KEY POINTS:
Peter Mence has no qualms about rolling up his sleeves and getting down and dirty in the property business. The new boss of the $1 billion ING Property Trust knows buildings from the inside out - his weekend job lately has been restoring a derelict shearers' quarters at Port Albert in Kaipara, north of Auckland.
Andy Evans, who has run the trust for some years, was astonished to arrive one day to find Mence had stripped off the old roof, covered the place in tarpaulins and was perched on top, building a new roof.
Mence admits he is pleased with the restoration, saying he has added a veranda, stripped out walls, relined the interior and installed a woodburner. "We've turned it into something habitable," he says with pride.
The 1.4ha rural property has a large stand of pine trees but Mence and his wife Jenni, who live at Beach Haven Point with their son Sam, are planning extensive native plantings.
Mence, an engineer and keen runner, is also a classic car enthusiast and owns two prized Triumphs.
"I race the 1979 Triumph TR7 with limited success, getting up to 120 miles an hour [193km/h] on the back straight at Pukekohe," he said. He is also restoring a 1955 Triumph TR2: "It's an engineer's car - reasonably well put together and ... fix."
Lately, the quietly spoken Mence has had a little more on his mind than baches, trees or classic cars. This week, he became managing director of ING Property Trust Management, which runs the NZX-listed trust, owner of 97 buildings, landlord to 350 tenants and with a portfolio revalued up $77 million in the past year.
The Department of Internal Affairs is its top tenant, paying $2.3 million a year for its Wellington building, followed by retailer Bunnings, paying $2.1 million for an Auckland store at Ti Rakau Drive.
The trust listed in 2002 with a portfolio of just two Auckland office buildings. By June 2005, it had taken over Urbus Properties and now claims to be the country's most diversified listed real estate trust.
In appointing Mence, the trust boasted of his 26 years' experience in the property sector, including 14 years at ING, where he was most recently property services manager.
Mence, who has a degree in industrial thermodynamics, began his property career in 1981 when he joined supermarket chain Progressive Enterprises, working on refrigeration and airconditioning systems. But the business had "gaps to fill" so he quickly moved out of engineering and into broader property services, eventually becoming development manager.
Building the Greenlane Foodtown supermarket was a highlight because it ushered a new standard and style of supermarket into Auckland.
After Progressive, he shifted to Pace Property Group where he worked on several projects, including the concept plans for Highbury, Birkenhead's shopping centre. That was followed by a stint at real estate agency and consultancy CB Richard Ellis, where he was a property consultant and advised on management and development structures. It was there that Mence met Evans, although he shifted to ING when it was called Armstrong Jones, long before Evans moved.
Mence joined Armstrong Jones as a property investment manager then shifted into asset management and the property services division. "Because ING has grown so fast and decisively, there's always been something else to move into," he said.
Not all ING's growth plans have been welcomed. Unnamed institutional investors last month objected to its proposals to buy Japanese real estate, forcing the trust's management board to back down.
The feedback was that the trust had too much unfinished local business and shouldn't invest outside New Zealand, it said this week in its investor presentation, issued when it announced a $120 million after-tax profit, up on last year's $91.4 million.
Mence said he was not directly involved in the merger of the listed Calan Healthcare Properties Trust into ING, but the board was investigating the possible synergy benefits. A merger based on a scrip-for-scrip exchange of Calan units for ING units is on the cards and one way the trust could grow. ING already owns Calan's manager.
Mence said the trust had large property development holdings and big land banks. These are:
* The 70ha Manawatu Business Park in Palmerston North, in which the trust owns a half stake.
* A 4.8ha development site at Albany, which the trust bought from Symphony, half-owner of the trust's manager.
* An industrial development project at Pandora, Napier.
These projects offer big growth opportunities - $150 million potentially at Albany and $150 million to $200 million at Palmerston North.
The Manawatu Business Park could generate an extra $15 million annual rent if 400,000sq m of building was developed on a site alongside the airport, Mence said.
Forsyth Barr has endorsed the trust's growth strategy. This week, analyst Jeremy Simpson issued an "accumulate" recommendation on the stock, saying the property portfolio was low-risk, well-positioned and well diversified.
Although the March year net earnings were lower than expected because the trust had to pay more tax than forecast, it had pushed up its pre-tax earnings by 19 per cent and its portfolio was in strong shape, Simpson said. Tenant retention rates were high, its weighted average lease term was 7.4 years and the trust had negotiated 19 new leases in the past year.
The trust was aiming to invest up to $15 million annually on projects to add value and expected returns of up to 9 per cent on this capital, he said.
Mence was pleased to point to Simpson's approval.
But the man now heading a team of more than a dozen people in the trust's property division was not planning to carry on renovating his bach this weekend. His son's involvement in music was keeping the family close to home at Queen's Birthday.
Peter Mence
Managing director, ING Property Trust Management.
Age: 44.
Education: Birkenhead College and AUT.
Family: Married to Jenni. Their son, Sam, is 15.
Interests: Running, car-racing and restoring old cars.
