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Property schemes

Investing in listed and unlisted property schemes

Page reading time: 3 minutes

A property scheme allows you to buy 'units' in an investment run by an investment manager.

Understand how listed and unlisted property schemes work. Weigh up the risks and decide if it's the right investment for you.

If you need help to understand property schemes, consider getting advice from a licensed financial adviser.

How property schemes work

A property scheme is where you buy 'units' in an investment run by a professional investment manager. They pool your money with that of other investors and invest it in property assets. These may include commercial, retail, or industrial assets.

The investment manager selects and buys investment properties. They are responsible for maintenance, administration, rental collection and improvements to the properties. Some schemes invest in property development, which means there are construction and development risks.

Depending on the type of scheme you invest in, you might get a regular income (distributions). These may be paid quarterly or half-yearly. You may also get a capital gain on your investment, if the value of the scheme's underlying assets increase.

Check the product disclosure statement

The product disclosure statement (PDS) tells you how the property scheme works. Read the PDS to understand:

Listed versus unlisted property schemes

Listed property schemes

These are also called 'property trusts' or 'real estate investment trusts' (REITs). Property schemes listed on a public market, such as the Australian Securities Exchange (ASX), are:

Unlisted property schemes

An unlisted property scheme does not list on a public market. This means:

How to assess the risks of property schemes

Investment managers for unlisted property schemes must report on benchmarks set by ASIC, and disclose how the property scheme meets them. If the scheme does not meet these, they must explain why and how this affects risk.

Listed property schemes do not have to report on these benchmarks but they can still provide a good checklist to assess the scheme's risk.

To check how risky a property scheme is, look at:

To see how a fund is performing against these benchmarks, look at the fund's annual report. You can find this on their website.