income may be distributed to investors. ASIC explains that property schemes ‘generally earn income from rent paid by tenants of the properties owned by the scheme.’
Income visibility is commonly assessed using WALE (Weighted Average Lease Expiry), while occupancy rates remain critical, as vacancies directly reduce cash flow. Income characteristics vary by sector, with industrial assets often featuring longer lease terms, retail income linked to consumer spending, and office demand influenced by employment conditions.
Income streams are not guaranteed and may fluctuate.
Property funds may provide capital growth if the value of their underlying assets increases over time.
Key drivers can include location quality, supply and demand dynamics, population growth, infrastructure investment and tenant demand. The Property Council of Australia notes that commercial property performance is influenced by ‘rental growth, capitalisation rates and investor demand.’
In unlisted structures, changes in valuations are reflected through periodic independent valuations, while realised gains typically occur when assets are sold. Capital growth is market-dependent and not assured.
By pooling investor capital, property funds can provide exposure to large-scale assets such as logistics estates, healthcare precincts, office towers and major retail centres. The ASX notes that A-REITs enable investors to access ‘large-scale commercial property assets that would otherwise be difficult to access directly.’
This structure allows investors to participate in assets that typically require significant capital and specialist management.
Liquidity varies widely across property investment vehicles. A-REITs offer daily liquidity through ASX trading, while unlisted property funds generally provide limited liquidity via scheduled redemption windows.
ASIC cautions that for unlisted schemes, ‘you may not be able to get your money out when you want,’ and withdrawals may be suspended during periods of market stress.’
Property syndicates are typically illiquid until the end of the investment term.
Property funds are overseen by professional managers responsible for acquisitions, leasing strategy, tenant relationships, maintenance and financing.
The ASX notes that REIT managers are responsible for ‘managing the property portfolio and tenant relationships on behalf of investors.’
This removes the day-to-day operational responsibilities associated with direct property ownership.
A single property fund may invest across multiple sectors and regions, such as industrial, retail, office and healthcare. The Reserve Bank of Australia highlights that while diversification can reduce reliance on individual assets, ‘commercial property remains sensitive to economic conditions.’
Diversification can reduce concentration risk but does not eliminate risk entirely.
Property investment funds are influenced by broader economic conditions.
During economic downturns, reduced business activity and consumer confidence can lead to lower occupancy, weaker rental growth and downward pressure on valuations. The Reserve Bank of Australia notes that commercial property performance is closely linked to ‘economic activity, employment conditions and financing costs.’
Different property sectors may respond differently to changes in GDP growth, interest rates and business investment. Outcomes depend on prevailing economic conditions and are not predictable.
Liquidity varies significantly across property investment structures.
ASIC cautions that for unlisted property schemes, ‘you may not be able to get your money out when you want,’ and withdrawals may be limited, deferred or suspended during periods of market stress.
Property syndicates are typically closed-ended, with no exit until the underlying asset is sold. While A-REITs offer daily liquidity on the ASX, their prices can fluctuate materially in response to market sentiment.
Unlisted property funds rely on periodic independent valuations, which means unit prices may lag real-time market movements. This can create an appearance of stability even when underlying property values are changing.
By contrast, A-REIT prices adjust immediately to market conditions. Valuations are influenced by rental income, comparable sales, capitalisation rates and assumptions made by independent valuers.
Rental income depends on tenant occupancy and lease terms.
WALE provides insight into re-leasing risk, with shorter lease profiles generally increasing exposure to vacancy.
Single-tenant properties may experience a complete loss of income if a tenant vacates, while multi-tenant assets spread risk but involve greater leasing complexity.
Office and retail assets can be more sensitive to economic conditions, while industrial assets often feature longer leases but may take longer to re-lease if vacancies arise.
Interest rates influence borrowing costs, property valuations and investor demand. The RBA notes that rising interest rates can place pressure on leveraged property investments by increasing financing costs and affecting asset values.
Gearing can magnify both gains and losses, and refinancing risk may arise when debt facilities mature.
Property development funds face additional risks, including construction delays, cost overruns, labour shortages, planning approvals and market timing challenges. Outcomes are typically less predictable than for stabilised income-producing assets.
Funds concentrated in a single sector, location or asset may be more exposed to sector-specific downturns.
For example, retail-focused funds are influenced by consumer spending trends, while office-only portfolios are sensitive to employment cycles. Concentration can increase volatility and dependency on specific market drivers.
A-REITs are bought and sold on the ASX through a brokerage account. Investors can place market or limit orders, with brokerage fees varying by provider. Trades typically settle on a T+2 basis and holdings are registered via CHESS under a Holder Identification Number (HIN). The ASX explains that listed property trusts ‘are traded like shares and subject to market pricing.’
While this structure offers liquidity and transparency, prices fluctuate with market sentiment. Brokers execute trades but do not provide recommendations unless separately licensed to do so.
Unlisted property funds are typically accessed directly via the fund manager. Investors must review a Product Disclosure Statement (PDS) and complete AML/CTF identity checks, such as providing photo identification and address verification.
Moneysmart notes that unlisted property schemes ‘have specific rules about when you can withdraw your money.’
Minimum investments commonly range from $5,000 to $50,000 or more.
Unit prices are based on periodic valuations rather than daily market movements, and lock-in or redemption rules apply.
Property funds can be held within SMSFs provided they align with the fund’s documented investment strategy. Liquidity is particularly important, especially where pension payments are required. The ATO states that trustees must ensure investments are ‘consistent with the fund’s investment strategy and its ability to pay benefits.’
SMSFs must also maintain detailed records, including purchase documents, financial statements, valuations and audit evidence.
Many retail and industry super funds provide indirect exposure to property via member-choice options. These may include A-REIT funds, property securities funds, unlisted property allocations or diversified options. Fees are typically bundled, and switching or liquidity depends on the super fund’s rules. Members do not hold units directly.
Some platforms offer fractional access to property funds or automated portfolios with lower minimum investments. While these structures can increase accessibility, liquidity, pricing transparency and valuation methods depend on the platform’s design.
Moneysmart cautions that investors should understand ‘how and when you can exit’ and the operational risks involved. Outcomes depend on structure and governance.
Property funds charge a range of fees that can affect net returns. These commonly include the Management Expense Ratio (MER), which tends to be lower for A-REITs and higher for unlisted property funds, as well as transaction costs such as acquisition expenses, brokerage, legal fees and buy–sell spreads. Some funds may also charge performance fees if returns exceed stated benchmarks.
Moneysmart notes that ‘fees and costs reduce your investment returns’ and should be reviewed carefully.
The impact of costs depends on fund structure, strategy and holding period. No single fee level is inherently good or bad.
Rental income depends on tenant occupancy and lease strength.
WALE (Weighted Average Lease Expiry) provides insight into how long tenants are contractually committed, while tenant diversity can reduce reliance on any single occupier.
Sector characteristics vary, with industrial assets often associated with longer leases, retail linked to consumer spending and office demand influenced by employment conditions.
Larger funds may offer broader diversification across assets and regions, although size does not guarantee performance. Historical returns provide context for a manager’s experience but are not predictive.
As Moneysmart emphasises, ‘past performance is not a reliable indicator of future performance.’
Track record is best viewed as background information rather than an outcome forecast.
Gearing, commonly expressed as Loan-to-Value Ratio (LVR), measures the proportion of debt relative to property value.
Higher gearing can magnify both gains and losses and increases sensitivity to interest rate changes, while lower gearing may reduce risk but also limit return potential.
There is no universally optimal gearing level, although the RBA notes that leverage can amplify property market cycles.
Property funds may distribute income monthly or quarterly.
Distributions can include rental income, realised capital gains and tax-deferred components, which may reduce an investor’s CGT cost base.
The ATO notes that tax outcomes depend on individual circumstances and distribution composition.
A-REIT prices are updated daily through market trading, while unlisted funds rely on periodic independent valuations, often monthly, quarterly or annually. Less frequent valuations can smooth short-term movements but may lag market conditions.
Liquidity ranges from continuous (A-REITs) to highly restricted (unlisted funds and syndicates).
ASIC cautions that withdrawal rights may be limited, queued or suspended in unlisted schemes during stressed periods.
Fund managers differ in governance standards, reporting quality and transparency.
Key considerations include disclosure of fees, valuation methodology, gearing, tenant exposures and liquidity policies.
As ASIC notes, clear disclosure supports informed decision-making.
There are a number of important differences between investing in property funds and direct property:
| Factor | Property Funds | Direct Property |
| Capital required | Lower entry points, often from hundreds to thousands of dollars depending on structure and minimums | Large upfront capital including deposit, stamp duty, legal fees, inspections and typically a mortgage |
| Liquidity | Varies by structure: A-REITs trade daily on the ASX, unlisted funds offer limited or periodic redemptions, syndicates are generally illiquid until sale | Sales can take months, with high transaction costs and limited ability to exit quickly |
| Diversification | May provide exposure to multiple properties, sectors and regions within a single investment | Typically concentrated in a single property and location unless multiple properties are purchased |
| Costs | Management fees, MERs, potential performance fees, transaction and financing costs embedded within the fund | Stamp duty, legal costs, loan interest, land tax, strata fees, insurance, repairs, maintenance and council rates, which can be variable and unpredictable |
| Management responsibility | Professional managers handle acquisitions, leasing, tenant relationships, maintenance and compliance | Owner manages tenants, vacancies, repairs and compliance directly or via a property manager |
| Risk concentration | Risk may be spread across assets and tenants, depending on fund structure and diversification | High exposure to specific tenant, location, property condition and local market dynamics |
| Income stability | Rental income typically sourced from multiple tenants and properties; outcomes vary by sector, occupancy and WALE | Often reliant on a single tenant; vacancy can eliminate income until re-leased |
| Valuation method | A-REITs priced daily by the market; unlisted funds rely on periodic independent valuations | Value realised primarily at sale; interim values are not routinely updated |
| Gearing exposure | Gearing applied at fund level and managed by the fund manager | Gearing applied at individual level via a mortgage, with direct exposure to interest rate changes |
| Time and complexity | Passive ownership structure with reporting provided by the fund | Active involvement required, including ongoing administration and decision-making |
| Regulatory framework | Managed investment schemes regulated by ASIC, with disclosure obligations | Governed by property law, tenancy regulation and lending requirements |
Distributions from property funds typically include assessable income derived from rent, interest and other property-related earnings. This income is generally taxable in the year it is received, with outcomes dependent on individual circumstances. Distributions may also include tax-deferred components, capital gains or foreign income.
The ATO explains that managed fund distributions ‘can include different types of income, each with its own tax treatment.’
Investors usually receive an Annual Member Statement (AMMA) detailing the composition of distributions for tax reporting.
CGT may apply when units in a property fund are sold for a profit.
According to the ATO, for individuals and trusts, a CGT discount may apply where units have been held for more than 12 months. The cost base generally includes the purchase price, brokerage and certain reinvested distributions. In unlisted funds, unit prices may change due to periodic property valuations rather than daily market movements.
According to the ATO, property funds held within an SMSF are typically taxed at 15% in accumulation phase and may be tax-free in pension phase, subject to superannuation rules. CGT discount rules differ for SMSFs, and investments must align with the fund’s documented investment strategy.
The ATO notes that trustees must ensure investments support the fund’s ability to pay benefits.
Liquidity planning is particularly important where pension payments are required.
Investors are required to retain records of unit purchases and sales, distribution statements, annual tax statements and reinvested distributions. The ATO generally requires records to be kept for at least five years.
Property funds are managed investment schemes regulated by ASIC. A Product Disclosure Statement (PDS) is required and must outline risks, fees, liquidity and strategy.
For unlisted schemes, ASIC Regulatory Guide 46 sets disclosure expectations around liquidity and valuation practices.
Disclaimer: Tax outcomes depend on individual circumstances. Consider speaking with a licensed tax or financial professional.
Some property funds aim to prioritise rental income from established assets with longer lease profiles and stable tenant bases.
Examples include industrial distribution facilities, office buildings leased to government or corporate tenants, and supermarket-anchored retail centres.
Income stability depends on occupancy levels, tenant creditworthiness and prevailing market conditions.
The ASX notes that rental income from property trusts is influenced by ‘lease terms, tenant demand and economic conditions.’
Income outcomes are not guaranteed and may vary over time.
Core property strategies generally focus on high-quality, well-located assets such as CBD office towers, major industrial estates and longstanding retail centres. These assets are often characterised by established leasing profiles and institutional ownership.
The Property Council of Australia observes that prime assets tend to attract consistent investor demand, although values remain influenced by broader market conditions.
Some investors use a blend of listed A-REITs and unlisted property funds to balance liquidity and pricing characteristics. A-REITs offer daily market pricing and liquidity, while unlisted funds typically rely on periodic valuations. This structure is commonly observed in diversified portfolios but does not represent a recommendation.
Value-add strategies may involve repositioning assets through refurbishment, re-leasing vacant space, redevelopment or environmental upgrades. These approaches generally carry higher risk, longer timelines and greater sensitivity to tenant demand and market conditions.
Some funds adjust sector exposure in response to structural trends, such as increased demand for logistics, healthcare or data infrastructure.
ESG-focused strategies may emphasise energy efficiency, green building standards and social infrastructure.
The Green Building Council of Australia notes that ratings such as Green Star and NABERS are used to assess sustainability outcomes.
Approaches and criteria vary by fund and do not guarantee outcomes.
Higher distribution yields may reflect underlying risks such as shorter lease terms, higher vacancy rates, secondary locations, single-tenant exposure or higher gearing.
Moneysmart cautions that higher returns often come with higher risk and that yield alone does not indicate sustainability.
Liquidity varies significantly across property fund structures.
ASIC notes that in unlisted property schemes ‘you may not be able to get your money out when you want,’ and withdrawals can be limited or suspended.
Syndicates are typically closed-ended, with capital locked in for the full investment term.
Many property funds use debt to acquire assets.
The Reserve Bank of Australia highlights that leverage can amplify both gains and losses and increase sensitivity to interest rate changes.
Funds concentrated in a single sector or asset can be more exposed to tenant, location or sector-specific risks. Diversification can influence risk outcomes but does not eliminate risk entirely.
Tax-deferred components reduce an investor’s CGT cost base rather than representing tax-free income.
The ATO explains that this can result in higher capital gains tax when units are sold.
Ongoing disclosures such as quarterly updates, annual reports and valuation summaries provide important context.
ASIC emphasises the importance of reviewing fund information to understand risks and changes.
A-REIT prices move with market sentiment, while underlying property values typically change more gradually.
Market volatility does not necessarily indicate immediate changes in property fundamentals.
Industrial and logistics property has attracted increased attention in recent years, supported by e-commerce growth, supply chain reconfiguration and demand for last-mile delivery facilities.
The Property Council of Australia notes that industrial assets have been influenced by ‘structural changes in logistics and distribution networks.’
Some property funds have adjusted portfolio exposures in response to these conditions, although outcomes remain market-dependent.
Environmental, social and governance considerations are increasingly incorporated into property investment strategies. This can include assets with Green Star or NABERS ratings, energy-efficiency upgrades and sustainability reporting.
The Green Building Council of Australia states that sustainability ratings are used to ‘measure and verify building performance.’
Alignment with tenant requirements and corporate sustainability goals varies by asset and fund.
Property managers are increasingly using technology such as smart building sensors, energy monitoring systems, predictive maintenance tools and digital tenant platforms.
According to the ASX, technology adoption can influence ‘operational efficiency and tenant engagement’ in listed property vehicles.
Benefits depend on implementation and asset type.
Large Australian superannuation funds continue to allocate capital to property, particularly unlisted commercial funds.
The Reserve Bank of Australia notes that superannuation funds are significant long-term participants in commercial property markets in general. This reflects structural allocation preferences.
Digital platforms offering fractional property exposure and tokenised structures have emerged, though models differ in liquidity and regulatory oversight. At the same time, alternative property sectors such as healthcare, childcare, data centres, cold storage and build-to-rent residential have attracted attention for diversification purposes.
Moneysmart cautions that newer structures require careful understanding of how they operate.
These developments represent evolving market features rather than guaranteed outcomes.
Yes. All investments carry risk. Property funds can decrease in value due to market conditions, vacancy, economic shifts, interest rates, or sector performance. Returns are not guaranteed.
Typical fees include management fees, MERs (Management Expense Ratios), performance fees, buy/sell spreads, and property-related costs. Fees vary significantly by fund structure and manager.
No. Returns from property funds are not guaranteed and depend on rental income, asset values, tenant performance, and economic conditions.
SMSFs may invest in property funds if permitted by their investment strategy. Suitability depends on the fund's liquidity, the SMSF's objectives, and trustee obligations.
A-REITs are valued continuously via market pricing. Unlisted funds conduct independent valuations monthly, quarterly, or annually. Valuation timing affects how quickly prices reflect market changes.
A-REITs offer daily liquidity via the ASX with market-driven pricing. Unlisted funds have periodic redemption windows, valuation-based pricing, and more restricted liquidity. Neither is inherently better.
Gearing is borrowing used by a fund to acquire properties. Higher gearing increases sensitivity to market conditions, magnifying potential gains and losses.
Distributions generally come from rental income and may include tax-deferred components. Payment cycles are typically monthly or quarterly. Distribution amounts vary based on tenancy, expenses, and market conditions.
Vacancies can temporarily reduce rental income until new tenants are secured. Impact on distributions depends on WALE, tenant mix, and fund structure.
Property investment funds provide Australian investors with a structured way to gain exposure to commercial real estate without directly owning property. Depending on their structure, property funds can offer access to professionally managed portfolios, income through rental distributions, and exposure to assets such as industrial estates, office buildings, healthcare facilities and retail centres. By pooling capital, these vehicles allow investors to participate in institutional-grade properties and diversify across sectors, tenants and locations that would otherwise be difficult to access individually.
At the same time, property funds are not without risk. Performance is influenced by property market conditions, tenant demand, lease structures and broader economic factors such as interest rates and employment trends. Liquidity can vary significantly, with A-REITs trading daily on the ASX while unlisted funds and syndicates may have limited or restricted withdrawal options. Outcomes are also affected by gearing levels, valuation timing and tenant stability. Importantly, income and capital returns are not guaranteed, and values can move both up and down over time.
Because of these differences, no single property investment structure suits all investors. Each type of property fund has its own time horizon, risk profile and liquidity characteristics. Listed vehicles may offer flexibility and price transparency, while unlisted structures may behave differently due to valuation cycles and withdrawal rules. Syndicates and development funds typically involve longer commitments and higher uncertainty.
Whether property investments are appropriate depends on individual goals, risk tolerance, investment timeframe and liquidity needs. Understanding how each structure operates, what drives returns, and where risks can arise is essential before considering any property-related investment as part of a broader portfolio.
