A global ETF offers access to income-generating real estate like data centres, healthcare and logistics warehouses – all in New Zealand dollars.

Kiwi investors don’t need to fly to London, Tokyo or Chicago to invest in real estate there. In fact, with the right exchange-traded fund (ETF), it can all be done in our local currency, without buying a single building.

The Smart Global Property ETF, built with iShares and listed on the NZX, offers diversified exposure to more than 300 listed real estate companies from around the world. Its largest geographic exposure is to the United States (around 71% of assets), followed by Japan and the United Kingdom. These companies operate across a wide range of real estate sectors, including residential housing, retail, healthcare, industrial, self-storage, data centres and logistics.

“The fund invests in real estate investment trusts, or REITs, which are companies that own or operate income-producing real estate like apartments, shopping centres, warehouses, and data centres,” says Catherine Pollock of Smart (Smartshares Ltd). 

In a time of global uncertainty, investments focused on long-term trends like digital infrastructure and healthcare real estate can offer both resilience and growth potential.

The new face of property

While many investors still picture commercial property as being malls and office towers, the global property landscape is evolving. 

“Trends are changing globally,” Pollock says. “Industrial, healthcare, data centres and retail are among the top constituents of the index today. It's not just traditional office space.”

One major shift is the rise of digital infrastructure. According to BlackRock, nearly US$50 billion is expected to be invested globally into data centre construction by 2030. That demand is being driven by e-commerce and cloud computing – trends that also support growth in logistics and warehousing.

Urbanisation and demographic change are also playing a role. 

“The demand for housing has changed where a diverse set of needs need to be met,” says Pollock. “There’s strong demand for apartments, aged care facilities, and housing closer to urban centres,” says Pollock.

Listed property is developing to reflect these structural changes. While higher interest rates can affect property valuations, many REITs are backed by long-term leases with inflation-linked rental income, which helps support more stable returns.

“The index includes companies that are adapting to what the world needs today, not just what it needed 20 years ago,” she says.


Catherine Pollock of Smart, GM Business Development and Distribution. 

 

Why use a REIT?

The ETF holds only REITs that derive at least 70% of their revenue from rental income. 

“That could be offices, but it also includes industrial, healthcare and data centre REITs,” says Pollock. “You’re not relying on us to pick a particular company. You’re getting access to a transparent, rules-based index.”

REITs are attractive to investors seeking capital growth and/or income distribution because of their high cash flows and mandated distributions. 

“Property tends to have a higher yield than the broader equity market,” she says. 

Another benefit is liquidity. 

“Unlike holding direct property, you can buy and sell property ETFs just like shares. There’s no need for large capital commitments or long wait times.”

Diversified, liquid and accessible

A key feature of the Smart Global Property ETF is that it’s 100% hedged to the NZ dollar. “When you invest globally, you have two risks: the asset risk and the currency risk,” says Pollock. 

This ETF mitigates currency risk, she adds. Because it’s listed on the NZX in New Zealand dollars, investors don’t need to convert their money or pay FX fees – making things a lot simpler, especially for someone just starting out. 

“Traditionally, if you wanted to invest in property, you were buying a building, or maybe one REIT. Here, you’re getting diversification across sectors and geographies, with very low barriers to entry.”

Pollock adds: “We tend to say, don’t look for the needle, buy the haystack. You don’t have to know which real estate company is going to outperform. You just buy the index.”

ETFs and how they work

An ETF is a type of investment fund that pools investor money to buy a collection of assets, such as stocks, bonds, or in this case, REITs. ETFs trade on the NZX like shares, and most aim to track the performance of a specific index.

This makes them cost-effective, transparent, and easy to use. 

“They’re ideal for building a diversified portfolio,” says Pollock. 

“We’ve seen growing interest from retail investors who want to access global markets without the hassle of managing foreign tax, currency conversion or multiple holdings.”

The Smart Global Property ETF tracks the FTSE EPRA/NAREIT Developed ex Australia Rental Index (100% NZD Hedged).

How it fits in a portfolio

The fund is suited for investors seeking income, diversification, or both. Pollock says it has a lower correlation with other asset classes and can act as a diversifier alongside traditional equities.

“It adds something to your portfolio that has the potential to behave differently from the S&P 500 or NZX 50,” she adds.

Listed REITs can also hold up well in inflationary environments. 

“Rental income tends to be contractually inflation-linked,” she explains. “So they’re potentially more resilient when inflation is high.”

The Smart Global Property ETF is also a listed Portfolio Investment Entity (PIE), taxed at a flat rate of 28%. 

“That helps simplify tax compliance for many NZ investors,” says Pollock.

“You don’t need to be wealthy to start,” she adds. “It’s $500 to invest directly, or as little as $50 per month if you’re already an investor. And you’re not locked in; you can sell whenever you need to.”

The Smart Global Property ETF is available on the NZX under the ticker GPR.


The Smart Exchange Traded Funds are issued by Smartshares Limited (Smart). The product disclosure statements are available at smartinvest.co.nz. Investing involves risk. The value of your investments can go down as well as up. Returns are not guaranteed. 

This information is intended to provide a general guide and is based upon, and derived from sources Smart considers reliable. Neither Smart nor NZX Limited, or their respective directors and employees accept any liability for any errors, omissions, negligent misstatements, or for the results of any actions taken, or not taken in reliance on this information.

This information is not a substitute for professional advice. In preparing this information Smart did not take into account the investment objectives, financial situation or particular needs of any particular person. Accordingly, before making any investment decision, Smart recommends seeking assistance from a licensed Financial Advice Provider.

iShares® and BlackRock® are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock makes no representations or warranties regarding the advisability of investing in any product or the use of any service offered by Smartshares Limited.