ASX A-REITs

A-REITs (Australian Real Estate Investment Trusts) allow investors to purchase an interest in a diversified and professionally managed portfolio of real estate.

A-REITs were previously known in Australia as LPTs (Listed Property Trusts). Internationally, REIT is the more commonly used and understood term to describe this type of financial instrument and so in March 2008 the ASX and S&P decided to adopt the REIT naming convention in place of LPT.

A-REIT investors gain exposure to both the value of the real estate the trust owns, and regular rental income generated from the properties.

The fund manager selects the investment properties and is responsible for all maintenance, administration, rentals, and improvements.

Most property trust managers include properties across a diversity of geographic regions, lease lengths, and tenant types.

Regular income from rentals is a common feature of A-REITs, with most yielding between 5% and 9% per annum.

Part of this income may be tax deferred, therefore investors do not pay tax on the tax deferred portion of the income until their holding in the property trust is sold. Tax deferral example

Because A-REITs invest in relatively stable commercial real estate and investors receive regular rental payments, the price fluctuations (volatility) of property trusts tend to be lower than for shares .

A-REITs are one of the largest sectors on ASX and currently make up 12% of the world's listed real estate assets. 

The types of trusts currently available include: 

  • Industrial - investment in warehouses, factories, and industrial parks 
  • Office - investment in large to medium scale office buildings and parks, generally in and around major cities 
  • Hotel/Leisure - investment in accommodation assets, generally 4 - 5 star properties in major cities or leisure assets such as theme parks
  • Retail - investment in shopping centres, malls, cinemas, and other shopping-related real estate 
  • Diversified - investment in a mixture of Industrial, Office, Hotel, and Retail
  • International - an increasing number of property trusts listed on ASX with a specific investment mandate to invest in off-shore markets such as the US, Europe and Japan.


Property trusts may adopt one of two structures: 

  • Stand-alone trusts or companies providing investors pure exposure to the underlining real estate portfolio.
  • Stapled securities providing investors exposure to a funds management and/or property development company in addition to a real estate portfolio. View stapled security structure

Commercial property assets are valued differently to other asset classes such as shares, fixed income, or residential real estate, therefore returns from property trusts will differ from returns in other types of investment.
Property trusts may be appropriate for investors seeking:

  • Regular income with exposure to real estate assets
  • Diversification into one or more types of commercial property
  • Returns from income and capital appreciation
  • An income stream with a tax deferred component
  • Capital stability with relatively low volatility