What are unlisted property funds?
An unlisted property fund is a form of direct property investment that provides investors the opportunity to gain access to commercial property assets through an investment in a fund. The Newmark business model is to deliver quality investment grade opportunities to both wholesale and retail private investors. Newmark’s investment model enables investors to evaluate and select a fund with the specific property that they choose to invest into, in a properly governed investment structure. Newmark believes that this model most closely aligns with an investment in direct property, whilst offering a scale and quality of asset that most private investors would otherwise not be able to access.
By investing in an unlisted property fund, investors will receive units in the fund/trust which holds the property assets that are managed by a professional property investment manager such as Newmark. Unlike listed property funds, unlisted property funds are not traded on the Australian Securities Exchange (ASX).
There are two main kinds of unlisted property funds – closed-ended unlisted property funds and open-ended unlisted property funds.
- Closed ended: In a closed-ended fund, the fund manager issues a set number of units for investors at the beginning, who are generally with the fund for the duration of the investment and generally cannot redeem until the underlying property is sold or a special recapitalisation and/or liquidity offer is provided. A closed-ended fund is usually a single-asset fund and will run for approximately five to seven years.
- Open ended: An open-ended fund will generally invest in more than one property and the fund manager does not issue a set number of units. They can issue more units as the fund expands and invests in more properties, for example. An open-ended fund operates with no fixed-end date and can continue investing in properties indefinitely if it wants to and has the capital. Newmark has several closed ended unlisted property funds that invest in some of Australia’s most sought-after assets, including the iconic Jam Factory and Como Centre in South Yarra and David Jones Menswear Store in the heart of Melbourne’s CBD.
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