Property Investment Australia
What is Direct Property Investment?
Direct property is the term commonly used to describe real estate investments, whether it be the purchase of a commercial, industrial, retail, bulky goods, residential or any other property asset, which can either be held directly (direct ownership on the title) or indirectly through collective ownership vehicles such as managed property investments: funds, trusts and syndicates (Listed or Unlisted Property Funds). Investors in Direct Property Investment Funds are wholesale and retail investors and include Self Managed Superannuation Fund investors (‘SMSF’).
Over the last two decades, Direct Property Investment has grown dramatically and has become a core investment class for the growth of wealth through strong risk adjusted returns, while also providing a stable source of income through regular distributions of underlying rental income.
Unlisted Property Trusts
Professionally managed unlisted property investments, also called funds, trusts, syndicates or schemes, are an alternative way to invest in property.
Investors buy ‘units’ in a trust holding investment property or properties, which are managed by a professional investment manager like Terraplex. An Unlisted Property Fund has a fixed investment term and transparent investment purpose.
The initial capital remains invested until the property asset(s) is sold when the trust ends and any net proceeds are distributed among the investors. Throughout the life of the trust, investors also receive income distributions that are paid at set intervals (e.g. monthly or quarterly).
Investment properties are chosen by the investment manager and bought by the trust. The investment manager then manages the associated maintenance, administration and rent collection.
Returns from unlisted Property Funds are typically less volatile for investors compared to A-REITs and are known for providing a consistent inflation-linked income stream.
Property Investment in Australia
Purchasing Commercial property via an unlisted property fund can bring your investment portfolio huge benefits.
You can access a share of a high quality property usually only available to institutions and exposure to professional management teams.
Although unlisted property doesn’t offer liquidity, but investors are compensated by stable returns enjoy returns that combine stable yield and potential for capital growth. These returns are closely linked to the underlying property assets in the trust and tend not to be highly correlated with other asset classes, such as shares, which deliver real diversification benefits for SMSF investors throughout the investment cycle.
There is certainty of income returns, due to the locked-in nature of commercial leases. Unlisted property also tends to be a good hedge against inflation because lease payment increases are usually inflation-linked or have fixed increases of 3-5%.
Terraplex offers property investors the focus, energy and commitment of a ‘boutique’ fund manager, whilst providing institutional grade reporting and deal sourcing capabilities.
Terraplex have many investors who’ve committed to its unlisted property funds which have generated excellent returns.
Structuring your property investment in Australia
For both international and domestic investors, investing via unit trust is an efficient way for tax-effective investment property ownership.
The upside for any off-shore investor seeking to purchase a commercial property investment is the fact that Australia features well structured regulatory environment.
Terraplex’s objective is to provide its property investors with access to Australian real estate investment opportunities which deliver superior returns and generate sustainable income and capital growth through prudent acquisition and active management.