How the big boys do it!

ING Real Estate Community Living Fund (ILF) today announced they have entered into separate contracts to acquire student accommodation properties in Wellington, New Zealand for $28.1 million and a 30% interest in Country Club Villages Pty Limited, a private developer, owner and operator of retirement villages in Australia, for $23.5 million.

The company said the acquisition of three New Zealand student accommodation properties represented the Fund’s first Australasian student accommodation acquisition and first step to becoming a market consolidator in this sector in Australia and New Zealand.

ING Real Estate said the New Zealand student portfolio was being acquired on a pre-cost initial yield of 9.5% and was expected to exhibit long term growth of 3.0%. The Country Club Villages was being acquired on a forecast average three year income yield of 12.1% and was expected to provide “strong” income growth for the Fund, particularly in 2009 and 2010.

The property trust fund noted they would enter into an agreement with Campus Living Villages to operate the assets.

The company said the acquisition of a 30% interest in Country Club Villages represented the Fund’s first acquisition of retirement villages operated under the Deferred Management Fee model.

CEI Mr Ian Muir stated on completion of these acquisitions and the current development pipeline, the Australasian weighting of the Fund would increase to 42%.

The Fund indicated the properties were situated in the Central Business District of Wellington and provided accommodation for students of The Victoria University of Wellington and indicated the assets were currently 100% occupied.

At 1436 AEST shares were unchanged at $1.16.

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Westpac buys $100 million worth of property
4/04/2006 By: Phoebe Ash

Westpac Funds Management Limited (“WFML”), under Westpac Banking Corporation (WBC), today announced it had purchased $100 million worth of residential property from the Defence Housing Authority (“DHA”). WFML noted they would use these properties as the seed asset for a new residential property trust, which is expected to be the first Australian Residential Real Estate Investment Trust (“REIT”).

The company noted the properties would be leased back to the DHA under long term leases and would be used by the DHA to provide housing to families of the Defence Forces.

General manager of Westpac’s Specialised Capital Group Mr Sean McElduff said they planned to seek other assets to build this portfolio as the company prepares the offer to the market, which is expected to be completed by the end of 2006.

“Residential REITs are a well developed asset class in the US and we believe that such an offer will be well received by Australian investors. In Australia, this investment class has only been available through direct investment,” he said.

The banking franchise noted that DHA had an “extensive” portfolio of residential property, managing approximately 17,000 residences in all states and territories of Australia.

The company indicated direct leasing from local markets is down and would not produce the required number and quality of properties and thus, in order to meet all its provisioning requirements, DHA has an acquisition and construction program.

Under the terms of the agreement with WFML, the company said DHA would manage the properties, ensuring that each property is maintained, both internally and externally, at a standard that reflected contemporary community standards.