Distributions in direct property funds are generally paid from the net operating income of the fund. This income usually comes from rent collected from property assets, after expenses and interest costs.

Most direct property funds aim to pay distributions regularly, often on a quarterly basis.

However, distributions are not guaranteed and may vary in amount or not be paid in some periods.

The level of distributions depends on factors such as:

• Property occupancy levels
• Lease terms and rental income
• Operating costs
• The fund’s level of debt and interest expenses

Distributions are usually calculated based on the number of units an investor holds at the end of the distribution period.

Investors may be able to choose how distributions are received:

• Paid in cash to a nominated bank account, or
• Reinvested into the fund by acquiring additional units, subject to the fund’s terms

Because property income can change over time, distributions are not fixed and may include different tax components. Investors should refer to the relevant Product Disclosure Statement (PDS) for full details on how distributions are calculated, paid and taxed.