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Types of A-REITs

With dozens of investments to choose from, A-REITs offer opportunities to a wide range of different investors. This information is provided for educational purposes only and is not financial product advice.

Types

Often larger and more established funds, these A-REITs offer a broadly-diversified portfolio covering most or all of the major commercial property sectors. Many also feature geographical diversification, reducing some of the risks associated with an economic downturn in one particular state or area. 

Many A-REITs specialise in a particular commercial property sectors, usually falling into one of these categories:

  • Office: investing in office buildings ranging from premium towers in the central business districts of major capital cities, to suburban office parks.
  • Retail: investing in shopping malls, high-street retail shopfronts and speciality outlets.
  • Industrial: investing in warehouses, factories, distribution centres and other industrial facilities, such as oil refineries.
  • Hotel and leisure: investing in hotels, cinemas, theme parks and other leisure facilities.

Some A-REITs focus on specialist investments falling outside the traditional commercial property sectors and often requiring specialised management skills – for example, data centres, healthcare facilities and pubs.

While most Australian A-REITs focus on the local market, some give investors access to international property, typically in the US or Europe. 

Some A-REITS trade as stapled securities, typically consisting of one unit in a property trust ‘stapled’ to a share in an associated company. The trust holds a portfolio of property assets, while the related company act as fund manager or undertakes development opportunities.

Because the two securities trade together, investing in a stapled security means taking a position on the performance of both the property portfolio and the related company, which may have very different investment characteristics. Investing in stapled securities can also have tax implications for investors, so it’s important to seek professional advice before you invest.

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