Why this fund could be a better option than buying single REITs on the ASX

Arentz: Right. We built it up starting in 2018 and systematically, over time, have added assets to it. They're all typically single-tenant assets. So it's much easier to manage that way. And they have a scale of around $15-30 million in size, very nicely geographically diverse, and also diverse through their industry type as well.

Lee: Okay, good to know. And single tenant, of course, we mean one person---

Arentz: Yeah, one company typically one large company, a manufacturing company, an e-commerce company, a logistics company, it's a range of different types of tenants.

Arentz: Well, we could see the benefits of an Unlisted Property Trust. It is relatively inexpensive to operate. We charge management fees of 0.5%, so it's a pretty low-cost operation. So most of the benefits are passed through to individual investors and it's like a direct property investment, but managed through us.

Lee: If I think about what direct investors who might be watching this video might be thinking, I'm curious, why should an investor consider an entire trust like yours when there are companies like Goodman Group and Charter Hall that can offer direct exposure to the same kinds of properties you are looking at?

Lee: Good to know about the transparency as well. So how does this fund differentiate itself from other property trusts like it?

Arentz: Well, we've typically been a high-yielding trust. So we've looked at areas of the market that were perhaps underpriced or undervalued as we saw them over time. Since 2018, that's proven to be the case. We've seen good value increase through most of the assets that we've secured. 

We've also seen, more importantly, good rental growth as well. But we're very selective with how we choose these assets based on location, based on industry type, and also based on building type as well.

Lee: We've talked a lot about the buildings, the different building types, the different tenants, the different locations. Tell us maybe about a couple of the assets in the fund and how they're indicative of your process.

Lee: You talked about yields earlier. So what kind of a distribution profile can investors expect?

Arentz: Well, over time, the all-up returns have been just under 10% - or 9.7% last year. It's a little less because we've seen a little bit less capital growth as markets stabilise post-COVID and interest rates stabilising and the like. But somewhere between that 7.5 to 9.5% is a range what we would expect to see moving forward. 

There's a little bit of movement in that because you're driven by income profiles a little bit, but all those income profiles across the various assets have been quite strong. We've seen strong rental growth in some sectors, and we expect to see more rental growth given very high levels of demand and very low vacancy rates. We'd expect to see that rent growth continue.

Arentz: Well, there's a lot more information available on our website, and as you mentioned earlier, we're transparent like that. We also have investor relations, people who'll happily take a phone call at any time. 

We're quite open to that direct approach from investors. Investors can start with a minimum $20,000 investment and then step it up from there. So it's a real chance for retail investors, not necessarily super high net worth or wholesale investors, but your average mum and dad investor who wants to get an action piece in the industrial space rather than say a residential apartment or something like that. 

This is a very good opportunity for them. And these assets are grassroots. They're simple assets. They're not complex. They're driven by good industries, and they've proven to be a good strong investment base for us in the time we've held them.

Find out more about Trilogy Funds here.

Managed Fund

Trilogy Industrial Property Trust

Australian Property

View