1. Capital Growth

Over the long term A-REITs are generally expected to produce higher returns than fixed interest investments and cash.

2. Risk and income

In terms of risk, A-REITs are expected to be less volatile than share investments. This is because A-REITs provide a high degree of their total return as income, whereas most equities provide the bulk of their return as capital growth. Traditionally income returns are less volatile than capital growth returns, particularly in a sector such as property where income has a reasonable level of predictability in terms of leasing contracts held.

3. Diversification

In a portfolio sense the addition of A-REITs to an investor’s portfolio provides diversification, with the potential to reduce the riskiness or volatility of the portfolio without significantly reducing returns.

4. ASX Requirements

A-REITs are listed on the ASX and as a result must conform to the rules of disclosure and other such ASX requirements such as increased transparency and accountability.

5. Non-residential alternative

Unitising the assets in A-REITs allows the retail market (mums and dads) to access the returns from the non-residential markets e.g. shopping malls and office blocks etc.