ING Real Estate Entertainment Fund has delivered a lower operating income of $8.4 million for FY11 down 12% from $9.5 million in FY10, as rents continue to fall and finance costs increase.
However the statutory loss was $21.1 million, which is an improvement from the loss of $52.7 million for the previous year.
IEF CEO Daniel Hargraves said the last 12 months has centred on balance sheet improvement and the review of strategic options with regards to a new operating structure.
He added that substantial work was undertaken towards lowering debt levels via an equity raising and asset sales, with total debt reducing to $122.6 million from $221.7 million, gearing was reduced from 68.6% to 47.3%1 during the period.
Total assets at 30 June 2011 were $235.6 million, down from $323.4 million primarily due to a net loss on property revaluations of $24.4 million and asset sales of $64.4 million. Net asset value per unit of 17 cents compared to 49 cents at 30 June 2010 was a result of negative property revaluations and the dilutive impact of the equity raising in August 2010.
Hargraves said trading conditions remain challenging and IEF continues to work with key tenants to improve operating businesses and asset values.
One of its major tenants, Icon Hospitality Management continues to operate under the receivers appointed by its secured lenders. Lease obligations are continuing to be met whilst the receivers operate the hotel businesses.
Looking ahead, Hargraves said reinstatement of distributions remains a key objective as the fund did not pay a distribution for FY11.
Australian Property Journal
