Ing Fund Aiming To Raise $416m
Sydney Morning Herald
Friday April 25, 2008
ING INDUSTRIAL FUND is looking at raising $C400 million ($416 million) through the sale of its Canadian retail portfolio, brokers say.
The report comes as the fund this week refinanced a bridging loan with a $325 million unsecured syndicated facility at a slightly higher cost.It said it had struck a revolving multi-currency, three-year facility with ANZ Bank, ING Real Estate Finance and Westpac acting as lead arrangers.ING Industrial Fund's chief executive, Paul Toussaint, said credit conditions had changed but the fund had received good support. "This facility allows the fund to repay 100 per cent of short-term borrowings in Australia and reduces the level of the fund's overall refinancing commitments over the next two years to less than $175 million per annum," Mr Toussaint said. Goldman Sachs JBWere said that having refinanced in the short term, the next step was to reduce its gearing. "This could be partially achieved through the repayment of debt with proceeds from the sale of the Canadian retail portfolio, assuming it is successful," the broker said. "Management indicated that Canada would be the focus for development [because] land and construction costs are cheaper than in Australia." At home, the fund has said there will be greater emphasis on the rollout of existing developments and lease management, rather than further land acquisitions. In the first half of the 2007-8 financial year, 128,000 square metres of development was completed and leased at an average yield on cost of about 7.8 per cent. Mr Toussaint has said he expects the current second half to see less speculative development across the broader national industrial market. In the short to medium term, the fund will focus less on buying land here and focus more on lease management and a development rollout of about 120,000 sqm of projects in the 2008-9 year.One of the advantages for the fund is that the Canadian economy has become less tied to the US. Brokers say this is a big benefit given the fund's planned sale of its Canadian assets."About 50 per cent to 60 per cent of the fund's Canadian development pipeline is in Alberta, which is an oil- and resource-rich province. Management suggests that low vacancy and limited supply will lead to continued strong demand for new developments," Mr Toussaint said.
© 2008 Sydney Morning Herald