Australian Real Estate Weekly "Could the Budget drive retail flows into ..."

Research evidence excerpt

Australian Real Estate Weekly "Could the Budget drive retail flows into ..."

Global Research

18 May 2026ab

Australian Real Estate Weekly Equities

AustraliaCould the Budget drive retail flows into

commercial property funds? Real Estate

Solomon Zhang, CFA

Analyst

solomon.zhang@ubs.com

Federal Budget could prove a windfall gain for property funds +61-2-9324 2007

The Federal Budget's changes to taxing residential property investment (see note) could Cody Shield, CFA

see 'mum & dad' investors deploying more capital into commercial property, in our view, Analyst

specifically via unlisted property funds/trusts or REITs. At a high level, the new tax cody.shield@ubs.com

framework: i) discourages investment in established residential property, a preferred +61-2-9324 2903

asset class for 'mums & dads' & ii) makes high-income asset classes (e.g. commercial Miriam Pritchard

property) more attractive vs. asset classes more reliant on capital growth. We see this Analyst

potentially incentivising exposure to commercial property, but note direct ownership of miriam.pritchard@ubs.com

commercial property by 'mums & dads' is constrained by a confluence of factors (e.g. +61-2-9324 2270

higher entry prices, lower LVRs & commercial risk/complexity). In contrast, investors can Aman Madhyastha

gain similar exposure via a much lower ~$10-20k min investment in a professionally- Associate Analyst

managed unlisted property fund. We see this potentially benefitting CHC's Direct aman.madhyastha@ubs.com

business ($8.1bn) & CNI's unlisted retail business ($5.1bn). We note CHC Direct's 1H26 +61-2-9324 2000

flows represented just 4.6% of gross flows, well below the FY15-25 19.4% ave (Fig1).

Budget impact mixed; risk of 2027 rate cuts if home prices drop