- Switzer Report - https://switzersuperreport.com.au -

Product Road Test – the Centuria Diversified Property Fund

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).