Why should I make a commercial property investment?

Bring diversification to your investment portfolio

Commercial property, when combined with other investments, can offer important diversification to your investment portfolio, including the prospect of income (rent payments) and growth (prospective land and building value gains). Diversification helps to lower your overall risk and helps in achieving more stable returns.

If you are interested in introducing commercial property to your portfolio it is worth assessing its long-term performance relative to other asset classes, noting historical data provides no assurance of future performance.

Diversification is a great strategy to guard against a single investment’s volatility or one asset class performing poorly (e.g., a fund manager failing or a collapse in the share market).

Active building management and quality tenants

With market movements happening all the time, diversification can help to flatten out the overall performance of your portfolio i.e., when some decrease in value, others may increase and balance out the fall. Overall, diversification lowers the risk to your portfolio performance as no matter what happens in the economy, some investments are likely to benefit.

Commercial property investment is underpinned by the tenants who pay rent to the owners of the building – in Centuria’s case, that would be the fund. The profit on the rent is then distributed to the owners of the fund in the form of distributions.

What this means is that the relationship with and quality of the tenants are paramount. In Centuria’s case, we believe this to be a real point of difference in our acquisition strategy and our preference to actively manage our buildings.

We recommend talking to your financial adviser to evaluate your risk profile and whether a commercial property investment would be right for your investment strategy. You should also read the offer document for more information on investment considerations and risks relevant to the financial product.

If you are interested in investing in a property fund, we would also encourage you to check whether the manager is regulated or not, this is often very important. Centuria is licensed and regulated by the Financial Markets Authority.