Risk, liquidity, and return are closely linked across all investments, including property and infrastructure. In general, investments with higher return potential involve higher risk and lower liquidity.

Risk

Risk is the chance that actual investment outcomes differ from expectations.

• Listed property and infrastructure carry market risk, with prices moving daily
• Direct and unlisted assets face risks such as tenant vacancy, operational issues, and valuation movements
• Sector and asset quality significantly influence risk levels

Liquidity

Liquidity refers to how easily an investment can be bought or sold.

• Listed REITs and infrastructure funds are highly liquid and traded on the ASX
• Unlisted property and infrastructure funds have limited liquidity, with restricted redemptions
• Direct asset ownership is typically the least liquid, often requiring asset sales to exit

Return

Return comes from income and capital growth.

• Returns are often income driven, such as rent, tolls, or regulated payments
• Unlisted and direct investments may offer higher long-term return potential due to:
  • Illiquidity premiums
  • Active asset management
• Listed investments may have lower long-term income yields but higher short-term price volatility

Typical comparison across investments

Listed property and infrastructure:

• Moderate risk, high liquidity, market driven returns

Unlisted property and infrastructure funds:

• Higher risk, lower liquidity, potentially higher long-term returns

Direct property or infrastructure assets:

• Highest illiquidity, concentrated risk, income focused returns