This Glossary provides definitions of terms related to property and property investing.
A B C D E F G H
I J L M N O P R
S T U V W Y Z
Term and Definition
Accrued depreciation

The difference between the cost of replacement new and the present value.

Acquisition fees

Acquisition and disposal fees are fees charged to a fund on the acquisition and disposal of assets.

Notes:
The acquisition and disposal fees are either apportioned between the fund manager and asset manager or paid only to the asset manager.

The fees can either be a percentage of the gross value of the asset or a fee that is paid at the discretion of the fund manager.

Acquisition fees are not usually charged in the case where a property developer/operator contributes assets to a fund.

In some funds, the fund manager does not charge additional fees for acquisition and disposals. However, fees for external advisors, e.g.property agents, are passed onto the fund at cost.

Administration fee

Fees, usually paid to a fund administrator, for maintaining fund accounting and documentation.

Agreement for Lease / Pre Lease Agreement

A formal agreement binding the intentions of the landlord and tenant to enter into the lease of property, subject to conditions precedent, for e.g. the completion of building works. The Agreement for Lease is usually based on the Heads of Agreement and is appended to the final lease.

Alpha

Outperformance of the market. A high alpha indicates the fund has performed better than would be predicted given its ‘beta‘ (market). Alpha is a coefficient that measures the risk-adjusted performance, or the excess return, considering the risk due to the specific fund and its underlying investments, rather than the overall market. Alpha is the return a security or an asset portfolio would be expected to earn if the market return were zero.

Anchor tenant

The prime and usually the most reliable tenant of a property. The term is used in reference to shopping centres however can also apply to office buildings and industrial estates. e.g. Myer.

AREIT / Listed Property Trusts

Australian Retail Investment Trusts (AREITs) are property companies listed on the Australian Stock Exchange (ASX) in which shares can be traded.

Asset allocation

The apportionment of an investment portfolio among different asset classes, e.g. shares, bonds, property, infrastructure and cash.

Asset management fee

A fee paid to the fund manager for their services to manage the assets on behalf of the fund.
Asset management fees cover services including:
– strategic input and production of asset level business plans
– management of assets including minor leasing, usually tenant renewals, and capital expenditure projects
– appointment of third party service providers; and
– reporting to the fund manager

The asset management fee is generally a fixed percentage of Net Asset Value (NAV) or Gross Asset Value (GAV).

In some circumstances, a manager will charge a Development Management Fee in additional to the Fund Management Fee.

Assignment of lease

The transfer by a lessee of all exclusive rights to a property under a lease contract to an assignee. The assignee becomes the lessee under the original lease and the transferring lessee becomes the assignor. The obligations of the lease transfer to the assignee.

Attribution analysis

Analysis of the difference between the actual portfolio total return and the benchmark return. This technique reviews the benchmark to both the individual asset performance (stock) and the Funds’ weighting to a sub-sector (sector). Attribution analysis can help assess the success of the manager’s investment decisions for asset selection, sector allocation and market timing.

Audit fees

Fees charged for audit services provided to the fund. These costs are usually paid by the fund.

Australian Prudential Regulation Authority (APRA)

The Federal Government body responsible for the regulation and monitoring of the insurance and superannuation industries.

Australian Securities and Investments Commission (ASIC)

The Federal Government body responsible for administering and enforcing the Corporations Act and laws to protect consumers in the areas of superannuation, investments, insurance and banking. ISPT is governed by ASIC.

A B C D E F G H
I J L M N O P R
S T U V W Y Z
.