KEY POINTS:
New Zealand property investor ING Property Trust said today it was looking to spend up to NZ$200 million ($144 million) in an expansion into Japan, in a bid to find growth and higher returns.
The company, New Zealand's fourth biggest listed property investor by capitalisation, said New Zealand property prices have been rising, but yields have been falling.
"It is increasingly challenging to acquire quality individual properties or portfolios at prices that will be accretive to unitholders' returns," ING said in a statement.
It said investment in international markets, using ING's global real estate group, offered the best means of increasing returns.
Japan had been identified as a prime target because its economy was growing, leading to higher rentals and yields, while the cost of capital was relatively low.
"Japan also represents one of the most attractive markets as measured by the spread between interest rates and property yields," ING said.
The company said its move into the Japanese market would be measured and controlled, with a portfolio built up over time.
ING Property has a portfolio of 95 commercial, retail and industrial properties throughout New Zealand worth NZ$922 million as at Sept. 30 2006.
Shares in ING last traded down 1.5 per cent or two cents at NZ$1.32. Over the past year it has traded between NZ$1.14 and NZ$1.36.
- REUTERS
