Recent years have seen property funds give increased attention to the emerging property sectors as a potential source of enhanced returns. In particular, leisure property has figured prominently, including a diverse range of leisure/entertainment property types such as pubs, theme parks, marinas, bowling centres, theatres and tourist parks. The purpose of this paper is to assess the significance of leisure property in a portfolio. The risk-adjusted performance analysis and portfolio diversification benefits of leisure property in Australia over 2000-2006 will be assessed; benchmarked against the performance of the other major asset classes. The strategic investment issues for leisure property will also be identified.