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In 2025, US equity markets, gold, and bitcoin all reached all-time highs simultaneously. Then, in February 2026, the escalation of conflict involving the U.S., Israel and Iran disrupted the Strait of Hormuz, sent oil prices sharply higher, and triggered a wave of volatility across global markets. For financial advisers, the message from clients has become increasingly consistent: find investments that offer stability, tangible value, and shelter from the storm.
This is where commercial real estate can play its part. Income derived from long-dated leases, unit prices set by independent quarterly valuations rather than real-time sentiment, and low correlation to listed markets make unlisted property a powerful portfolio stabiliser. But here lies a tension. The dominant trend reshaping how Australian advisers manage money – the rise of the Separately Managed Account (SMA)– is built on a foundation of daily liquidity, a structural requirement that has kept private market investments firmly off the table.
Managed accounts, whether SMAs or Managed Discretionary Accounts (MDAs) give investors direct beneficial ownership of underlying assets, enabling greater transparency, tax efficiency, and personalisation than traditional funds. The critical structural difference between the two forms is liquidity: SMAs are model-based, platform-administered products that require daily liquidity, while MDAs offer more flexibility and can accommodate less-liquid assets - and this distinction is crucial.
Australia’s managed accounts industry has grown at scale to $292.9 billion as at 31 December 2025 with more than $20 billion flowing into managed accounts over that period1. SMAs account for two thirds of the market, while MDAs represent roughly $60 billion. Adviser adoption underpins this momentum with approximately 60% of advisers now use them in some form2.
For clients, the appeal is straightforward: managed accounts deliver greater transparency, tax efficiency, and the confidence that their portfolio is being actively managed without requiring their sign-off at every turn. For advisers, managed accounts free them from the administrative drag of seeking client approval for every portfolio adjustment – time better spent deepening relationships with existing clients and growing their business.
That challenge carries genuine national weight - Australia's financial advice profession has contracted sharply over recent years, with adviser numbers stabilising at around 15,5003, nearly half the peak recorded at the start of 2019, ahead of the Hayne Royal Commission's final report. The result is that the average adviser is managing about 100–120 ongoing clients, against an industry aspiration of 200, while an estimated 15.9 million Australians have unmet advice needs4.
For advisers, the 'road to 200' – shorthand for the industry's push to double adviser productivity – is one of the defining commercial challenges of the decade. By eliminating the need for individual client sign-off on every portfolio change, managed accounts are one of the few tools that can credibly get advisers there. But they are not a magic pudding – they also have limitations...
When equity valuations are stretched, geopolitical uncertainty is elevated, and volatility is running high, the case for allocating to real estate – an asset class that derives its value from bricks, mortar, and long-dated leases rather than market sentiment – becomes increasingly compelling.
That instinct has been sharpened by the events of 2026. The conflict in the Middle East, where the escalation, duration and broader economic consequences remain stubbornly unpredictable – is a timely reminder that geopolitical risk can materialise suddenly and at scale. In precisely these conditions, unlisted real estate demonstrates its worth. Unlisted real estate absorbs market volatility precisely because its income flows from long-dated leases and its unit prices are set by independent quarterly valuations - both anchored well away from the daily sentiment swings, trading and corporate earnings cycles that drive listed portfolios and markets. For financial advisers seeking to reduce risk for their clients without sacrificing returns, the current environment presents a powerful argument for allocation to high-quality, appraisal-based real estate.
Australia is now home to the world’s tallest hybrid timber tower, with Atlassian Central reaching its full height of more than 180 metres in Sydney.
In the last seven months, Dexus has made the case that many Australian Real Estate Investment Trusts (AREITs) are trading at discounted valuations (see AREITs: The case for stability and growth and Through war and economic adjustments). Many AREITs remain undervalued.
Dexus Wholesale Property Fund (DWPF) has raised more than $600 million in new institutional investments, including a $500 million commitment that represents one of the largest single investments made in an Australian open ended property fund.
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