KEY POINTS:
Strong tenant demand and the rising fortunes of the real estate sector pushed up net profits for the $1 billion ING Property Trust by 32 per cent and its managers are predicting more growth.
Andy Evans, managing director of the trust's manager, which this month backed out of buying into Japanese real estate, said the trust had enough diversity to undertake expansion works which would add huge value.
Evans is stepping back from the trust which said yesterday property services manager Peter Mence would take over.
"Evans will take a step back from the day-to-day running of the trust to focus more on the development of ING's overall real estate investment and management business," the trust said yesterday in releasing the annual result.
This month institutional investors had taken fright at the idea of pouring money into Japan and made their views known to the trust which wanted to buy property there.
"Despite the recognition of the enhanced returns this strategy was projected to deliver, some unitholders were of the view that the additional risk of offshore investment did not justify the investment," the trust said.
But the trust had not turned its back on buying overseas.
"After reviewing all feedback, the board of the manager determined to defer offshore investment by the trust."
Evans said the trust was still monitoring various overseas markets but he refused to name any particular countries.
The trust made $121 million net after-tax profit for the year to March 31, 2007, up from last year's $91.4 million.
The value of its portfolio set a new record, rising $77.6 million compared with $49.6 million last year.
The trust's manager said property fundamentals in New Zealand remained compelling and there was little evidence of exuberance or over-building in any particular area.
Building vacancy levels in most sectors were at historic lows which allowed rent increases.
