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Final Result, Investment Policy Revision


Auckland • Monday 22 May 2006

Name of Listed Issuer: ING PROPERTY TRUST
For Full Year Ended: 31 MARCH 2006
This report has been prepared in a manner which complies with generally accepted accounting practice and gives a true and fair view of the matters to which the report relates and is based on unaudited financial statements.


Net trading revenue: $61,023 (2005: $30,302)
Other revenue: $7,276 (2005: $4,327)
Total operating revenue: $68,299 (2005: $34,629)

Taxation on operating result: $2,999 (2005: $6,236)

OPERATING SURPLUS AFTER TAX: $41,885 (2005: $19,372)
Extraordinary Items: $Nil (2005: $Nil)
Unrealised net change in value of investment properties: $49,530 (2005: $13,126)

NET SURPLUS FOR THE YEAR: $91,415 (2005: $32,498)
Net Surplus attributable to minority interests: $Nil (2005: $Nil)

Earnings per share (per IAS 33): Diluted: 9.33 cpu
Final Dividend (gross): 2.4875 cpu
Record Date: 9 June 2006
Date Payable: 16 June 2006
Imputation tax credit on latest dividend: 0.00 cpu

ING Property Trust announces profit increase of 181%

Auckland (22 May 2006) – ING Property Trust (the “Trust”) today announced an unaudited after-tax profit of $91.4 million for the year to 31 March 2006 – a significant increase of 181% on last year’s after-tax profit of $32.5 million. The 2006 result includes property revaluations that added $49.5 million ($13.1 million in 2005) to the value of the portfolio.

A final gross dividend of 2.4875 cents per unit has been announced by the Trust; no imputation credits will be attached to the dividend. This brings the total gross dividend for the year to 9.95 cents per unit, comprising 9.39 cents per unit of cash and imputation credits attached of 0.56 cents per unit. The record date for the final 2006 dividend will be 9 June 2006 and payment to unitholders will be made on 16 June 2006.

The total assets of the Trust increased to $915.4 million, representing a 157% increase on the prior year from total assets of $356.0 million. The Trust’s property portfolio now comprises 95 properties and over 350 tenants. The level of borrowing by the Trust over the year increased from $88.9 million to $288.3 million. This resulted in a closing debt to total asset ratio of 31.5%, well within the Board’s policy of targeting an average debt to total asset ratio of 40% over the long term.

As a result of the largest ever revaluation gain experienced by the Trust ($49.5 million), the net asset backing per unit increased from 106.6 cents per unit at 30 September 2005 to 117.0 cents per unit at 31 March 2006. Independent property valuations were completed for all properties as at 31 March

2006. However, the valuation gains of $4.3 million from those properties identified for future disposal are excluded from the revaluation gain announced.

Chairman of the Trust’s Manager, ING Property Trust Management Limited, Mike Smith, said that over the past 12 months, the Trust had substantially improved its size, scale and diversity, at the same time further reducing its tenancy, lease expiry and income risks for investors.

“At the last Annual Meeting, it was announced that the Trust would be investing into land development opportunities. The Trust’s manager is progressing some growth opportunities in this area for the benefit of all unitholders.

“I am also particularly pleased with the proposed corporate governance changes announced in February 2006. The Trust has taken the lead in New Zealand for listed property trust governance. These include allowing unitholders to nominate and vote for the two independent directors on the Board of ING Property Trust Management Limited. Some of the changes require amendments to the trust deed, which will be voted on by unitholders at the 2006 Annual Meeting. These proposed amendments include a requirement to hold an annual meeting within a stipulated timeframe and to reduce from 10% to 5% the threshold for unitholders to have the right to require a meeting to be convened.”

Managing director, Andrew Evans confirmed that he is “extremely pleased” with the progress of the Trust in several key areas over the past 12 months.

“The Trust has had another outstanding result, in which it has met its projected returns and distributions for unitholders.”

Operating highlights for the Trust as at 31 March 2006 include:
Net profit after tax increased 181% to $91.4m
Net revenue increase 101% to $61.0m
Total assets increased $559.4m (157% increase) to $915.4m
Increased portfolio from 43 properties to 95 properties
Revaluation gain of $49.5m
Net asset backing increased from 106.6 to 117.0 cents per unit
Takeover of Urbus Properties Limited (“Urbus”) completed
Strategic 10.8% stake in Calan Healthcare Properties Trust acquired.

Portfolio rationalisation

Nine of the smaller and more mature assets were sold during the financial year achieving strong sale prices. These sales resulted in realised gains on disposal of $6.9 million after costs. Fifteen properties with a book value of $55 million remain on the ‘disposal’ list.


In addition to the takeover of the Urbus portfolio, nine properties were acquired over the period for a total of $43.7 million. These acquisitions included, a commercial office building at 8-14 Willis Street, Wellington for $13.1 million; a modern purpose-built coolstore facility at 1478 Omahu Road, Hastings for $9.5 million; a new four-unit bulk retail development in Maui Street, Hamilton for $8.6 million; and two neighbouring properties in Porirua, acquired as part of a longer-term scheme to complete a bulk retail development within the existing retail precinct. A brand new $17 million convenience retail centre with a food and service focus in Manukau City was also unconditionally acquired. Settlement will occur in June 2006 on practical completion of the building works.

Development activity

A strong focus on active lease and tenant management – and on improving the overall quality of the existing property portfolio – saw a number of building upgrades, refurbishments and redevelopments during the year. In the main, these improvements were completed in conjunction with new long-term leases, ensuring that the risk associated with completing new developments is limited.

Capital expenditure and committed capital for building upgrades and refurbishments totalled over $18.8 million for the year.

Leasing activity

Assisted by a strong leasing market, together with the quality and nature of the assets in the Trust’s portfolio, 64 lease transactions representing over 38,600 square metres were completed over the financial year.

The new leases helped maintain a strong portfolio occupancy level, which at year end measured 99.4%, the same level as the previous year. In addition, 93 rent reviews were completed, with an average rental increase of 6.6%. In total, additional rental income of $1.4 million was generated from the rent reviews and increased rents at lease renewal.

The portfolio’s weighted average lease term is slightly reduced at 4.8 years, compared with 5.0 years for the previous period. This is a very satisfactory statistic, recognising the breadth and depth of the portfolio as well as the highly diversified nature of the buildings, tenants and locations. The largest tenant in the portfolio accounts for only 4.1% of the total rental income.

The strong focus on active tenant and lease management resulted in an equally impressive tenant retention rate of 97%, with only three tenants leaving the portfolio over the past 12 months.

Urbus takeover

On 24 June 2005, the Trust announced that its takeover offer of Urbus Properties Limited had been successful, as acceptances had been received from security holders accounting for 94% of all of the Urbus securities on issue. This enabled the Trust to acquire all outstanding Urbus securities under the Takeovers Code. Urbus was delisted from the NZ Stock Exchange on 22 July 2005.

The addition of the extremely complementary Urbus portfolio resulted in the Trust becoming the second-largest listed property entity on the New Zealand Stock Exchange.


Looking forward, Mr Evans says the remoulding of the property portfolio through the rationalisation programme, once completed, will ensure the portfolio is well positioned for further strong and sustainable growth. The property portfolio is nearly fully occupied and, with only 7.9% of the leases in the portfolio due to expire over the next 12 months, occupancy levels should remain at their current high level.


Investment Policy

The Board of ING Property Trust Management Limited has today ratified a revision to the ING Property Trust’s (the “Trust”) Investment Policy. The revision will allow the Trust to invest in ‘land’ and to complete its own developments, but in a structure that reduces development risk for the Trust. No more than 5% of the portfolio value will be held in land development opportunities when the land is not income producing or when it is producing a less than commercial return.
The updated Policy is detailed below in full.

Investment Policy
The Trust’s investment policy is to invest primarily in a diversified portfolio of good-quality, well-tenanted properties and to actively seek to grow the income of the Trust through active management of the existing portfolio, including through single property and corporate acquisitions and acquisitions of land for future greenfields development.
Investment Strategies
As of the date of this Prospectus, the Manager has adopted the following investment strategies in order to achieve the Trust’s objective of providing the Trust’s Unitholders with appropriate returns.
• Active management philosophy: The Manager actively manages the Trust’s portfolio to ensure that the quality of the portfolio is maintained and, where possible, enhanced.
• Disciplined financial criteria: At all times, the overriding imperative of the Manager is to provide a return to the Trust’s Unitholders that adequately reflects the risks of the Trust’s portfolio and represents an appropriate return on capital.
• Diversification: The Manager will continue to develop a well-balanced diversified portfolio by actively reviewing the composition of the Trust’s portfolio (by use, type of building, tenants and location) to identify types of property that are under-represented in the portfolio.
• Focus investment on quality properties: Ideally, the Manager seeks acquisition opportunities involving new, recently refurbished and well-maintained properties, as these properties typically have reduced capital expenditure requirements and attractive cash flow characteristics.
• Value range: The Manager targets the acquisition of properties having a value between $10 million and $100 million. The Manager will also consider larger portfolio and corporate acquisitions and properties that have strategic benefit to the Trust.
• Land: The Manager aims to invest in land and complete its own developments, although in a structure that reduces development risk for the Trust. No more than 5% of the portfolio value will be held in land development opportunities when the land is not income producing or when it is producing a less than commercial return, at the time of purchase.


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