ING OFFICE FUND Annual General Meeting 31 October 2005 CREATING - - PowerPoint PPT Presentation

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ING OFFICE FUND Annual General Meeting 31 October 2005

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ING REAL ESTATE

ING Real Estate Offices

China South East Asia Europe North America Australia

Europe The Hague Budapest Brussels Frankfurt London Madrid Milan Paris Prague Warsaw

Global network – A$97billion assets under management

Asia / Australia Asia / Australia Beijing Beijing Shanghai Shanghai Hong Kong Hong Kong Singapore Singapore Seoul Seoul Sydney Sydney Melbourne Melbourne Brisbane Brisbane Perth Perth USA USA Boston Boston Philadelphia Philadelphia New York New York Seattle Seattle Washington DC Washington DC 14 smaller offices 14 smaller offices

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ING REAL ESTATE INVESTMENT MANAGEMENT

• No. of funds

Country 7 Australia 4 Asia 39 Total 16 Europe 12 USA

The global business

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ING REAL ESTATE INVESTMENT MANAGEMENT

Assets under management of over A$5.6 billion $ 27 million (unlisted) ING Real Estate Direct Office Fund $185 million (listed) ING Real Estate Entertainment Fund $300 million (listed) ING Real Estate Community Living Fund $ 20 million (unlisted) ING Real Estate Income Fund $1.1 billion (wholesale) ING Retail Property Fund Australia $2.0 billion (listed) ING Industrial Fund $2.1 billion (listed) ING Office Fund

Australia

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12 MONTHS OF VALUE

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12 MONTHS OF VALUE

32.3% 39.0% Gearing $1.18 32,657 37.2% 5.6 yrs 99% 19 $1.6 billion Jun 04 Jun 05 $1.28 Unit price 30,873 Number of unitholders 39.4% Tax advantaged income 5.4 yrs Average lease term 99% Portfolio occupancy rate 22 Properties $2.1 billion Total assets

Key Fund data

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12 MONTHS OF VALUE

Returned – 30 June 2005

Source: UBS * Annualised compound return

2 4 6 8 10 12 14 16 18 1 yr 3 yrs* 5 yrs*

17.4% 11.2% 11.3%

Income return Capital growth

8.9% 9.0% 9.2%

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12 MONTHS OF VALUE

Net profit 16% to $106.4m Earnings per unit 5% to 10.85 cpu Retained earnings $6.3m to $8.5m NTA 6 cents or 5% to $1.18

Performed

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12 MONTHS OF VALUE

Acquired

7.4% A$ 29.3m Freehold interest – 347 Kent Street, Sydney 8.0% US$ 53.5m Computer Associates Plaza, Dallas metro 6.5% US$ 92.8m Mitretek Systems HQ, Washington DC metro 6.5%1 US$ 105.2m Homer Building, Washington DC (50%) Yield Purchase price

1 minimum yield for first 3 yrs

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12 MONTHS OF VALUE

Leased 74,866sqm, representing 16% of the portfolio & $19.5m of income Repositioned 1 Adelaide Tce to extend lease term and diversify tenant base Extended ATO at Box Hill for 7 yrs until 2014 Secured Telstra & Air New Zealand over 9,564sqm at 151 Clarence Street Maintained long lease term of 5.4 years and high portfolio occupancy of 99%

Leased & asset managed

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12 MONTHS OF VALUE

Cents

5.21

Earnings per unit

9.0 9.2 9.4 9.6 9.8 10.0 10.2 10.4 10.6 10.8 11.0

10.33 10.12 10.85 9.98

Jun-02 Jun-03 Jun-04 Jun-05

10.51

Jun-05 Normalised

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PROPOSED ACQUISITIONS

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THE TRANSACTION

50% interest in “Waltham Woods Corporate Center” – Boston Metro Additional 30% interest in “The Homer Building” – Washington DC Average acquisition yield of 7.1% (before costs) Total acquisition price of US$128m (A$170.7m) before costs Acquired from ING Group – related party transaction

Summary

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THE TRANSACTION

DPU 2% from 1 October 05 EPU 1% in first full year Introduces Boston to 4% Washington DC weighting to 16% US weighting to 31%

Quantitative benefits

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THE TRANSACTION

Attractive acquisition yield in an international context Solid rental growth underway and forecast to continue Total return expectations in Boston/Washington DC amongst highest in US Assets amongst the highest quality within their respective markets Continues strategic expansion into key US markets with sound long term fundamentals

Qualitative benefits

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THE HOMER BUILDING Property details

6.5% Initial yield US$63.0 million Purchase price (30%) 418,373 square feet Net rentable area 3.3 years Avg lease expiry 26 office & 6 retail Tenants 100% Occupancy Class A Type

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THE HOMER BUILDING The asset

One of Washington DC’s finest office buildings Outstanding location

• 3 blocks from the White House and National Mall
• situated over Metro Center (major rail commuter hub)
• within retail and entertainment precinct

Offers value add / leasing opportunity in short term Attractive guaranteed initial yield with strong growth prospects

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WALTHAM WOODS CORPORATE CENTER Property details

7.6% Initial yield US$65.0 million Purchase price (50%) 391,654 square feet Net rentable area 3.9 years Avg lease expiry 19 office Tenants 99% Occupancy Class A Type

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WALTHAM WOODS CORPORATE CENTER The asset

Diversified base of investment grade tenants Achieves highest rents in submarket High average historical occupancy of 98% since 2000 Well located with access to major roads and proximity to Boston Property asset managed by ING Real Estate since 2000

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THE TRANSACTION

Dallas 3% Washington DC 16% New York 8% Sydney 38% Canberra 4% Brisbane 11% Perth 2% Melbourne 13% Boston 4%

Portfolio diversification

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THE TRANSACTION Lease expiry by income

1% 8% 10% 15% 13% 12% 42%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% V a c a n t F Y 6 F Y 7 F Y 8 F Y 9 F Y 1 F Y 1 + Year ended

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THE TRANSACTION

Boosts earnings per unit and distributions per unit Introduces Boston Metro – 5th largest US office market to portfolio Further consolidates “Homer Building” ownership High quality and well regarded assets in respective markets Continues strategic expansion into key US office markets Increases US weighting to 31%

Summary

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OUTLOOK AND STRATEGY

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OUTLOOK AND STRATEGY Focus on largest US markets and gateway cities

Size (mill sqm) 9 Philadelphia 11 Atlanta 12 Houston 13 Dallas 14 Boston 16 Los Angeles 20 Chicago 23 Washington DC 38 New York

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OUTLOOK AND STRATEGY

Size (mill sqm) Major markets Country 13 Brussels, Antwerp Belgium 18 Milan, Rome Italy 18 Madrid, Barcelona Spain 10 The Hague, Amsterdam Netherlands 52 Paris, Lyon France

Europe offers attractive returns and diversification benefits

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OUTLOOK AND STRATEGY

Australian office market rental growth expected to improve US job growth to drive US office markets Total return outlook attractive in selective offshore markets European office markets provide attractive opportunities and returns

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SUMMARY

Solid and consistent performance Portfolio well positioned with little risk Commitment to drive earnings;

• Active asset management / retention / leasing
• Value add opportunities
• Further offshore and local expansion

Deliver distribution growth

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FORMAL BUSINESS

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RESOLUTION ONE

The acquisitions of a 50% indirect interest in Waltham Woods Corporate Center, Waltham Massachusetts and a further 30% indirect interest in the Homer Building, Washington DC from National Nederlanden Intervest II BV, an ING related company. Benefits of approval Increase the Fund’s distributions per unit Improves Fund’s future earnings and growth prospects Further diversifies the Fund into core US office markets

Approval of related party acquisitions

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RESOLUTION TWO

The proposed placement of units to partly fund the acquisition of the interests in the two properties.

Benefits of approval Maintains the Fund’s 15% placement capacity Efficient and flexible method of raising capital

• smaller discount / lower costs
• short time frame

Retail investors can invest through UPP

Approval of the proposed issue of stapled units (“units”) through an institutional placement

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RESOLUTION THREE

Approval of the amendments to the Constitutions Amendment of the Fund’s Constitutions to vary the ability of the Funds’ to borrow and to distribute income and to address issues relating to the introduction of Australian equivalents to International Financial Reporting Standards.

Benefits of approval Allows for funding flexibility and consistency Enables further natural capital hedging Required to ensure that unitholder equity in the Fund is not treated as debt in the accounts.

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ING OFFICE FUND Thank you

Disclaimer: This presentation has been prepared by ING Management Limited, the Responsible Entity of the ING Office Fund. It is intended to provide a summary of the Fund's results for the financial year ending 30 June 2005. ING Management Limited believes the information to be correct, however makes no warranty as to the accuracy, reliability or completeness of the information.

• A copy of this presentation will be made available on

www.ingrealestate.com.au/investment

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RESOLUTION ONE

“That the acquisitions of a 50% indirect interest in Waltham Woods Corporate Center, Waltham, Massachusetts and a further 30% indirect interest in the Homer Building, Washington DC from Nationale Nederlanden Intervest II BV, an ING related company be approved.”

Approval of related party acquisitions

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RESOLUTION TWO

“ That the proposed issue of 54 million units to institutional investors at an issue price of $1.33 on or about 3 November 2005 to partially fund the acquisition of the indirect interests in the two properties be approved.”

Approval of the proposed issue of stapled units (“units”) through an institutional placement

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RESOLUTION THREE

Approval of the amendments to the Constitutions

“That amendments to the Constitutions of the fund set out in items 2 and 5 of the Schedule to the Supplemental Deed Poll – Prime Credit Property Trust (ARSN 090 242 229) (“PCP Supplemental Deed Poll”) and in item 2 of the Schedule to the Supplemental Deed Poll - Armstrong Jones Office Fund (ARSN 089 849 196) (AJO Supplemental Deed Poll) tabled at the meeting and signed by the Chairman at the meeting for the purpose of identification be approved and that the Responsible Entity be authorised to execute the PCP Supplemental Deed Poll and the AJO Supplemental Deed Poll and lodge them with the Australian Securities and Investments Commission.”