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ING Property Trust planned asset sales progressing

Thursday 9th July 2009

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ING Property Trust is more than a third of the way through its planned asset sales for 2009 after it sold a further two properties for a combined total of $17 million.

The trust has generated $37 million from asset sales since March 31, as it looks to cut back its $1.1 billion portfolio by $100 million in a move to reduce its debt. The sales of the Auckland and Wellington properties exceeded the book value of $15.7 million by 8.3%. That’s more than the 8.1% decline in its property value at the end of the financial year.  

“We are still seeing good demand for property of the size, nature and quality of those that the trust wishes to sell,” said general manager Peter Mence, in a statement.  

In May, the firm reported a $63.1 million loss as deteriorating portfolio values eroded the profitability of property investors, and reflected softer yields and smaller increases in rentals as the economy remains mired in a recession. Kiwi Income Property Trust, Kermadec Property Fund and Goodman Property Trust all announced a loss in full-year earnings, and the NZSE Property Group Index has slumped some 22% in the past 12 months.  

The trust’s units were unchanged at 63 cents today.  

One of the buildings sold, the Annie Huggan Grove building in Wellington, was the trust’s third best building in its retail portfolio, with a book value of $8.7 million, a passing yield of 9.55% and no vacant space at the writing of the annual report.  

In its 2008 annual report, it said companies that “have focused retail ownership on sound locations and good quality tenants should in the main continue to deliver solid rental returns.” 

ING Property also announced the extension of a banking arrangement for its North East Industrial joint venture in Palmerston North for an extra 18 months.

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