3 0 JUNE 2 0 0 7 ANNUAL RESULTS [ Photo title position - Clayton - - PDF document
3 0 JUNE 2 0 0 7 ANNUAL RESULTS [ Photo title position - Clayton to delete] I NG OFFI CE FUND 29 August 2007 PRESENTERS Speakers Ben Brayshaw Valentino Tanfara Assistant Fund Manager CEO ING Office Fund ING Office Fund International
[ Photo title position - Clayton to delete]
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Ben Brayshaw Assistant Fund Manager ING Office Fund Valentino Tanfara CEO ING Office Fund Philip La Pierre Director Acquisitions ING Real Estate Europe
Hans Copier Fund Manager ING Dutch Office Fund/ Country Manager Netherlands Rob Greer Portfolio Manager ING Clarion US
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388 George Street, Sydney
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(1) Source: UBS
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2 0 0 7 2006 Change Distributable Income(1) $ 1 2 4 .3 m $111.7m 11% Distributable income per unit (1) 1 0 .8 c 10.7c 1% Distributions (Headline) Distributions (Normalised) 1 1 .5 c(2) 1 0 .5 c(3) 10.3c 10.3c 12% 2% Retained earnings $ 1 4 .0 m $11.8m $2.2m Net asset value per unit (4) $ 1 .7 3 $1.39 24%
(1) Excludes: revaluation of investments and derivatives, profit on sales and rental straight lining (2) Includes special distribution of 1.0cpu (3) Excludes special distribution (4) I ncludes provision for deferred income tax
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5 .2 1
10 10.1 10.3 10.8 10.7 10.8 9.0 9.2 9.4 9.6 9.8 10.0 10.2 10.4 10.6 10.8 11.0 2002 2003 2004 2005 2006 2007 10.5
Note: 2005 headline result includes one-off lease termination payment of 0.3 cpu
10.0
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June 2 0 0 7 June 2006 Total assets (look through) $ 3 .5 b $2.6b Gearing (look through) 3 7 .6 % 39.4% Interest coverage (look through) (1) 2 .9 x 3.0x Number of unitholders 2 8 ,6 6 4 29,833 Overseas ownership 1 6 % 4% Average lease duration 5 .5 years 5.9 years Average portfolio cap rate 6 .2 % 6.7%
(1) Distributable income and interest expense (look through) divided by interest expense (look through)
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(1) 49% ownership (2) 80% ownership (3) 50% ownership
Acquisition date Acquisition price Previous valuation Current valuation 900 Third Avenue New York (1) Aug 03 US$108m US$142m US$245m 72% Homer Building Washington DC(2) Apr 05 US$168m US$168m US$212m 26% Waltham Woods Boston(3) Nov 05 US$65m US$65m US$76m 17% Hitachi Complex Brisbane Jul 98 A$82m A$133m A$193m 45% Australian Gov. Centre Brisbane May 98 A$103m A$225m A$315m 40%
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Tenant Property Area ( sqf) Old rent ( $ sqf) New rent ( $ sqf) Amgen Homer Building Washington D.C. 76,866 $41n $45n 10% Zweig 900 Third Avenue New York 45,000 $49g $64g 30% Cole Schotz 900 Third Avenue New York 17,800 $53g $65g 23% Spear, Leeds, Kellogg 900 Third Avenue New York 16,120 $42g $56g 33% Permal Group 900 Third Avenue New York 11,481 $53g $64g 21%
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Tenant Property Area ( sqm ) Old rent ( $ sqm ) New rent ( $ sqm ) Lycopodium 1 Adelaide Tce. Perth 5,910 $179n $325n 82% Criminal Justice
Brisbane 5,821 $377g Mkt (Apr 08) Est $550+ 46% Corporate Solutions Hitachi Complex Brisbane 2,958 $307g Mkt (Dec 07) Est $500+ 63% State of Queensland Hitachi Complex Brisbane 2,619 $314g $415g 32% DFAT
Brisbane 1,211 $300g $450g 50% Maple Brown 10-20 Bond Street Sydney 1,039 $545n $545n
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Previous facilities(1) New m ulticurrency facility (1) CMBS $408m Multi currency facility $89m ING Dutch Office Fund facility $248m $977m NVH facility $119m Computer Associates/ Noblis facility $113m Drawn $977m $977m Additional capacity $111m $448m
(1) At date of refinance
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Neuilly Victor-Hugo Building, Paris
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The Netherlands 15% Paris 4% Prague 2%
New York New York New York New York New York New York New York New York
New York 8%
Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C.
Washington D.C. 11%
Bangkok Bangkok Bangkok Bangkok Bangkok Bangkok Bangkok Bangkok Seattle Seattle Seattle Seattle Seattle Seattle Seattle Seattle
Dallas 2%
Melbourne 10% Sydney 28% Brisbane 15%
Boston 3%
Canberra 2%
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0% 2% 4% 6% 8% 10% 12% 14% Vacant FY08 FY09 FY10
1 % NVH 1 % 1 1 1 Pac. 1 % DOF 1 % Kroll
900 Third Ave.
1 % Custom s
1 % AMP
151 Clarence St.
1 % Child Support
1 % Telstra
151 Clarence St.
1 % Tennem baum
900 Third Ave.
4 % MBL
10-20 Bond St.
4% 7% 8% 13%
Other
2 % DEST
16-18 Mort St.
2 % BMC
Waltham Woods
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4 1% 4 9 % 18 % 18 % 15% 2 1% 16 % 2 0 % 2 0 % 3 7% 2 2 % 2 3 %
0% 20% 40% 60% 80% 100% FY08 FY09 FY10 Fixed CPI Market No Review
8% Sydney 5% Aust. Other 4% Brisbane 4% US 1% Europe 9% Sydney 4% Aust. Other 4% US 3% Brisbane 1% Europe 8% Sydney 3% Brisbane 2% US 2% Europe 1% Aust. Other
► Structured increases reflect average grow th of 3 .6 % fixed and 2 .2 % CPI
Source: ING Real Estate
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Currency I nterest rates € US$ € US$
Pct hedged Rate Pct hedged Rate Pct hedged Rate (1) Pct hedged
3.9% 97% 84% 77% 67% 44% 3 .8 yrs 3.9% 3.9% 3.9% 3.9% 3 .9 %
Rate (1) FY0 8
100% 0.62 100% 0.69 100% 4.3%
FY0 9
100% 0.59 100% 0.69 100% 4.5%
FY1 0
100% 0.57 100% 0.69 100% 4.5%
FY1 1
100% 0.54 100% 0.69 100% 4.9%
FY1 2
100% 0.52 100% 0.69 90% 5.0%
5 .0 yrs 0 .5 6 5 .0 yrs 0 .6 9 5 .9 yrs 4 .6 %
(1) Excludes margins
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World Trade Centre Zuidplein, Amsterdam
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150 250 350 450 550 650 750 850 Madrid Barcelona Paris Munich Frankfurt Berlin Amsterdam Brussels Milan Prague Warsaw Stockholm
€ sqm
2005 Q4 2007 Q2
Early up turn phase
Source: PMA Spain France Italy Neth. Germany Poland
Sweden Belgium
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Madrid Paris Milan Amsterdam Munich Frankfurt Barcelona Warsaw Prague Brussels Berlin
Prim e Yield (1) Rental Grow th 0 7 -0 9 p.a. ( f) (2) Madrid 3.5% 14% Barcelona 3.5% 6% Stockholm 4.0% 11% Paris 4.0% 14% Milan 4.5% 3% Amsterdam 4.5% 6% Munich 4.5% 10% Frankfurt 4.5% 10% Warsaw 5.0% 3% Prague 5.0% 3% Brussels 5.0% 4% Berlin 5.0% 3% ► Robust above inflationary grow th forecast for next 2 / 3 years in m ost m arkets ► Mature m arkets in early recovery phase offer strongest total returns, after risk adj.
Stockholm
(1) PMA June 2007 and rounded to nearest 0.5% (2) ING Real Estate
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3.3% 6.0% 7.3% 7.2% 6.5% 5.9% 4.8% 0.8%
0% 2% 4% 6% 8% 10%
2000 2001 2002 2003 2004 2005 2006 2007
Pct of stock Net additions Net absorption Vacancy rate Paris CBD La Defense Neuilly
Source: PMA
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Source: ING Real Estate, PMA, Jones Lang LaSalle
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Source: Jones Lang LaSalle
27 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2005 Q4 2007 Q1 2005 Q4 2007 Q1 2005 Q4 2007 Q1 2005 Q4 2007 Q1
Class A Class B & C
Amsterdam Rotterdam Utercht The Hague
17.7% 13.3% 8.6% 8.1% 7.2% 5.1% 10.5% 12.3% Source: ING Real Estate and Jones Lang LaSalle
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Source: ING Real Estate
► I m provem ents recorded in key m etrics W ALE , occupancy and over-renting ► Solid retention rate of 7 3 % over 1 0 3 ,0 0 0 sqm for H1 CY0 7 leasing ( 1 5 % of portfolio)
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1% 3% 5% 7% 9% 11% 13% 15% 5 yr ave. 3 yr ave. 2005 2006 2007* Income Capital growth 8.0% 8.5% 8.6% 11.9% 5.4% (6 month return)
* 6 month return to 30 June 2007 net of mgt fee charged at fund level Source: ING Real Estate
► Good H1 CY 2 0 0 7 return reflect im proving m arket fundam entals
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Value Status I ndividual disposals: Marten Meesweg 50, Rotterdam €18m Sold H1 CY07 Daltonlaan 700, Archiparc Gebouw C, Utrecht €5m Sold H1 CY07 Wilhelminalaan 9, Wilhelminastaete, Utrecht €10m Sold H1 CY07 Telepoort Boulevard 120, Amsterdam €23m Sold H1 CY07 Portfolio sale: €70m Sold H1 CY07 Europalaan 44, Europastaete, Utrecht Siriusdreef 10, Aquarius, Hoofddorp Meander 901, Rivage, Arnhem Tupolevlaan 66-79, Cumulus, Haarlemmermeer Portfolio sale: €14-24m Pending H2 CY07 J.C. van Markenlaan 5, Bogaardstaete, Rijswijk Baarnsche Dijk 8, Baarn
Total/ ave. € 1 4 0 -1 5 0 m proceeds at approx. 6 .7 % net yield
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Cost Net Yield ( on cost) Status Developm ent Archiparc, Utrecht €7m 7.5% Pending Q3 CY ‘07 Vivaldi/ E&Y HQ, Amsterdam €110m 7.1% Pending Q3 CY ‘07 Acquisition Nil Total/ avg. € 1 1 7 m at approx. 7 .1 % net yield
Archiparc,Utrecht Vivaldi, Amsterdam
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The Homer Building, Washington DC
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Cap rate (1) Vacancy rate (2) Washington DC 5.0% 7.5% New York 4.5% 4.4% Boston 5.0% 9.3% San Francisco/ Bay Area 5.5% 8.5% Los Angeles 5.7% 8.9% Orange County 5.5% 12.1% San Diego 5.4% 12.7% Seattle 6.0% 12.6% ► All m arkets are characterized by rising rents, econom ic grow th,
Source: 1. ING Real Estate. 2. CBRE, TWR & Property and Portfolio Research
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