How to get started in commercial property investment

There are a few different ways to make a commercial property investment.

1. Buying a commercial property yourself

Investors can make commercial property investments directly, however, it can be expensive and requires an investor to do research and understand the market they are investing in. Investors should also forecast the ongoing profitability of the investment and assess the potential for long term capital gains. Once purchased, you will then need to manage your tenants, and the ongoing maintenance of the property.

2. Unlisted Property Funds

An unlisted property fund is a form of property investment that provides investors the opportunity to gain access to higher quality commercial property assets with a smaller minimum investment. By investing in an unlisted property fund, investors will receive units/shares in the fund/company which holds the property asset(s) that are managed by a professional property investment manager such as Centuria.

There are generally two kinds of unlisted property funds:

• open ended – which generally invests in a portfolio of real estate assets, and may acquire further assets, with further investment available through subsequent equity raising (like the Centuria NZ Healthcare Property Fund, the Centuria NZ Industrial Fund or the Centuria NZ Property Fund). They may also always be open for investment; and
• Closed ended – generally invested in a single property, with investors receiving units/shares at the commencement of the fund. Closed ended funds have no fixed term with investors able to liquidate their investments through finding a buyer on the secondary market or a return of capital if the underlying property is sold, proceeds are distributed and the fund is wound up.

Investments in Centuria’s unlisted property funds can be traded on the Secondary Market operated by Centuria New Zealand.

3. Listed Property Funds

Listed property funds are similar to unlisted open-ended funds but provide further liquidity through being listed on a stock exchange where investments are regularly traded. An investor prioritising liquidity tends to be drawn to listed property investments because units/shares in the listed funds can be purchased and sold on the New Zealand’s Exchange (NZX).

If you are interested in hearing about Centuria’s upcoming investment opportunities, register your interest here.