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One of your readers recently reported on her SMSF investment strategy, which includes >50% in unlisted property trusts. Our advisers have recommended we buy commercial property, but we don’t have the time or expertise to do this.
We do have some shares in the listed property sector, but these are obviously subject to the vagaries of the market, hence in principle, unlisted property seems like a good option for us.
Have you had any recent short reviews/recommendations/suggestions of the unlisted commercial property sector, and if not, can you please do one soon?
A: Thanks for the question.
Most of the unlisted property trusts are building or property specific, and are close ended. That is, they raise the money for a property upfront, and then are closed to any further subscriptions.
In theory at least, unlisted property trusts are subject to the same vagaries of the market as listed property trusts – they just aren’t as transparent and there is no observable market price.
Typically, unlisted property trusts will be priced at a discount to listed property trusts (higher capitalization rate and higher distribution yield), because there is no or very limited liquidity, and usually, you have single asset risk. Listed property trusts tend to have multiple assets.
If you are interested in unlisted property trusts, I would get on the mailing lists of some of the larger managers – and then consider opportunities as they arise. Consider managers such as Centuria, Charter Hall, Stockland etc
I have attached a link for an earlier review for a fund for Centuria (now closed).
Hope this helps.
