Chief Executive Officer of ING Office Fund, Tino Tanfara, said “The disposal of 412 St Kilda Rd is in keeping with the Fund’s capital management objective of reducing gearing and strengthening the balance sheet through initiatives such as selective asset sales. The transaction highlights the growing confidence by purchasers, with sales for well leased office assets occurring with more regularity and at cap rates and values materially better than those implied by current unit prices”.
The suburban office property located in Melbourne’s St Kilda precinct is 100% leased to the Victorian Police. The sale is due to settle on 31 July 2009 and will reduce the Fund’s gearing by approximately 0.5%.
Settlement proceeds will also provide the Fund with additional liquidity under its unsecured syndicated debt facility. As at 31 May 2009, the Fund has A$800million drawn under this facility reflecting undrawn liquidity of A$625million.
Management continues to work on a number of selective disposals across each of the Fund’s geographies. Although there is no certainty that these transactions will close, the Fund has terms agreed and is in documentation stage on an additional A$115million of asset sales in the short term.
NB: This property is reported in today’s AFR to have sold to North Melbourne property developers IGR Property Group, which has put together a syndicate of private investors.