Property & Infrastructure Funds AFR: Unlisted property funds outperform

Unlisted property funds outperform in 2018

Unlisted property killing it for the last 5 years now. I’m lucky enough to have been riding that wave for at least 3 of those last 5 years.

 

@Big Al

Congrats on the gains. had to unblock it to see some of the below

Over 2018, listed property trusts delivered well below their five-year average result of 12.4 per cent. Within the listed sector, though, there was considerable variation, with fund managers such as Goodman and Charter Hall generating returns of near 60 per cent.

Drilling further into the total return of 10.3 per cent from direct property, strong capital growth from the industrial and office sectors gave investors total returns of 14.8 per cent and 13.7 per cent respectively over the 12 months to December 2018.

By contrast, within the direct property sector, returns from retail property fell considerably, delivering 6 per cent in the past year, compared to 10 per cent in the 2017 calendar year.

 

Not sure if this level of performance can continue but just the yield on unlisted property with no capital gain factored in is still reasonable. This is of course based on picking the right unlisted property trust.

For me though there would have to be an extremely attractive offer from an unlisted fund to get me committing any more to property trusts. With just over 50% of the portfolio in property trusts I am trying to swing back the pendulum towards equities in index funds.

 

If's you've had a really good run for five years , I'd be looking at what next ?

Cliff

 

I have managed to capture the last 3 years of the ride.

Agree with what’s next. Problem is no asset class is looking very attractive at the moment. Am I imagining it or is there a lot of economical uncertainty at the moment? No one seems to know if we are going up down or sideways.

That’s why the strategy from here is to just keep dropping monthly sums into index funds. I’m not necessarily looking for the next big money maker. Just a nice steady reasonable yield paying with some future growth investment.

The closest I can find to that at the moment is investing in VAS. A decent yield of 4% or so a good portion of it franked with hopefully just another few percent of growth ontop each year. I’m not greedy, I’ll take 1%-2% growth p.a above the yield and be happy.

 

I haven’t been big on development funds. I’m in funds that have a small portion of development but don’t like the added risk of a single development asset fund.
Even a development in the best of locations could run into trouble if a GFC style event hits part way into the development.