Although there was expected to be some opposition to the deal, none surfaced at the unitholder meeting in Auckland yesterday.
Under the deal the ING Trust will buy 71 properties from MFL Mutual Fund and SIL Mutual Fund. It will also acquire ANZ House from Domain Centre Developments.
Once completed the trust’s market capitalisation is expected to rise from $37 million to $232 million.
At the meeting the trust’s independent directors, Mike Smith, Peter Brook and Trevor Scott, described the proposed purchases are a major step forward in the development of trust and the fulfilment of its foundation objective to establish it as a leading New Zealand property fund.
The enlarged trust is projected to have a gross dividend yield of 11.2% in 2004 and 10.7% in 2005.
Its larger size is expected to increase a wider awareness of the fund by the investment community.
On the investment side the fund will have better diversification of the portfolio by asset class, rental income, buildings and geography reducing the property and tenant specific risks and increasing the liquidity of INGPT's property portfolio.
Also the trust’s gearing is expected to fall from 43% as at March 31 to a projected 32.8% at the end of March 2004.
ING Property Trust Management managing director Andrew Evans says that the over-renting factor in the MFL/SIL portfolio was negligible. He says there is potential to achieve rental growth in the combined portfolio through active management.
The net tangible asset backing per unit is projected to be $1.03 following completion of the acquisitions.
The ING Property Trust Management company is owned by ING and Symphony Investments.
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