You are not buying a particular building, and you are not receiving a fixed rental payment.
Listed property gives investors exposure to property businesses through securities traded on a market. These businesses may own offices, shopping centres, warehouses, apartments or other property assets, and often distribute part of their income.
The market price can change daily as investors respond to occupancy, rent, interest rates, debt, property values and economic conditions. A listed-property fund can also hold local and offshore companies with very different exposures.
Property may diversify a portfolio, but it can overlap with shares and is not automatically defensive. It can fall sharply, and income distributions can change. Compare the actual holdings and risks rather than assuming the underlying assets make the investment steady.
Try this now
Find the property allocation in one portfolio. Record whether it is local, global or mixed, the major sectors it owns and how much of the total portfolio it represents.
Ask your advisor
- What role does listed property play in this portfolio?
- How sensitive is it to interest rates, debt and a particular property sector?
- Is any property exposure already present inside my equity funds?
Listed property can be bought and sold like other market assets; its price is not the same thing as an independent property valuation.