ING Management Limited has seen tow of its property funds hit the jackpot with revaluations adding more than $100 million to office an industrial portfolios.
Yesterday ING Industrial Fund announced that independent valuations completed for the end of the financial year show that 16 properties located in New South Wales, Victoria, Queensland and South Australia have risen 9.3% or $60.9 million.
The 16 properties are now valued at $719.1 million, which represents around 27% of the total value of the IIF’s property portfolio.
The external revaluations increase IIF’s net tangible asset value by $0.07 per unit or 3.6%, to $2.00 per unit.
According to IIF, the 16 properties revalued provide a weighted average capitalisation rate of 7.30%, illustrating a general firming of market cap rates in the order of 0.25% since late 2005.
“These revaluations also show a commensurate firming in discount rates, with the weighted average of these 16 properties being 8.91%. This movement is consistent across all prime eastern seaboard industrial markets,” IIF chief executive Paul Toussaint concluded.
Meanwhile, there was good new on the ING Office front as well with six of its 23 properties revalued upwards by 6.7% or $42 million.
IOF’s net tangible asset backing increases by 4 cents to $1.32 per unit.
Accordng to IOF chief executive, Tino Tanfara, the increase, together with the 10 cent increase from the valuation results at 31 December 2005, has resulted in a 11.9% uplift to the Fund’s NTA from 30 June 2005.
The weighted average capitalisation rate of IOF’s property portfolio based on the independent valuations is 7.1%.
“Improved office market dynamics in most major office markets, together with significant cap rate compression is driving property values up and delivering significant NTA growth,” he added.
“This coupled with continued growing investor demand for quality office properties has been the catalyst for strong valuation results, both locally and in the US.”
IOF has gross assets of $2.4 billion, with a 31% weighting to the US, of which 24% is located in New York and Washington DC, the two largest and premier US office markets. The Fund has an average lease expiry profile of 5.0 years with minimal lease expiry risk in the short term and is included in the S&P/ASX 100 index.
By Ted McDonnell
