ING Property says portfolio value falls 8.3%

ING Property says portfolio value falls 8.3%

April 3 - ING Property Trust said the value of its portfolio was reduced by 8.3% after an independent assessment, reflecting softening yields and the prospect of smaller increases in rentals as the economy remains mired in recession.

The value of the portfolio was reduced by NZ$85 million to NZ$1.065 billion after the review by DTZ New Zealand, Colliers International, and Jones Lang LaSalle, ING said in a statement. The reduction includes the NZ$14 million loss taken at Sept. 30, it said.

The reduction mirrors falling portfolio values at other property trusts though the domestic market has fared relatively better than property investors in other parts of the world. The total equity market value of U.S publicly traded REITs had fallen to US$134 billion last month, from US$315 billion a year ago and US$400 billion in 2007, according to a Reuters estimate. The NZSE Property Group Index has declined 18% in the past 12 months.

“While it is clear that property around the world has shown a significant drop in value, New Zealand has been relatively less affected due, in part, to the more conservative starting position,” Peter Mence, general manager of ING Property Trust Management.

Units of ING Property gained 1.8% to 56 cents and have declined 14% this year, while the NZSE property index has fallen 11%.

Property sales in the past six months have been at an average 6% discount to the March 31, 2008, values, which provides confidence the current valuation reflects current market conditions, it said.

ING Property has a 98% occupancy rate, it said. The ration of debt to total assets was 39.2% as at March 31, below the 45% ceiling stipulated in its bank covenant.

(Businesswire)

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