Regulation plays a key role in protecting commercial property investors by setting clear rules for disclosure, governance and investor rights.

Clear disclosure and transparency

Regulation requires commercial property funds offered to retail investors to provide a Product Disclosure Statement (PDS).

The PDS must clearly explain:

• How the fund operates
• The risks of investing
• Fees and costs
• Distribution and withdrawal arrangements
• How assets are valued and priced

This helps investors understand what they are investing in before committing capital.

Governance and accountability

Most commercial property funds operate as managed investment schemes under the Corporations Act 2001.

These schemes must have a licensed Responsible Entity that:

• Holds an Australian Financial Services Licence (AFSL)
• Acts in the best interests of investors
• Manages conflicts of interest
• Operates the fund in line with its constitution and compliance plan

This creates legal accountability for how the fund is managed.

Ongoing reporting and oversight

Regulation requires ongoing reporting to investors, including:

• Regular distribution and transaction statements
• Audited annual financial statements
• Updates on material changes to the fund

ASIC also sets benchmarks and disclosure principles for unlisted property schemes to improve comparability and risk transparency.

Asset protection and investor rights

Regulatory rules require:

• Fund assets to be held separately from the manager’s assets
• Defined rules for withdrawals and unit pricing
• Independent or documented asset valuation processes

These measures help protect investors if the fund manager experiences financial difficulty.

Overall, regulation is designed to reduce information gaps, improve transparency and enforce minimum standards of conduct, helping commercial property investors make informed decisions and reducing the risk of unfair treatment.