Real Estate Investment Trusts (A-REITs)

Real Estate Investment Trusts (A-REITs)

Australian Real Estate Investment Trusts (A-REITs) can enable investors to acquire an interest in real estate assets that are not readily accessible to most individual investors. These may include office towers, industrial, leisure, and retail property. However, not all REITs are the same and your Burrell adviser can help you navigate these sometime complex structures.

In many A-REITs, investors earn income through the regular collection of rental income generated from the properties owned. They can also benefit from any increase in the value of the underlying asset.

The benefits of investing in A-REITs include :

  • Income and capital growth
  • Diversification potential
  • Lower cost exposure to real estate
  • Liquidity of holdings
  • Access to tax concessions (e.g. depreciation allowances).

However, investors should also be aware of the risks involved:

  • Market risk: for REITs this could be caused by market sentiment owing to asset devaluations.
  • Gearing risk: some REITs may borrow funds to increase potential returns; this can magnify losses and returns.
  • Income risk: past distributions by REITs cannot be guaranteed for the future and may vary over time.

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