What’s the difference between listed and unlisted property trusts?

As joint investment vehicles, managed property trusts can give investors the opportunity to gain exposure to larger and potentially higher-quality assets at a significantly lower price point than investing in such assets directly, and without the hassles of managing these properties themselves.

Property trusts are generally offered in two forms – listed or unlisted.  Whilst both types are based on the similar premise of pooling funds to buy commercial real estate for investment returns, they can also behave differently in a number of other aspects, and as such will offer varying benefits and drawbacks to investors. So what are the main differences between the two investment vehicles? And what factors do you need to take into consideration as an investor when selecting which one is right for you?

Similarities of unlisted and listed property trusts

Unlisted and listed property trusts work in similar ways in that investors contribute capital in return for a share of the asset (or assets) held by the trust, issued either in the form of units (unlisted property trusts) or  securities (listed property trusts). In both cases, the assets are operated by a professional fund manager, like Mair Property Funds, who is responsible for selecting the investment properties and monitoring their performance as well as the ongoing administration of the trust (i.e. maintenance, improvements and rental collection).

In return for their investment, investors may receive:

  • Regular income, called ‘distributions’, usually distributed monthly or quarterly for unlisted funds and bi-annually for listed trusts; &
  • A capital gain on their original investment. For listed trusts, this is in the form of an increase in the price of their securities, and for unlisted it is in the form of a portion of the capital gain realised on the sale of the asset (relative to the initial units bought in the trust).
Listed Property Trusts

The key difference between listed and unlisted property trusts lies in the way funds are traded. In Australia, listed property trusts are known as “Australian Real Estate Investment Trusts” (A-REIT) and are listed on the Australian Securities Exchange (ASX). Investors are issued securities which behave similarly to shares in that they can be traded on the ASX through a stockbroker. It is this platform that provides a secondary market for investors and the benefit of high liquidity, with investors able to buy and sell their securities as they choose. While this can be a positive for experienced investors with the ability to gauge when to enter and exit these markets, there are also negatives to being listed on the ASX. A downside for many investors is that the value of their securities can be subject to considerably more volatility, driven by changes in market sentiment and general perceptions of what the underlying assets are worth. In addition, dividends tend to be paid less regularly with listed trusts, typically bi-annually, which means greater cash flow management is required on the part of investors. It’s important to note that there can also be different forms of securities with listed property trusts. While some will simply give you a share in the fund’s assets, other funds can offer ‘stapled securities’, whereby investors receive a share in the funds management company itself as well as units in the trust.

Unlisted Property Trusts

Unlisted property trusts are privately held and aren’t listed on a secondary (public) market in the same was as REITs. In this sense, they bear greater similarity to direct investment in that investors gain direct exposure to the trust’s underlying assets. Contrary to listed property trusts, investments in unlisted trusts are usually secured for the duration of the trust period (determined by the trust’s constitution). Whilst these investments therefore offer lower liquidity to investors, the benefit of this is that unit prices are generally a lot less volatile and will be priced based on the capital value of the underlying assets rather than general market sentiment. As such, they won’t be subject to the same daily fluctuations as securities in listed trusts (see graph below).


This chart clearly demonstrates the stability of direct property, which is closely correlated with the performance of unlisted property trusts, compared to listed Australian Real Estate Trusts which show considerably more volatility.

Another benefit of unlisted property trusts is that they typically offer investors greater control over their investments, with voting rights (i.e. to determine aspects such as trust extensions) being apportioned relative to each investor’s interest in the trust. In addition, investors will generally receive distributions more frequently with these investments, usually monthly or quarterly, which can benefit those seeking greater regularity of income stream.

Mair Property Funds has been helping investors access the commercial property market through unlisted property trusts for over 35 years, providing unique investment opportunities to both retail and wholesale investors.

If you would like to learn more about unlisted property trusts and how the trust structure works, download a complimentary copy of our latest guide, An Introduction to Unlisted Property Trusts.

Alternatively, to be notified of upcoming investment opportunities at Mair Property Funds, contact Brad Dunn at bdunn@mair.com.au


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