Australian Property Funds in 2025

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:

• The MSCI/Mercer Australia Core Wholesale Property Fund Index tracks 15 major funds with a combined value of $66.5 billion (as of July 2025).
• The Property Council/MSCI Annual Index covers over 1,300 properties worth $200 billion, showing how deep the market is.

Together, these funds provide investors with:

• Diversification across property types
• Professional management
• Regular income distributions
• No hassles like mortgages or tenants

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.

How We Rank the Property Funds: Methodology & Performance

When analysing and ranking property funds, investors should adopt a holistic approach that balances both performance and risk considerations. 

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. 

Alongside this, distribution yields should be evaluated to understand the consistency and competitiveness of fund income returns relative to peers. 

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. 

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. 

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:

Understanding Property Funds: Your Gateway to Commercial Real Estate

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.

 

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. 

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. 

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.’ 

David Harrison, Managing Director, Charter Hall concurs and highlights the value of co-investment in property funds: 

‘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.’

What is a Property Fund?

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. 

According to Australian Unity: 

‘Property funds provide access to a portfolio of real estate assets that would otherwise be difficult for individual investors to purchase directly.’ 

Centuria notes that unlisted property funds: 

‘enable investors to gain exposure to commercial real estate with a lower initial capital outlay while receiving regular income distributions.’ 

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.

Types of Property Funds in Australia: Listed vs. Unlisted

Prior to investing in property funds, it’s important to understand the differences between listed and unlisted property funds:

Listed Property Funds (A-REITs)

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:

• Minimum Investment: As little as the cost of one ASX-listed unit (usually under $500).
• Liquidity: High, investors can enter or exit positions at any time during ASX trading hours.
• Volatility: Higher, as unit prices fluctuate with daily stock market sentiment as well as underlying property valuations.
• Distributions: A-REITs are required to pay out the majority of taxable income to investors, usually on a quarterly or semi-annual basis.
• Market Capitalisation: The sector’s collective market cap exceeds $100 billion, making Australia’s REIT market the largest outside of the U.S.

Top 10 A-REITs:
 

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:

• Resolution Capital Global Property Securities Fund (Managed Fund): gives investors exposure to the underlying returns of some of the world’s highest quality real estate assets.
• Pengana High Conviction Property Securities Fund: invests principally in listed (or soon to be listed) Australian property securities. 

Unlisted Property Funds

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:

• Minimum Investment: Higher, often starting from $50,000 to $100,000 for retail investors.
• Liquidity: Limited, investors usually must wait for redemption windows (e.g. annually) or until the end of the fund’s fixed term.
• Volatility: Lower, assets are revalued periodically (quarterly or annually), so pricing reflects property fundamentals rather than daily market sentiment.
• Structure: May be open-ended (accepting new capital and redemptions) or closed-ended (fixed pool of capital for a specific project or timeframe).
• Assets Under Management (AUM): Australia’s unlisted property sector manages tens of billions of dollars, spanning diversified multi-asset portfolios to single-asset projects.

Examples:

• ICAM Diversified Industrial Fund: focuses on industrial and logistics assets.
• GDA Diversified Property Trust: offers a spread across retail, office, and industrial properties.
• The Stay Company Income Fund: hospitality-focused with recurring income streams.

Wholesale vs. Retail Property Funds

Property funds are also categorised by their target investor:

• Wholesale Funds: These funds are targeted at sophisticated investors who meet specific wealth or income thresholds (typically requiring a minimum of $250,000). They offer access to premium assets and have more flexible structures. 
• Retail Funds: These funds are available to the general public with lower minimums (e.g. $10,000 - $100,000). They are subject to stricter regulatory oversight by ASIC to help protect everyday investors. 

Key Benefits & Risks of Investing in Property Funds

Prior to investing in property funds, it’s important that investors understand the key benefits and risks:

Benefits of Property Fund Investment

✅ 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. 

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. 

As Australian Unity notes: property funds ‘spread investor capital across a portfolio, reducing the risks linked to individual tenants or buildings.’ 

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. 

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.

Risks to Consider

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. 

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.

How to Choose a Property Fund: A Due Diligence Checklist

Ready to invest in property funds? Investing successfully requires thorough due diligence. 

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. 

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.

✅ Understand the Strategy

Is the fund adopting a conservative buy-and-hold approach, or a higher-risk value-add or development strategy? 

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. 

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). 

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. 

As FRP Capital notes: ‘unlisted property funds must detail deferred income structures and liquidity terms clearly in offer documents.’

📌 Expert Insight: 

‘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.’ 

Hamish Wehl, Head of Funds Management at Cromwell Property Group

Investor Case Study: The Real-World Impact of Fund Fees

To understand the long-term impact of your fund choices, consider this example. 

Sarah has a long-term savings goal and is aiming to invest $100,000 for 10 years. She is considering two property funds:

• Fund A (Low-Cost A-REIT): Listed property trust with a 0.50% p.a. Management Expense Ratio (MER).
• Fund B (Unlisted Property Fund): Unlisted property fund with a 1.25% p.a. MER.

Both funds expect to generate the same average gross return of 8% p.a. before fees. The main difference lies their respective fee structures.

How Fees Impact a $100,000 Investment Over 10 Years

Here’s how those two funds are expected to perform after fees during the investment period.

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.

Current Market Trends and Outlook

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. 

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. 

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. 

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.