Listed property trusts

Listed property trusts (LPTs), also known as A-REITs (Australian Real Estate Investment Trusts), provide access to a portfolio of professionally managed properties that can provide investors with regular rental returns and capital growth over the longer term.

Through an LPT, you can invest in a diversified portfolio of properties normally considered too expensive for most retail investors to invest in individually, such as shopping centres or office blocks. Listed property trusts can provide diversification across different property types, locations, lease length and tenants.

Through listed property trusts you can invest in different property sectors including:

• industrial properties such as warehouses, factories and industrial parks
• office space in medium to large scale CBD buildings
• retail properties such as shopping centres
• hotels and leisure such as resorts, cinemas and theme parks.

You can also invest in diversified LPTs that provide you with exposure across some or all of these property sectors.

Benefits of investing in LPTs

Some of the benefits of investing in LPTs can include:

• access to a diversified portfolio of quality properties
• portfolios managed by specialist fund managers with access to research not usually available to retail investors
• higher liquidity than investing directly in property as LPTs can be traded on-market at any time
• tax advantages available to the trust (such as depreciation) may be passed onto investors through dividends.

Risks of investing in LPTs

As with any investment, there are risks involved in investing in LPTs. These may include:

• volatility from the cyclical nature of the property market
• possible reductions in asset valuations and rental returns,
• management and board commercial and corporate decisions, and
• gearing risks where an LPT borrows a high proportion of a property’s value, or in some cases, the entire property portfolio.

Learn about investing in residential property.

Contact Dixon Advisory about investing in property.