ING Property Trust is blaming uncertainty about government policy on taxation of property for a reduction in the value of its properties.Negative property revaluations of $82.8 million and the close out of interest hedging arrangements caused the trust to
ING Property Trust is blaming uncertainty about government policy on taxation of property for a reduction in the value of its properties.
Negative property revaluations of $82.8 million and the close out of interest hedging arrangements caused the trust to report an unaudited after-tax loss of $53.9m in the year to March 31, 2010, compared to a loss of $63.1m for the previous year.
The unaudited profit before interest, tax and revaluations fell 12.6 percent to $67.7m.
Directors were of the view that the reduction in property valuations was at least in part influenced by the uncertainty created by the government review of taxation of the property sector.
The trust owns 81 buildings valued at $925.9m with more than 294 tenants. It sold 15 properties for a total $102.9m during the year.
The government is expected to clarify policy on the taxation of property in tomorrow's budget. There is speculation that it may reduce, or remove, depreciation of buildings and stop mechanisms that allow losses from property investment to reduce personal income, and therefore tax liabilities.
The trust confirmed an annual dividend of 7.5c per unit. The final quarter dividend of 1.875c per unit will be paid on June 18.
As at March 31, 2010, the trust's total assets were $950 million and debt was $381 million. The 40% debt-to-total-assets ratio remains below the trust deed limit of 50 percent and banking covenant level of 45 percent. The directors recently confirmed renewed banking arrangements for the next three year period. The new facility will use a syndicate of three banks headed by ANZ.
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