For investors seeking exposure to commercial property without directly owning buildings, property funds can provide access to professionally managed portfolios across sectors such as industrial & logistics, office, retail and social infrastructure.
In Australia, property funds generally fall into two categories: listed property funds (A-REITs) and unlisted property funds. While both can provide exposure to the same underlying asset class, they differ in how they are traded, valued, accessed and managed.
Understanding these differences can help investors determine which structure best aligns with their investment objectives, liquidity needs and risk tolerance.
Summary: Listed vs unlisted property funds at a glance
Feature | Listed Property Funds (A-REITs) | Unlisted Property Funds |
|---|---|---|
Trading | Bought and sold on the ASX | Not traded on an exchange |
Liquidity | Typically can be bought or sold daily during market hours | Generally subject to redemption windows or fund liquidity availability |
Pricing | Changes continuously with market trading | Based on periodic asset valuations and unit pricing |
Volatility | Can experience significant short-term market movements | Typically lower day-to-day pricing volatility |
Minimum Investment | Can be as low as the price of one security | Often higher minimum investment amounts, depending on the fund |
Access | Through a broker or investment platform | Directly, via advisers or investment platforms |
Investor Type | Suitable for investors seeking liquidity and listed market exposure | Suitable for investors focused on long-term property ownership characteristics |
What is a listed property fund?
A listed property fund is a property investment vehicle that trades on a stock exchange, most commonly the Australian Securities Exchange (ASX).
In Australia, listed property funds are typically known as Australian Real Estate Investment Trusts (A-REITs). A-REITs own, manage or invest in portfolios of commercial property and allow investors to gain property exposure by purchasing securities in the trust. Listed property funds provide investors with exposure to commercial property while offering the convenience and liquidity of listed markets.
How listed property funds are priced and traded
Listed property fund securities trade throughout the day on the ASX. Prices are determined by supply and demand, meaning they can move higher or lower even when the value of the underlying properties has not materially changed.
As a result, listed property funds can be influenced by factors including:
Interest rate expectations
Equity market sentiment
Economic conditions
Capital market activity
Sector-specific news
This liquidity can be attractive for investors who value the ability to buy or sell quickly.
What is an unlisted property fund?
An unlisted property fund is a pooled investment vehicle that owns or invests in commercial property but is not listed on the ASX. Investors purchase units directly from the fund rather than through a stock exchange.
Unlisted property funds may provide exposure to institutional-grade property assets that would typically be difficult for individual investors to access independently.
Open-ended vs closed-ended unlisted funds
Unlisted funds generally fall into two broad categories:
Open-ended funds
Allow ongoing investment and, subject to fund terms and liquidity, redemptions
May continue indefinitely
Often hold diversified portfolios of assets
Closed-ended funds
Have a defined term
Typically return capital when the underlying assets are sold or the fund reaches maturity
May be focused on a specific property or portfolio
Daily-priced vs periodically valued funds
Unlike listed securities, unlisted property funds do not have continuously changing market prices.
Unit prices are typically based on the value of the underlying assets, with independent property valuations conducted periodically and supplemented by regular unit pricing methodologies.
This can result in a smoother valuation profile, although asset values can still rise or fall over time.
Wholesale, retail and platform access
Some unlisted property funds are available only to wholesale or institutional investors, while others are accessible to retail investors through:
Financial advisers
Investment platforms
Direct applications to the fund manager
At Charter Hall, offerings span wholesale funds, listed property vehicles and direct property funds for different investor segments.
Listed vs unlisted property funds: The key differences
Liquidity and redemption windows
The most obvious difference is liquidity.
Listed property funds can generally be bought and sold each trading day on the ASX.
Unlisted funds typically offer liquidity through redemption facilities, withdrawal windows or fund-specific mechanisms, which may be subject to available fund liquidity and market conditions.
Market volatility vs independent valuation cycles
Listed funds reflect market sentiment instantly.
Unlisted funds are usually valued based on underlying property valuations and therefore may not experience the same day-to-day price movements commonly seen in listed markets.
Neither approach is inherently superior; they simply reflect property values differently.
Minimum investment and access requirement
Many listed funds can be accessed with relatively small investment amounts through a brokerage account.
Unlisted funds often have higher minimum investment requirements, although this varies significantly between products and investor types.
Fees, reporting and governance
Both listed and unlisted funds operate within regulated frameworks and provide investor reporting.
Investors should review:
- Management fees
- Performance fees (if applicable)
- Fund governance structures
- Financial reporting requirements
- Responsible entity arrangements
The specific fee and reporting structure varies by fund.
Income distributions and capital growth potential
Both structures can provide:
- Regular income distributions derived from property rental income
- Potential capital growth over time
Returns will depend on factors including property quality, leasing performance, asset management expertise and broader property market conditions.
When a listed A-REIT may be a better fit
A listed property fund may suit investors who:
Require greater liquidity
Want the ability to trade quickly
Prefer ASX-listed investments
Are comfortable with short-term market volatility
Seek portfolio flexibility
When an unlisted property fund may be a better fit
An unlisted property fund may suit investors who:
Have a longer investment horizon
Are focused on underlying property fundamentals
Are less concerned with daily market pricing
Seek exposure to institutional-quality direct property portfolios
Prioritise income generation from commercial property assets
How investors can combine listed and unlisted property exposure
Many investors use both structures as complementary components of a diversified portfolio.
Using both structures for diversification
A combination can provide access to:
Different property sectors
Different fund managers
Distinct return drivers
Multiple sources of income
Balancing liquidity with lower day-to-day pricing volatility
Some investors use listed property investments for liquidity while maintaining longer-term exposure through unlisted property funds.
The right balance depends on investment objectives, cash flow requirements and risk preferences.
What to assess before investing in either structure
Regardless of structure, investors should focus on the quality of the underlying property portfolio
Sector exposure and portfolio quality
Consider:
Industrial & logistics facilities
Office buildings
Retail centres
Healthcare and social infrastructure assets
Diversified portfolios spanning multiple sectors
WALE, occupancy and tenant covenant
Important metrics include:
WALE (Weighted Average Lease Expiry) — indicating the average remaining lease term
Occupancy levels
Tenant quality and covenant strength
Lease expiry profile
These indicators can help assess income durability and portfolio resilience.
Manager track record and alignment
Investors should evaluate:
Manager experience
Asset management capability
Investment discipline
Alignment with investors
Historical performance outcomes
Past performance is not a reliable indicator of future performance, but track record can provide insight into a manager's approach and expertise.
Charter Hall's listed and unlisted property funds explained
As Australia's leading diversified property funds manager, Charter Hall manages both listed and unlisted property funds across Australia. The group manages a range of wholesale funds, direct property funds and listed real estate vehicles on behalf of institutional, wholesale and retail investors.
Listed property exposure
Charter Hall manages and operates ASX-listed property vehicles, including:
Charter Hall Group (ASX: CHC)
Charter Hall Long WALE REIT (ASX: CLW)
Charter Hall Retail REIT (ASX: CQR)
Charter Hall Social Infrastructure REIT (ASX: CQE)
Unlisted property exposure
Charter Hall also manages a range of unlisted property funds across sectors including:
Office
Industrial & logistics
Retail
Social infrastructure
These funds provide investors with access to institutional-quality commercial property assets through professionally managed portfolios.
Frequently asked questions about listed and unlisted property funds
Is Charter Hall a diversified property group offering both listed and unlisted fund options?
Yes. Charter Hall manages both ASX-listed property vehicles and a broad range of unlisted wholesale and direct property funds across multiple property sectors.
Does Charter Hall offer unlisted property funds with regular liquidity windows?
Liquidity arrangements vary by fund. Some unlisted funds may provide periodic redemption opportunities or liquidity mechanisms, while others have fixed investment terms. Investors should refer to the relevant Product Disclosure Statement or Information Memorandum for specific details.
Can unlisted property funds be accessed through financial advisers and platforms?
Yes. Depending on the fund and investor eligibility requirements, unlisted property funds may be available through financial advisers, investment platforms or direct investment channels.
Are listed or unlisted property funds better for long-term investors?
Neither structure is universally better. The most appropriate choice depends on an investor's objectives, liquidity needs, time horizon, income requirements and risk tolerance. Many investors choose to use both listed and unlisted property investments to create diversified exposure across the commercial property market.
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