FAQ’s

Why should I invest in Industrial real estate?

Industrial real estate comprises commercial properties used for manufacturing, production, warehousing, distribution, research and development, and other similar purposes. This asset class is considered stable and reliable due to its long-term lease agreements and high demand from tenants. Compared to other commercial real estate such as office and retail space, industrial real estate is less susceptible to economic disruptions and obsolescence, making it a defensive asset class during inflationary times.

Investing in industrial real estate also offers many tax advantages, including the ability to deduct interest costs and depreciation, no capital gains tax (Brightline), no stamp duty on purchases, and no restrictions on foreign purchasing. Industrial real estate is also a simple investment that often features low maintenance, often hassle free buildings and long-term tenants. Furthermore, high inflation is viewed as a friend to industrial real estate investors, as there is presently a large gap between the cost of purchasing a building and its replacement cost, which provides opportunities for growth and profitability.

Overall, investing in industrial real estate is an attractive option for investors seeking a long-term, low-risk investment with favourable tax advantages and steady demand from tenants. It is important to do thorough research and assess the potential risks and rewards before investing in any asset class.

What is a commercial (industry) property fund? 

An industrial commercial property fund enables investors entry into industrial and commercial properties and leave the hassle of property management, compliance issues, and dealing with tenants to others. This makes investing in industrial real estate more accessible and less daunting for individual investors.

By pooling money from multiple investors, the fund can acquire more diversified portfolios of properties, which may offer better returns and lower risk than individual investments. Investors receive returns on their investment through dividends, capital appreciation, or a combination of both.

Investors can buy shares in the fund, which gives them a proportional ownership in the properties.

These funds are typically managed by experienced real estate professionals who have a deep understanding of the sector and can make informed decisions about which properties to invest in and how to manage them

Proper due diligence and seeking professional advice are important before investing in any fund.

Why a invest in an industrial  property fund?

Firstly industrial real estate is a proven long term investment sector, with excellent returns; vacancy rates are historically low and expected to continue with strong demand.   

Investing in a property fund provides several benefits to investors, including diversification of their investment portfolio, access to professional management, potential for high returns, and the ability to invest in large-scale properties that may be out of reach for individual investors. By investing in a portfolio of properties, investors can reduce the risk associated with investing in a single property. This diversification helps spread the risk, reducing the impact of any one property underperforming. Additionally, the funds are managed by professionals who have expertise in property investment and management, which means that investors can benefit from their knowledge and experience. Additionally, industrial property funds generate capital growth over the long term as the value of the properties in the portfolio increases. Investing in industrial real estate can be complicated, particularly when it comes to dealing with tenants and leases. Overall, investing in an industrial property fund provides an opportunity to participate in the growth of a fund without having to directly own or self-manage the assets. This diversifies the property investment portfolio and can potentially provide higher returns.

How do I choose an industrial commercial property fund to invest in?

When considering investing in an industrial commercial property fund, investors should evaluate the fund's track record, the experience of the fund managers, portfolio diversification and fees. They should also consider their own investment objectives and risk tolerance and seek advice from a financial advisor. By conducting thorough research and due diligence, investors can make informed investment decisions and choose a fund that aligns with their goals and objectives.

How long is the life of the fund and how long do I need to keep my investment in the fund?

The Simply Industrial fund's main objective is to generate long-term capital gains through rent increases and building revaluations, which should lead to an increase in the value of its shares over time. While the fund aims to increase dividends whenever possible, the focus is on driving revenue and profit growth while keeping overhead costs low, with the goal of creating sustainable value for investors over the long term (typically 5-10 years). This strategy is consistent with the fund's investment approach, which emphasises investing in a diversified portfolio of industrial and commercial properties with long-term growth potential, rather than pursuing short-term gains through high-risk investments or speculation. Investors considering investing in the Simply Industrial fund should carefully evaluate the risks and potential rewards associated with this type of investment, as fluctuations in rental income, property values, and market conditions can affect the fund's performance.

What are the present conditions for industrial real estate in New Zealand?

Industrial properties have historically performed well as an investment, with low vacancy rates and strong demand driven by factors such as e-commerce, logistics, and manufacturing. This high demand can put upward pressure on rents and increase the value of the properties. Additionally, the gap between the price to buy industrial buildings and their replacement cost, which reflects the value of both the building and the land it sits on, contributes to the stability and potential appreciation of industrial assets over the long term. However, as with any investment, there are risks and uncertainties to consider, and investors should carefully evaluate the potential risks and rewards before making any investment decisions. Factors such as changes in the economy, government policies, and technological advancements can impact the performance of the industrial property sector. Nevertheless, industrial properties remain a popular choice for investors seeking stable long-term returns. While past performance is not a guarantee of future returns, these factors suggest that industrial properties may continue to be a strong investment sector with potential for good returns over the long term.

Why invest in Simply Industrial’s fund?

Simply Industrial is an industrial property fund that offers a low-cost, low-overhead, and diversified portfolio of industrial properties with a focus on long-term capital growth. The fund invests in multiple properties in different geographic locations, reducing the risk of any single property underperforming. Simply Industrial has a proven track record of performance since inception, and its management team has a history of successful property management over many years. Investors can buy shares in the company and become part of the property ownership, while enjoying the benefits of investing in a relatively safe growth and stable industry. The returns are similar to, or better than, a do-it-yourself approach, without the hassle of property management and with a lower capital outlay to enter. Overall, Simply Industrial is an excellent investment opportunity for those looking for a diverse industrial portfolio with proven management, low costs, and a focus on long-term capital growth.

What’s is the return? 

Simply Industrial is a commercial property fund that focuses on long-term asset gain, positive cash flow, and increasing dividends based on free cash flow. The estimated range for gross return is between 9-11% per annum, which includes taxable dividends and non-taxable asset value increase of the fund. The dividend reinvestment scheme is available for investors to receive their dividend as shares. Overall, the returns from Simply Industrial come from a combination of rental income and capital growth, with the rental income being generated from the rental of properties in the portfolio and the capital growth being the increase in value of the properties over time.

How can I  exit?

The exit strategy for Simply Industrial’s fund is similar to most other funds and includes several options. One option is to liquidate and return all funds to the shareholders by selling all of the properties in the fund and returning the proceeds to the investors. This is typically done when the fund reaches the end of its investment term. Another option is to merge or be acquired by another fund, which can provide investors with the opportunity to continue investing in the same asset class while potentially benefiting from economies of scale. A third option is to create a cash cow, where positive cash flow generated by the fund allows investors to stay invested for the long term. Other options include selling to a friendly individual or taking the fund public through an initial public offering (IPO). Ultimately, the decision on the exit strategy will depend on a variety of factors, including the fund's performance, market conditions, and the preferences of the investors.

What’s the risk?

Investing in an industrial commercial property fund, such as Simply Industrial, involves certain risks, including market risk, liquidity risk, and management risk. Market risk can arise from changes in economic conditions, interest rates, or supply and demand for commercial properties. Liquidity risk refers to the difficulty of selling the investment quickly if needed. Management risk arises from the decisions made by the fund managers’, which can impact the fund's performance. However, industrial real estate is generally considered a stable and safe investment sector. To mitigate these risks, Simply Industrial may have various risk management strategies in place, such as diversification of the portfolio, active property management, and ongoing analysis of market trends and conditions. Potential investors should carefully review these strategies and perform their own due diligence to make an informed investment decision. It may also be helpful to consult with a financial advisor to assess the suitability of the investment given their individual financial goals and risk tolerance. Refer to Simply Industrial’s Risk Mitigation section of its website.

With economic uncertainty is it a good time to invest in industrial?

Investing in industrial real estate during times of economic uncertainty can be a good long-term strategy, especially if the properties are well-located and have a strong tenant base. Industrial real estate tends to be less cyclical than other asset classes, as demand for industrial space is driven by factors such as global trade, e-commerce, and technological advances, rather than by consumer sentiment.

However, as with any investment, there are risks to consider. Economic downturns can impact the demand for industrial space, and changes in interest rates can affect financing costs.

If you are considering investing in industrial real estate, it is important to do your research and work with a team of professionals who have experience in the industry. A sound investment strategy and a long-term perspective are crucial for success in this asset class. Additionally, you should be prepared to weather short-term fluctuations and be willing to hold your investment for the long term in order to realise its full potential.

What are the fees? 

Simply Industrial has a competitive fee structure that prioritises the long-term increase in value of the fund. It is important for investors to carefully review the fee structure of any investment fund they are considering and assess how it may impact their overall returns. Simply Industrial’s fee structure is transparent and competitive, and investors should refer to the website for more information on the fees and how it may impact their investment returns. It is also important for investors to consider other factors such as the overall performance and potential risks of the fund before making a decision.

Can anyone invest?

Not everyone can invest in a commercial property fund like Simply Industrial. To invest in such funds, individuals must meet certain criteria to qualify as Wholesale investors under NZ's FMA regulations. It's crucial for investors to understand these regulations and seek professional advice to determine if they qualify to invest. Additionally, investors should carefully review the investment documentation and fully understand the risks associated with the investment before making any investment decisions.

Who managers our investment? 

Simply Industrial Property Management

The management of all properties is outsourced to Simply Industrial Management Limited, a separate entity which has a management agreement to run the properties and activities of the company.  The company will be responsible for all aspects of management and maintenance of the portfolio, including property procurement and its performance.

Simply Industrial Fund

The board of Directors together have long and varied experience in not just real estate investment, but business, property management, international banking and property accounting.

What is the minimum investment?

$250,000 (with increments of $25,000 above this).