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Chairman’s Address: Annual Meeting of ING MPT, 08

Chairman’s Address, Annual Meeting of ING Medical Properties Trust, 25 November 2008

The following is the address of the Chairman of the Manager of ING Medical Properties Limited for the ING Medical Properties Trust Annual Meeting held at Guineas 3 Room, Ellerslie Stand, Ellerslie Event Centre at 11.00 a.m. on Tuesday 25 November 2008.


Good morning ladies and gentlemen, and welcome to the 2008 Annual Meeting of ING Medical Properties Trust.

My name is Bill Thurston, and it is my pleasure to be addressing you today as the Chairman and Independent Director of ING Medical Properties Limited.

Proxies have been received from 242 unitholders holding 53,456,691 of units on issue and therefore representing over 10% of the number of units on issue.

I confirm that a quorum is present.

[Meeting process/agenda]

I declare the meeting open. The order of the meeting will be as follows:

1. First, I will give my address.

2. David Carr, General Manager, will then cover the activities of the Trust over the past 12 months, including the first quarter of the new financial year.

3. I will then invite you to ask any questions you may have regarding the Trust.

4. Following David’s address and any questions, we will move to the formal business of the meeting which is the voting and appointment of an independent director to the Board of ING Medical Properties Limited.

5. Lastly we will have General Business, to consider any other business that may properly be brought before the meeting.

6. At the conclusion of the meeting, there will be refreshments, which I invite all unitholders to enjoy with us.

I also point out that the minutes of last year’s annual meeting and the accounts of the Trust are available for inspection. Page 2


Before my address, I would like to take the opportunity to introduce my fellow Directors. To my left/right is, Graeme Horsley and to his left/right is Peter Brook and next to Peter is Andrew Evans.

I would also like to introduce the General Manager of ING Medical Properties Limited, David Carr, and the Chief Financial Officer and Company Secretary, Stuart Harrison.

Also present is Matthew Band from Trustees Executors, the Trustee of ING Medical Properties Trust (to stand up). And Andrew Burgess from Deloitte, the auditors for the Trust, who will review the voting process (to stand up).

[Executive summary]

ING Medical Properties Trust remains New Zealand’s only NZX listed specialist medical and healthcare property entity and has now established itself as a defensive, niche owner of property assets in a sector with solid underlying fundamentals.

At last year’s Annual Meeting I stated that the Trust was “well positioned” and that has proven true as undoubtedly the last 12 to 18 months have been one of the toughest financial and economic periods in recent history, with an almost unprecedented level of volatility in the global and local markets.

Whilst the Trust has not been totally immune from the impact of the global crisis, it has come through the year with a strong relative performance. Specifically, for the 12 months to 30 September 2008 Forsyth Barr Research shows that:

􀂃the NZX50 had a gross return of minus 26.2%;

􀂃the New Zealand listed property sector had a gross return of minus 15.3%;

􀂃comparatively, ING Medical Properties Trust was the leading listed property vehicle at minus 1.4%, with the next best performing listed property trust recording a minus 9.9% gross return.

This highlights the resilience of the Trust during these uncertain times and it continues to remain well positioned to see through the negative sentiment in the medium-term as core health sector demand drivers remain robust.

The Board and management team have been working very hard to ensure that the Trust remains conservatively positioned and retains its point of difference providing investors with a diversified and defensive medical and healthcare asset class within the New Zealand Listed Property sector.

It is periods like these when investors actively seek a property investment vehicle that has defensive attributes such as those exhibited by the Trust, including: Page 3

􀂃A quality, diversified property portfolio;

􀂃Strong tenant covenants;

􀂃Long (and market leading) weighted average lease term (that is, contracted rental income security);

􀂃Embedded rental growth;

􀂃Little or no development exposure;

􀂃High and improving occupancy levels and a low risk lease expiry profile;

􀂃A conservative gearing position in the current climate and a strong balance sheet; and

􀂃Strong corporate governance, an experienced management team and frequent unitholder communications.

Additionally, and importantly, the Trust has very little exposure to the retail, office and industrial sectors where it is expected that corporate and consumer discretionary spending will remain constrained for some time yet.

Notwithstanding the market gloom, through the year there has been a number of highlights for the Trust that management has continued to focus on to further strengthen and enhance the portfolio, including the settlement and leasing of Ascot Central and the completion of the Kensington Hospital extension.

Against the current market headwinds we remain very busy and continue to actively manage all aspects of the portfolio.

As previously advised, in addition to securing a major tenant for 713 square metres at Ascot Central and ESL Biosciences for 152 square metres at Eastmed St Heliers, we can also announce that we have now secured the Alcohol Advisory Council of New Zealand (ALAC), and a Women’s Health and rehabilitation practice at Ascot Central who have collectively committed to a further 500 square metres , taking Ascot Central’s occupancy to 73.5%

Allowing for all recent new lease commitments, the Trust’s portfolio occupancy is now 96.4%, up from 94.3% as at 30 June 2008, which is very good progress over the last few months considering the current economic climate. This reflects the fact that the Trust has quality assets that meet the demands of tenants currently active in the market, and this is particularly the case with medical tenants. We continue to receive a consistent level of lease enquiry, with Management expected to shortly confirm additional lease deals prior to the end of the year which will further improve portfolio occupancy levels.

As a result of these and various other asset management initiatives the net tangible asset backing of the Trust improved from $1.28 per unit as at 30 June 2007 to $1.30 Page 4

per unit as at 30 June 2008. This provides you, as investors, with the comfort that your investment is backed by tangible ‘bricks and mortar’ independently valued on an annual basis.

Not only was there a slight improvement in the Trust’s net tangible asset backing, but the total gross distribution for the year ended 30 June 2008 was 9.8 cents per unit, an increase of 3.2% from the 2007 distribution. The cash distribution component was also up 11.8% to 8.5 cents per unit on 2007.

Through the course of the year the Board and the Manager have closely monitored the financial and economic issues and global credit crisis facing us all and in the near term we continue to err on the side of caution in relation to the Trust’s gearing and financial position.

As at 30 June 2008 the Trust’s gearing was 34.9% and whilst the Board is generally comfortable with this level of gearing, with funds saved, following the re-introduction of the Distribution Reinvestment Plan being used to reduce debt.

As part of the overall prudent and cautious approach to the financial management of the Trust, earlier this year the Manager successfully extended the Trust’s existing bank facility through to March 2011 which provides investors with the peace of mind that the banking arrangements are in excellent order and that the bank fully supports the position, activities and treasury requirements of the Trust.

At last year’s Annual Meeting I undertook to provide unitholders with a much improved level of communication in relation to the activities of the Trust and this has been a key focus of the Manager over the course of the year.

In addition to the production of the annual and interim reports we also issued investor newsletters in December 2007 and June 2008 and David Carr held the highly successful investor roadshow in May 2008 in Whangarei, Auckland, Tauranga, Wellington and Christchurch. Due to the success of the roadshow it will be held again in 2009. The next investor newsletter will be sent out to unitholders before Christmas.

Also, the Trust’s new website is now up and running and I encourage you to have a look at as it will be regularly updated with details about the Trust, its properties, events, activities and other relevant information.

You may also recall that a number of improved corporate governance changes were voted on and approved by unitholders at the 2007 Annual Meeting, notably the amendment of the Trust Deed to incorporate the meeting provisions of listed companies. Other enhancements included the Trust and the Manager having different auditors and giving unitholders the ability to nominate and today, vote on the appointment of an independent director to the Board of the Manager. I’d also like to point out that the constitution of the Manager has also been amended to provide the Chairman with a casting vote in the event of an equality of voting by directors. Page 5


The local markets have not been immune from the flow-on effects of the global credit crisis and David will show you some charts in his presentation that paint a very bleak picture of the markets over the last 12 to 18 months. To ensure that the Trust continues to meet unitholders’ expectations over the near term, the Board and the Manager recognise that a cautious approach is required in these uncertain and volatile times.

I remain confident that the Trust is in a strong position and able to capitalise on the opportunities available in the medical and healthcare property sector, including continued discussions with a number of the Trust’s existing tenants regarding their future occupancy requirements.

All things being equal, the core portfolio is expected to perform well over the coming year and the Board envisages a cash distribution at least in line with the cash distribution for the 2008 financial year of 8.5 cents per unit.


In closing, I’d like to thank all unitholders for your continued support, and I confirm the Board and management remain fully focused in delivering the best possible returns for you.

I will now ask David Carr to present the Manager’s overview of the last 12 months including the first quarter of the current year. There will be opportunities for questions after David’s presentation.

[David to present]

[Bill to facilitate questions from the floor] - There are 2 microphones in circulation, so if you would like to ask a question please wait until you receive a microphone before stating your name and whether you are a unitholder or a proxy holder and asking your question.

[Business of Meeting]


The meeting has been called to consider the one Ordinary Resolution as set out in the Notice of Meeting. I summarise this now:

As outlined at the 2007 Annual Meeting of unitholders, the shareholders of the Manager have amended the Manager’s constitution to allow unitholders, at each year’s annual meeting, to vote on the nomination of a person to the office of independent director of the Manager. The nominee receiving the most unitholder votes will be appointed as an independent director of the Manager by the Manager’s shareholders, and will hold office for a two year term. This is a significant enhancement of unitholders’ involvement in the governance and management of the Trust.

This year, two nominations have been received by the Manager. The nominees to be voted on by the unitholders at the meeting are: Page 6

1. Mr Graeme Horsley (who is standing for re-appointment), and

2. Mr Steven Blakeley.

[Bill to ask Mr Horsley, then Mr Blakeley address unitholders]

Any questions of Mr Horsley or Mr Blakeley?

Voting will be undertaken by way of a poll. All unitholders may vote.

All unitholders (or their proxies or representatives) should have a voting paper. Is there anyone entitled to vote who does not have a voting paper?

[If there are any such people] – Could you please go to the share registrar’s desk at the entry and obtain a voting paper.

[pause while voting papers are obtained]

[when everybody is ready]

At the conclusion of the voting, please remain in your seats and the scrutineers will come and collect your voting papers from you.

The officials will now count the votes and the results will be sent to the New Zealand Stock Exchange later today.


Ladies and gentlemen, that concludes the formal business of the meeting and I formally declare the meeting closed.

I thank you for your attendance and participation and invite you to join us for some refreshments.


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