Listed property funds (A-REITs)

An Australian real estate investment trust (A-REIT), or listed property fund, is a unitised portfolio of property assets, listed on the Australian Securities Exchange (ASX). Investors are issued units that can be traded on the ASX through a stockbroker. The assets of a listed property fund can include commercial office buildings, industrial properties, retail shopping centres, hotels and/or leisure venues. In addition to different types of real estate, property funds may offer diversification through owning assets in different geographic locations.

The benefits of listed property funds (REITs) are that they have the potential to provide investors with returns in the form of capital gains and regular distribution income. They also enable investors to gain exposure to the commercial property market without the requirement to manage the properties themselves.

Some factors to consider when investing in listed property funds include, but aren’t limited to, share market volatility, property valuation metrics, balance sheet fundamentals, cash flow sustainability, tenant demand and supply fundamentals, gearing and interest cover ratios of the fund. You also need to understand the individual properties held by the fund and their characteristics.

Centuria has two listed property funds that are both included in the S&P/ASX 300 index: Centuria Industrial REIT (ASX: CIP) and Centuria Metropolitan REIT (ASX: CMA).

Centuria Industrial REIT is Australia’s largest ASX listed income focused industrial investment vehicle and owns a diversified portfolio of quality industrial real estate assets located in key metropolitan regions throughout Australia.

Centuria Metropolitan REIT is Australia’s largest ASX listed metropolitan office REIT and owns a portfolio of high-quality metropolitan office assets and industrial assets. The properties are located in core metropolitan submarkets throughout Australia. CMA is assessing opportunities to divest of its two remaining non-core industrial assets, which would result in a pure-play office REIT.