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IMP announces fourth quarter distribution, preliminary revaluation

Thursday, 31 July 2008

ING Medical Properties Trust today announced its fourth quarter distribution, the results of the 30 June 2008 property portfolio revaluation round, as well as an extension of the Trust’s existing debt facility.

Distribution

The Board of ING Medical Properties Limited, the manager of the Trust, is pleased to announce the payment of its fourth-quarter distribution to unitholders of 2.45 cents per unit for the three months ending 30 June 2008. This brings the total distribution for the year ending 30 June 2008 to 9.8 cents per unit, equating to an increase of 3.2% over the previous year’s payment.

The Trust’s final distribution for the quarter 1 April 2008 to 30 June 2008 of 2.45 cents per unit is made up of 2.21 cents per unit in cash and imputation credits of 0.24 cents per unit. The record date for the distribution will be 25 August 2008, and the payment date will be 1 September 2008.

Revaluation results

The 30 June 2008 annual revaluations were completed by independent valuers and are subject to the finalisation of the Trust’s annual audit. The property portfolio revaluation will be confirmed in the year end results, announced in late August 2008.

The independent property valuations completed as at 30 June 2008 show the aggregate value of the Trust’s portfolio at NZD$297.9m (as revised under NZ IFRS accounting rules) and reflects a split in the value of the New Zealand properties of NZD$192.9m and NZD$105.0m for the Australian properties.

The exchange rate over the financial year decreased from $0.91 on 30 June 2007 to $0.79 on 30 June 2008, and as a result the exchange rate gain on the carrying value of the Australian property assets is NZD$13.5m. This gain will be posted directly to reserves, which is partly offset by an increase in the carrying value of the Australian dollar debt of NZD$11.4m (of which NZD$4.1m is posted in the Income Statement and NZD$7.3m is posted to reserves).

In real terms, excluding the effect of currency movements, the portfolio on a ‘like for like’ basis has seen a slight decline of less than 0.5% of asset value, or NZD$1.4m. The revaluation result reflects a marginal softening in the aggregate portfolio capitalisation rate from 8.20% to 8.38% at 30 June 2008. However, this revaluation was largely offset by the CPI-linked rental growth provisions in many of the leases and the income certainty backed by the Trust’s weighted average lease term of 9.3 years.

David Carr, General Manager of ING Medical Properties Limited, the manager of the Trust said, “Recognising the current domestic and international economic uncertainties and difficult global trading conditions, this is a solid revaluation result and highlights the defensive nature of the health and medical property assets held by the Trust.”

“Notwithstanding the difficult financial and economic climate over the last 12 months, the preliminary valuation result is a great endorsement of the consistent income profile and stable nature of the Trust’s assets and the underlying growth in medical and healthcare services, which is further underpinned by the ageing populations of both New Zealand and Australia,” Carr continued.

Based on the unaudited preliminary results, the debt to total assets ratio is 35% and the adjusted net tangible asset backing is NZD$1.29 per unit (excluding allowance for deferred tax on revaluation gains).

Extension of bank debt facility

The Trust has also announced that it has extended the term of its existing debt facility, which will now expire on 31 March 2011. The existing drawn debt is 87% hedged by a number of interest rate swaps, with the first expiry not falling due until June 2009.

The Trust has also increased the size of its bank debt facility by NZD$35m, providing a total facility limit of NZD$135m. Jeremy Nicoll Chief Financial Officer of the Trust said, “The renewal of the facility is positive news as it shows that the bank, in a very tight global and local credit market, is willing to extend facility terms to proven, low risk entities with a stable track record, secure rental flows and a favourable and defensive future outlook.”

- ENDS -

 

 

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