Unitholders to see little of ING Trust's $91.4m gain

Chairman Mike Smith attributed boosted net profit to improved size, scale and diversity. Picture / Glenn Jeffrey

ING Property Trust has reported its single largest revaluation since it listed four years ago - the trust's total assets increased to $915.4 million, up from $356 million the previous year.

A gain on paper of $49.5 million was included in the bottom-line profit figures in yesterday's annual result.

ING boosted its net profit by 181 per cent to $91.4 million.

Chairman Mike Smith said this was because the trust improved its size, scale and diversity.

The trust listed in December 2002 with $57 million of assets and is the country's third-largest listed real estate entity after Kiwi Income Property Trust and Macquarie Goodman Property Trust.

Andy Evans, managing director of ING Property Trust Management, said the big increase in portfolio size came from the Urbus takeover and from the revaluations that resulted from excellent market conditions.

The trust also bought properties for $43.7 million in the last year but sold some. It owned 43 properties last year but now has 95. ING yesterday emphasised a new strategy to invest a small portion of assets in land.

"Because we have 350 tenants, they're asking us all the time to build for them so we're wanting to buy land to allow tenants to expand," Evans said.

The trust can buy $45 million of land, setting a threshold of 5 per cent of the total portfolio value.

Evans said despite the big profit lift, unitholders would get a slightly reduced distribution but would gain benefits from the much larger scale of the trust.

The trust's debt has soared, in line with growth. Borrowings rose from $88.9 million to $288.3 million but amounted to 31 per cent of assets, well within the 40 per cent limit set by the trust's rules.

Evans said the trust's portfolio would be re-moulded in the next year when some real estate would be sold.

Net asset backing per unit went up from 106.6c last year to 117c this year. Shares in ING Property yesterday closed at $1.18.