Property investment funds

There has been a very significant increase in the level of indirect investment in real estate sector in Bulgaria over the last two years. The investors are mostly represented by limited partnerships, as well as offshore unit trusts. The traditional base of property investors in these vehicles has expanded, to include not only institutions and life companies, but also private equity, high net worth and non-resident investors.

By investing in property through a managed fund, the risk of loss is reduced through the fund's ability to diversify across a range of different property sectors, such as commercial, office, industrial, hotel and retail.

The advantages of investing in property fund:

• Property funds provide strong capital growth.
• Property funds provide regular income.
• The risk is reduced through diversification where the fund invests across different property sectors.

The number of property funds launched in recent months is increasing, causing a bit of a stir in the Bulgarian property market. Most of these products are global property funds, a relatively new asset class for local investors. Global property funds mainly invest in REITS (Real Estate Investment Trusts). These are securities that sell like a stock on the major exchanges and invest in real estate directly, either through properties or mortgages. REITS receive special tax considerations, and typically offer investors high yields as well as a highly liquid method of investing in properties. These trusts invest in properties and are responsible for the equity or value of their real estate assets. Usually the revenues come from rents of the properties.

Property funds can also invest in other property investment companies or property developers. There are a lot of kinds of investment funds available, which differ from one another.

Related articles:

Definition of Property Fund
Property Fund is a term concerning a mutual fund for investment in real estate.

How Property Investment Fund Works?
The property investment fund is a kind of mutual funds aiming at maximizing the returns of the investors.

Should the investors consider property funds?
Property investment funds are growing in popularity. The key features and advantage of using Property Fund folloe herein.

What is Real Estate Investment Trust (REIT)?
Real Estate Investment Trust (REIT) is a special tax exempt property investment vehicle. Like investment trusts, their shares are traded on the stock exchange markets and capital remains fixed.