A-REIT
An A-REIT is an Australian real estate investment trust — usually (although not always) a property-owning entity listed on an exchange (for example the ASX) that holds income-producing Australian real estate and passes most of its rental income to investors as distributions. A-REITs make up the domestic listed property market. Because the Australian index is small and concentrated in a handful of large names and sectors, it represents only a fraction of the global listed real estate opportunity set that an investor can access. It should be noted some A-REITs undertake significant property development and property funds management activities that can be more volatile compared to rental based businesses.
G-REIT
A G-REIT, or global REIT, is a real estate investment trust listed in a market outside Australia. The global universe includes property sectors — such as data centres, storage and accommodation — that are under-represented in the Australian A-REIT market, which is one reason investors look beyond domestic property. Again, care should be taken as some global REITs may undertake significant development and funds management activities.
Cap rate (capitalisation rate)
A cap rate, short for capitalisation rate, is a property's net operating income divided by its value, expressed as a percentage. It is one of the core yield and valuation measures in real estate: a higher cap rate generally signals a higher income return relative to price, and sometimes a higher perceived risk. Investors and analysts use cap rates to compare properties and to gauge how the market is valuing real estate over time.