As policy debate around negative gearing and tax settings intensifies, some residential property investors are reassessing the risks in their portfolios. We are seeing growing interest from private investors and SMSFs in positively geared, high-quality CORE commercial real estate as a differentiated source of income and diversification.

For many investors, the priority is shifting toward inflation-resilient income, high-quality tenants, and portfolio diversification — without taking on the same development or refinancing risks embedded in higher-risk parts of the property market.

That is why we built the PanGen Australian Real Estate Fund (PAREF): to give wholesale investors efficient access to a diversified portfolio of institutional-grade CORE real estate, across high-quality assets and experienced underlying managers. 🏛️

When evaluating commercial property in the current environment, investors consistently ask two key questions:

1️⃣ How do rising interest rates and bond yields impact commercial property?

It comes down to distinguishing CORE from secondary or satellite strategies. CORE property is characterised by established, high-quality assets with conservative gearing and limited development exposure.

Three main tailwinds set CORE property apart today:

• Resilient, inflation-linked income: Rental growth in prime assets typically tracks or exceeds inflation.
• Conservative leverage: Low gearing levels can buffer portfolios against rising debt costs.
• Supply constraints: Elevated construction and financing costs naturally restrict new completions, supporting occupancy and tenant retention in existing prime assets.

2️⃣ What about rising risks in private credit (specifically property credit)?

While headlines around property credit distress continue to build, PAREF’s CORE property strategy has negligible exposure (if any). A significant portion of private property credit is extended to property developers—an inherently higher-risk segment of the market. In contrast, stabilised, cash-flow-generating CORE property, backed by numerous blue-chip tenants, is not subject to these developer-led refinancing pressure.

💡 The Takeaway: Core Risk Core-Plus Return Potential

With attractive entry yields, resilient income fundamentals, and constrained new supply, institutional-grade CORE property offers a distinct risk-return profile relative to higher-volatility sectors.

We believe institutional-grade CORE property is now at a compelling point in the cycle, offering the potential to earn core-plus returns with core levels of risk.

👉 PAREF provides an efficient way to access this attractive asset class.

PanGen Australian Real Estate Fund.Your Gateway to CORE Property.