• For investors chasing relatively low-risk, dependable returns, industrial property stacks up well.

• Commercial real estate generally falls into three categories: retail, office, and industrial. Of these, industrial is the least exposed to shocks like pandemics, economic downturns, or shifting consumer habits.

• Industrial has become increasingly appealing to residential investors, frustrated by ongoing changes to tenancy and tax rules—rules that don’t apply to commercial property. As a result, more investors are shifting from residential to industrial.

• Leasing demand for quality industrial space remains strong. Vacancy rates are low, rents are rising, and this is flowing through to capital growth—unless there’s a major wave of new developments.

• That said, smaller investors often struggle to build a diversified industrial portfolio due to the high cost of entry.

• Most investors start in residential. It’s driven by emotion and scarcity. Industrial, on the other hand, is all about yield, lease terms, and numbers.

• Commercial can feel complex—long leases, seismic compliance, tighter lending criteria, and more detailed due diligence. But those who take the time to understand it gain access to a stronger, more stable asset class, often with long-term tenants and net leases where tenants cover most outgoings.

• With inflation driving up construction costs, a growing gap exists between current values and replacement costs. Over time, this gap closes, and that's where long-term capital growth happens.

• Simply Industrial targets quality assets in the $2 million to $5 million range—where value, yield, and growth potential still align. Plus, we manage the properties through an independent company mutually owned by our shareholders, making it a set-and-forget investment.

INDUSTRIAL

• No bright-line capital gains tax

• Interest deductibility

• Generally higher yield

• Set income growth (set Rent Reviews)

• Limited Government intervention

• Limited exposure to property expenses (mostly net leases where the tenant pays for outgoings)

• Tenant mostly pays for internal repairs

• Strong Lease Covenant (income security): long term 5-7 years

• No Healthy Homes legislation

• Tax deductibility borrowing against residential to buy commercial

• Often lease personally guaranteed or national or international tenant

• Huge gap between replacement cost (land and buildings) and existing values

• New Government policy, the Investment Boost, offers a 20% immediate tax deduction on new industrial building costs, including new builds.

RESIDENTIAL

• Bright-line capital gains tax

• Lower interest deductibility than industrial

• Generally lower yield

• Heavily regulated: Government intervention

• Costs to landlord includes property expenses (for example rates and insurance)

• Landlord pays all repairs and maintenance

• Minimal Lease Covenant (income security): often shorter term

• Healthy Homes legislation and associated expenses