PROPERTY TRUST

Property trusts are mutual funds for investing in, and the development real estate. Most large developers have their own property trusts through which they obtain finance to develop, and invest in real estate. They consist of a large number of shareholders each with a small investment in the total number of projects. The advantages ot investment in property trusts are:

• security from spread of investment.
• ability to profit from capital gains
• more liquid than the direct investment in real estate.
• portfolio managed for the investor.

There are 2 types of trusts:

• PUBLICLY LISTED
  The value of units are quoted on the stock exchange. The costs of buying, and selling are standard stock exchange rates of commission. Such trusts are long term trusts without a date for termination.
• UNLISTED TRUSTS
  The most rapidly expanding area of trusts. Units are sold through licensed investment advisers, trust managers' own sale teams of licensed representatives. Unlisted trusts have an average life of about 10 years.

There are 3 areas of concentration:

• GROWTH
  Investment in quality properties by the trust will be on the basis of a long growth strategy. That is, income per share may be low especially during the initial stages but the prospects of future capital gains are high.
• INCOME
  The trust may concentrate on investment income property at the expense of future capital gains.
• MORTGAGE
  Mortgage trusts will show high income with no capital gain.