How to play this property market

The spotlight is on residential property but unlisted commercial property trusts are showing very strong yields…if you are willing to commit.

Summary: There are ways in which we can better leverage our exposure to the property market and perhaps turn negative gearing into positive gearing. While listed property trusts are normally yielding around five per cent – around the cost of borrowing – and are priced significantly above their book asset backing, unlisted property can offer yields between 6.5 and 7.5 per cent.

Key take-out: The unlisted property market is delivering a substantial yield premium above normal levels, such as with listed property trusts, but investors must forsake liquidity.

Key beneficiaries: General investors Category: Property


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