Investing in property doesn’t have to mean buying a home or managing tenants. Australia’s listed and unlisted property funds offer a simpler way to invest in real estate.
On the listed side, A-REITs (Australian Real Estate Investment Trusts) represent a market worth more than $100 billion – the largest outside the U.S. Unlisted funds are also highly regarded, known for their scale and stability, and are trusted by both everyday investors and large institutions.
To put that in perspective:
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Together, these funds provide investors with:
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For many investors, property funds are a powerful, low-maintenance way to share in Australia’s property market growth.
Find and compare a comprehensive range of Australian property funds, from liquid A-REITs to specialised unlisted commercial property investments.
When analysing and ranking property funds, investors should adopt a holistic approach that balances both performance and risk considerations.Â
A good starting point is to review total fund returns (capital growth + income) over 1, 3, and 5 years, to gain insight into how the available funds have performed across different market cycles.Â
Alongside this, distribution yields should be evaluated to understand the consistency and competitiveness of fund income returns relative to peers.Â
Equally important is an assessment of fund risk, including the level of gearing (how much debt the fund carries), the quality and diversification of its underlying assets, and the liquidity options, as these factors materially affect fund stability and downside protection.Â
Finally, investors should not overlook the Management Expense Ratio (MER), which includes management fees and operating expenses, as higher fees can significantly erode returns over time, especially in lower-growth environments.Â
Comparing funds on these factors allows investors to rank them based on their investment goals.
The analysis should also consider qualitative factors such as the manager’s track record, transparency, and alignment with the investor’s broader portfolio objectives.
For example, here’s a comparison of three property funds based on the above-mentioned criteria:
| Fund | Total Returns | Risk Profile | MER (Mgmt Expense Ratio) | Highlights |
|---|---|---|---|---|
| Pengana High Conviction Property Securities Fund | • 1 yr: 12.88% • 3 yr: 13.78% p.a. • 5 yr: 12.34% p.a. | Concentrated portfolio (10–20 stocks), daily liquidity, ESG-integrated, value-based strategy | 0.70% p.a. (Management Fee) + Performance Fee (15% of benchmark outperformance)  Total cost 0.71% p.a.  | • Strong historical returns with a focused, ESG-guided, high-conviction strategy. • Competitive fee structure. |
| Resolution Capital Global Property Securities Fund | • 1 yr: 0.46% • 3 yr: –1.05% p.a. • 5 yr: 2.83% p.a. | Globally diversified REITs and property securities; listed and liquid; moderate volatility; currency and sector risk | 0.80% p.a. (Management Fee) + Performance Fee (20% of outperformance).  Total cost 0.89% p.a.  | • Excellent liquidity. • Global diversification. • Quarterly income streams. |
| Resolution Capital Real Assets Fund | • 1 yr: 13.28% • 3 yr: 12.70% p.a. • 5 yr: 13.38% p.a. | Diversified across A-REITs, listed infrastructure, and global property assets; moderate liquidity and inflation-protected cash flows | 0.65% p.a. (Management Fee) + Performance Fee (20% of outperformance)  Total cost 0.79% p.a. | • Robust performance across all timeframes • Anchored by a diversified mix of Australian property and infrastructure, complemented by international assets. |
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Australian commercial real estate has long been regarded as a cornerstone of wealth creation. It’s an asset class prized for its stable rental income generation, capital preservation, and capital growth potential through market cycles. As a result, for many institutional investors, unlisted and listed property funds form a core part of their diversified portfolios - as shown below.
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Yet, for individual investors, direct access to commercial property can be more challenging to achieve. Commercial properties often carry price tags in the tens or hundreds of millions of dollars, demand extensive due diligence, and require active management of leases, tenants, and maintenance. Without deep expertise and similarly deep capital reserves, most private investors are effectively locked out of this market, unable to harness the scale and diversification benefits it provides.
So how can everyday investors participate in this resilient, income-generating asset class without the burden of direct ownership?
Property funds provide the answer.Â
By pooling capital from multiple investors, property funds acquire and manage portfolios of institutional-grade real estate, offering proportional ownership at a fraction of the direct cost. This structure removes the operational hassle, delivers regular income distributions, and provides diversified exposure to commercial property.Â
As Westbridge Funds Management puts it: ‘commercial property funds provide access to large-scale, investment-grade assets that are often out of reach for individual investors.’Â
David Harrison, Managing Director, Charter Hall concurs and highlights the value of co-investment in property funds:Â
‘Business models where a majority of the balance sheet is co-invested with investors has been a major dynamic change. And ensuring development profits stay with fund investors, rather than being captured by the manager, has reinforced long-term partnerships.’
A property fund is a managed investment scheme in which money from multiple investors is pooled to acquire and manage a diversified portfolio of real estate assets. A professional fund manager oversees the property acquisition, tenant leasing, maintenance, and long-term strategy on behalf of investors.Â
According to Australian Unity:Â
‘Property funds provide access to a portfolio of real estate assets that would otherwise be difficult for individual investors to purchase directly.’Â
Centuria notes that unlisted property funds:Â
‘enable investors to gain exposure to commercial real estate with a lower initial capital outlay while receiving regular income distributions.’Â
In summary, property funds offer individuals institutional-grade exposure, diversification across property sectors, and income generation potential without the high cost and complexity of direct ownership.
📌Tip: Property funds combine scale, diversification, and professional oversight with the potential for stable income and tax advantages, making them an accessible alternative to direct property ownership.
Prior to investing in property funds, it’s important to understand the differences between listed and unlisted property funds:
| Feature | Listed Property Funds (A-REITs) | Unlisted Property Funds |
|---|---|---|
| Liquidity | Highly liquid: units trade daily on the ASX | Illiquid: limited redemptions, typically locked-in for 5–7 years |
| Volatility | Higher: unit prices move daily with market sentiment | Lower: valuations are based on periodic independent appraisals, less short-term fluctuations |
| Minimum Investment | Low: investors can start with a few hundred dollars via ASX | Higher: often $10,000 to $50,000 minimum entry |
| Typical Assets | Portfolios of office, retail, industrial, healthcare, childcare centres, listed globally or domestically | Direct holdings in commercial, retail, industrial, and specialist assets (e.g. logistics hubs, medical centres) |
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Australian Real Estate Investment Trusts (A-REITs) are listed property funds traded on the Australian Securities Exchange (ASX). They are the most liquid way to invest in property funds because their units can be bought and sold daily, just like regular shares. A-REITs typically hold large, diversified portfolios of commercial properties, including office towers, shopping centres, industrial estates, logistics hubs, and healthcare facilities.
Key Characteristics:
It’s noteworthy that there are a selection of property security funds available which invest in diversified portfolios of REITs. The advantage of these funds is that they generally provide smoother long-term returns than individual REITs due to being more diversified across various sectors and geographies.
Examples:
Unlisted property funds are investment vehicles that operate privately and are not traded on a public stock exchange. Unlike A-REITs, which are highly liquid and priced daily on the ASX, unlisted funds provide investors direct exposure to the underlying property assets without the short-term price swings of equity markets. This makes them attractive to those seeking income stability and lower volatility, though the trade-off is reduced liquidity.
Key Characteristics:
Examples:
Property funds are also categorised by their target investor:
Prior to investing in property funds, it’s important that investors understand the key benefits and risks:
✅ Professional Management
Property funds provide investors with access to skilled managers who handle all aspects of the investment: property acquisition process, due diligence, tenant negotiations, property maintenance, and long-term strategic planning.Â
According to Moneysmart (ASIC), property funds: ‘are usually run by professional managers who pool investors’ money to buy and manage a portfolio of properties.’ This removes the complexity and workload associated with direct ownership.
✅ Diversification
By pooling capital, investors gain instant diversification across multiple assets, sectors (office, retail, industrial, healthcare), and geographic regions. This reduces the concentration risk of relying on a single property and helps stabilise returns.Â
As Australian Unity notes: property funds ‘spread investor capital across a portfolio, reducing the risks linked to individual tenants or buildings.’Â
Diversification is an important investment principle when building a portfolio including property funds.
✅ Access to Premium Assets
Unlisted property funds provide entry to institutional-grade commercial assets such as logistics centres, office towers, and shopping precincts, assets normally only available to superannuation funds or large institutions.Â
As Centuria explains: unlisted funds allow ‘everyday investors to co-invest in large-scale commercial real estate usually out of reach for individuals.’
✅ Regular Income
Most funds distribute rental income on a monthly or quarterly basis, providing investors with passive, reliable cash flow. This is particularly attractive for income-focused investors such as retirees.
✅ Tax Efficiency
Many unlisted funds offer tax-deferred income, thanks to depreciation deductions on their buildings and assets. This means a portion of distributions may be sheltered from immediate taxation, enhancing the after-tax returns.
Key Risks of Property Fund Investing
🚫 Liquidity Risk
Liquidity is the primary risk for most unlisted property funds, as investors may be unable to withdraw capital quickly. Redemption windows are often annual or aligned with a fund’s term, and in times of market stress, withdrawals may be suspended to protect the remaining investors.Â
As Adrian Harrington, Head of Capital & Product Development at Charter Hall, warns: ‘It is critical that any investor in the real estate sector understands and appreciates the illiquid nature of the underlying asset class.’
🚫 Market Risk
Property valuations are directly tied to broader market conditions. Rising interest rates, shifts in tenant demand, or weakening economic growth can reduce rental income and lower asset values. Both listed and unlisted property funds are subject to market forces that can negatively affect capital returns.
🚫 Gearing (Leverage) Risk
Most property funds use debt to help acquire assets, which can magnify both their capital gains and losses. If property values fall or financing costs rise, geared funds may face reduced income or capital losses. Momentum Wealth notes that while leverage can enhance returns, it introduces heightened risk that investors should carefully consider.
🚫 Management Risk
Fund performance is heavily reliant on the expertise of the fund manager. Poor acquisition decisions, mismanagement of tenants, or weak asset allocation can impair returns. Hence, the importance of competent professional management in navigating complex markets and maximising investor outcomes can’t be overstated.
Ready to invest in property funds? Investing successfully requires thorough due diligence.Â
Use this checklist to help find an appropriate property fund:
✅ Align with Your Goals
The first question is: does this fund prioritise income, capital growth, or a blend? Ensure its investment strategy matches your personal objectives.Â
As Perpetual notes: ‘clear articulation of investment objectives is critical to achieving desired outcomes.’
Also, check that the fund’s minimum investment amount aligns with your objectives. As shown below, A-REITs have a much lower minimum than unlisted property funds.
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✅ Understand the Strategy
Is the fund adopting a conservative buy-and-hold approach, or a higher-risk value-add or development strategy?Â
Your tolerance for risk should align with the fund’s approach.
✅ Scrutinise the Fee Structure
Understand all costs, including management fees, performance fees, and potential exit fees. Tax-deferred distributions can enhance after-tax returns, but fees and costs can erode total performance if not carefully managed.
✅ Assess the Fund Manager
Investigate the manager’s track record and ability to perform across market cycles.Â
Pearler highlights that fund manager quality is crucial: ‘manager track record is a major determinant of performance, especially in volatile markets.’
✅ Review the Fund’s Property Portfolio
Look at the fund’s asset quality, tenant strength (e.g. government or blue-chip corporates), geographic spread, and WALE (Weighted Average Lease Expiry).Â
FRP Capital stresses that portfolio composition is key when weighing listed vs unlisted funds.
✅ Check the Gearing Level
Examine the fund’s total debt versus its assets. Higher gearing can amplify returns but also raises risk during downturns.
✅ Read the PDS or IM Carefully
The PDS (Product Disclosure Statement) or IM (Information Memorandum) contains the fund’s rules, risks, and regulatory compliance disclosures.Â
As FRP Capital notes: ‘unlisted property funds must detail deferred income structures and liquidity terms clearly in offer documents.’
📌 Expert Insight:Â
‘People are discovering unlisted funds a bit more… the returns [on unlisted trusts] are less correlated to the share market so unit prices are less volatile and reflect undervalued assets.’Â
Hamish Wehl, Head of Funds Management at Cromwell Property Group
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To understand the long-term impact of your fund choices, consider this example.Â
Sarah has a long-term savings goal and is aiming to invest $100,000 for 10 years. She is considering two property funds:
Both funds expect to generate the same average gross return of 8% p.a. before fees. The main difference lies their respective fee structures.
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Here’s how those two funds are expected to perform after fees during the investment period.
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| Fund | Gross Return (p.a.) | Fees (MER) | Net Return (p.a.) | Final Value After 10 Years | Wealth Difference |
|---|---|---|---|---|---|
| Fund A – Low-Cost A-REIT | 8.0% | 0.50% | 7.5% | $206,103 | — |
| Fund B – Unlisted Fund | 8.0% | 1.25% | 6.75% | $191,010 | $15,093 less |
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Note: This example is for illustrative purposes and assumes compounding returns.
📌 Key Takeaway: What seems like a small difference in annual fees (0.75%) can result in over $15,000 of lost returns on a $100,000 investment over a decade. Hence, scrutinising fund fee structures during your due diligence is not just a checkbox exercise. It’s critical to maximising your long-term wealth.
Here are three of the most prominent trends afoot in Australia’s property fund sector:
1. Sector Rotation: Industrial & Logistics Leading the Market
Investor attention is increasingly shifting toward industrial and logistics assets fuelled by the ongoing e-commerce boom.Â
Analysts note that industrial real estate remains one of Australia’s strongest-performing commercial asset classes, with sustained investor demand, competitive yields, and resilient rental growth.Â
CBRE expects this momentum to continue, forecasting annual rental growth of around 3%, with real (inflation-adjusted) gains of 1–1.5% from 2022 to 2029.
2. Sustainability as a Differentiator
Environmental, social, and governance (ESG) considerations are no longer a niche. They’re central to investment decisions.Â
PwC asserts: ‘ESG performance will be a key differentiator and a focus of increasing regulation and scrutiny across the property sector.’
3. Technology Integration
Technology is reshaping how property assets are managed and transacted. From AI-powered analytics to blockchain-enabled leasing and smart building systems, these innovations enhance efficiency, transparency, and tenant experiences.
The main difference between listed and unlisted property funds is liquidity and how the funds are valued.Â
Listed property funds (A-REITs) are traded on the stock exchange, so you can buy and sell them easily like shares, but their price changes daily with market sentiment.Â
In contrast, unlisted property funds are not traded publicly. Their value is based on periodic valuations of the underlying properties, making them less volatile, but your money is locked up for a specific term with limited opportunities to withdraw.
Property funds generate returns in two primary ways:
You can begin investing in listed A-REITs with as little as the price of a single unit on the ASX, often under $500. This makes A-REITs accessible for most investors and allows you to build a position incrementally.
Unlisted property funds typically demand a larger initial outlay. Retail unlisted funds generally start around $50,000–$100,000, while wholesale or sophisticated-investor vehicles may require minimums of $250,000 or more.Â
For example, the minimum investment in Castlerock Government Property Fund is $50,000.
The answer depends on what you value most: diversification and convenience, or control and potential leverage. Both approaches have their distinct advantages and challenges:
| Factor | Property Funds (Listed/Unlisted) | Direct Property Ownership |
|---|---|---|
| Capital Required | Lower entry point; can invest from a few thousand dollars | High upfront deposit and borrowing capacity required |
| Diversification | Broad exposure across sectors, assets, and geographies | Concentrated in one property and location |
| Management | Professionally managed; passive for investors | Active involvement in tenants, maintenance, and financing |
| Liquidity | Listed funds can be traded quickly; unlisted funds are less liquid | Low liquidity: selling a property can take months |
| Control | Limited influence over asset selection and strategy | Full control over property choice, tenants, and improvements |
| Leverage | Typically little or no leverage at the investor level | Significant use of debt possible to amplify returns (and risks) |
| Tax Treatment | Standard investment tax rules; distributions may be franked | Access to depreciation, negative gearing, and CGT concessions |
| Accessibility | Exposure to institutional-grade properties not available to individuals | Ownership of a tangible ‘bricks and mortar’ asset |
| Time Commitment | Minimal: largely hands-off | High: requires active management and decision-making |
Fees can significantly impact your returns and are detailed in the fund’s PDS or IM.Â
Common fees include:
Here’s a comparison of A-REIT and unlisted property fund management expense ratios (MERs):
| Fund Type | Typical MER Range | Key Fee Considerations |
|---|---|---|
| A-REITs (listed) | ~0.5% to 1% p.a. | Lower overall fees due to economies of scale; ease of trading/liquidity. |
| Unlisted Property Funds | ~1.1% to 1.3% p.a. | Higher fees due to multiple layers of asset management (acquisition, management, etc.)Â |
👉 Key takeaway: property fund fees can add up and eat into returns, which is why comparing funds on both performance and fee structure is so important.
Exiting an unlisted property fund is a structured process, not an instant one.Â
The main ways are:
In Australia, a wholesale or sophisticated investor is the legal definition for a person who meets certain financial criteria, allowing them to access investments not available to the general public.Â
Under the Corporations Act, you qualify as a wholesale investor if you have:
This must be certified by a qualified accountant.
No, while office buildings and retail shopping centres are common, property funds invest across a wide range of sectors.Â
Many property funds focus on:
Diversified: Funds that hold a mix of different property types.
Gearing refers to the amount of debt or borrowed money a property fund uses to help purchase its assets. It’s usually expressed as a percentage of the fund’s total assets (the loan-to-value ratio or LVR).Â
Gearing is a double-edged sword.
It can amplify returns, as it enables a fund to buy more or larger assets than it could with its own equity alone.
However, higher debt also means higher interest costs, especially if interest rates rise, which can reduce investor distributions. This is distinct from property debt investments like mortgage funds, where fund investors effectively take on the role of the lender.
Gearing also magnifies risk. If property values fall, the capital losses are amplified.Â
While they seem similar, they are different.Â
A dividend is a share of a company’s after-tax profits paid to shareholders, whereas a distribution from a property fund is your share of the net rental income collected from the fund’s tenants.Â
A main difference is that a portion of the property fund’s distribution can be ‘tax-deferred’ due to depreciation allowances, which is a unique benefit not available with share dividends.
The Trust is an open-ended unlisted property trust that invests in a diversified portfolio of direct commercial properties to provide a regular and competitive level of tax advantaged distributable income combined with the potential for capital growth.
Australia's only high conviction A-REIT fund with an ESG focus. A Property Fund focussed on capital security, income yield, and sustainable growth that seeks to exploit market inefficiencies by employing an active, value based investment style.
The Fund gives Investors access to a professionally managed portfolio of Australian listed real estate, typically known as A-REITs, and Australian listed infrastructure investment securities.
An opportunity to invest in a soon to be completed large format retail centre located in a growing region of Victoria.
An exciting opportunity to invest into Toronto Private Hospital.
The Fund aims to provide quarterly income and the potential for long-term capital growth. A single point of access for investors to a portfolio of quality Australian commercial properties.
Looking for regular monthly income from quality property investments?
The Trilogy Industrial Property Trust is designed to provide a competitive and regular income and the opportunity for long-term capital growth.
The Fund aims to provide monthly tax-effective income and long-term capital growth by investing in the healthcare sector underpinned by long term leases to a range of reputable healthcare operators.
The Fund gives investors exposure to the underlying returns of some of the world’s highest quality real estate assets through a select portfolio of global real estate investment trusts (‘REITs’) and property companies.
Invest alongside us in emerging opportunities targeting 12-14% pa total returns.
Share in development profits earning 16% - 23% pa
The Fund presents an unrivalled investment opportunity with a primary focus on generating consistent income for investors. (For Wholesale Investors Only)
The Fund is an open-ended fund which strives toward a goal of offering stable returns to investors through access to a diversified portfolio of industrial assets (For Wholesale Investors Only)
Invest in a growing portfolio of high-quality government leased assets.
