ING Property Trust had a swipe at property market pessimists yesterday, saying its portfolio is diversified and rents are rising.
ING told unitholders at the annual meeting that its unit price had been inappropriately discounted by the market. For investors "the income derived from the units at today'sprices is attractive".
"It's our view that the heavilydiscounted price will reverse in due course as the benefits of thediversification strategy of the trust are better recognised."
ING has revalued its property portfolio by $43 million because of increases in rents.
The trust's portfolio was assessed as being 6 per cent under market rentals at the end of the year.
"This means that further rental growth will be available in the year ahead. In the year to date, rental reviews have resulted in an increase to the trust's income of over $1 million.
"Many commentators have observed the potential for property values to ease over the year ahead, and clearly in times of economic change this cannot be ruled out.
"However, rental growth within the property portfolio, already evident since year end, provides at least a partial buffer to this pressure."
Current activity in the property market suggested that any softening in values in the trust's portfolio had been overcompensated for on the NZX.
"We have recently negotiated conditional agreements to sell assets - in excess of $60 million - at, or around, book value as at March 31."
The directors expect the cash distribution to be maintained at 8.7c a unit, barring any further significant economic events.
At a board meeting yesterday directors of ING Property Trust Management decided to reinstate the dividend reinvestment plan and confirmed that the cash distribution for the first quarter would be 2.175c a unit, with imputation credits of 0.417c a unit attached.
