Very few of us have the tens of millions of dollars needed to directly acquire commercial property. So, as private investors, we usually approach this by investing indirectly through a managed fund where the monies of the many are pooled.
The two most common structures are listed property trusts (also called A-REITs or Australian Real Estate Investment Trusts) and unlisted property funds. Listed property trusts are typically multi-asset, more diversified, can be multi-sector (eg. office or retail or industrial), larger and relatively liquid. The liquidity comes from being listed on the ASX with a diversified investor mix. This carries its own price, resulting in lower distribution yields (4.5% - 6.0% pa).
Unlisted property funds tend to be single asset, smaller and close-ended. They often have a fixed term of between 5 and 7 years, after which the manager tries to sell the asset and wind-up the fund. They are illiquid during the term. Investors are compensated in part for the lack of liquidity and concentrated exposure through the payment of higher distributions (5.5% - 8.0% pa).