ING OFFICE FUND. Annual General Meeting 31 October 2005 CREATING VALUE

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1 ING OFFICE FUND Annual General Meeting 31 October 2005

2 ING REAL ESTATE Global network A$97billion assets under management Asia / Australia North America USA Boston Philadelphia New York Seattle Washington DC 14 smaller offices Europe Europe The Hague Budapest Brussels Frankfurt London Madrid Milan Paris Prague Warsaw China South East Asia Beijing Shanghai Hong Kong Singapore Seoul Sydney Melbourne Brisbane Perth Australia ING Real Estate Offices PAGE 2

3 ING REAL ESTATE INVESTMENT MANAGEMENT The global business Country USA Europe Australia Asia Total No. of funds PAGE 3

4 ING REAL ESTATE INVESTMENT MANAGEMENT Australia Assets under management of over A$5.6 billion ING Office Fund ING Industrial Fund ING Retail Property Fund Australia ING Real Estate Community Living Fund ING Real Estate Entertainment Fund ING Real Estate Direct Office Fund ING Real Estate Income Fund $2.1 billion (listed) $2.0 billion (listed) $1.1 billion (wholesale) $300 million (listed) $185 million (listed) $ 27 million (unlisted) $ 20 million (unlisted) PAGE 4

5 12 MONTHS OF VALUE PAGE 5

6 12 MONTHS OF VALUE Key Fund data Total assets Properties Portfolio occupancy rate Average lease term Tax advantaged income Gearing Number of unitholders Unit price Jun 05 $2.1 billion 22 99% 5.4 yrs 39.4% 39.0% 30,873 $1.28 Jun 04 $1.6 billion 19 99% 5.6 yrs 37.2% 32.3% 32,657 $1.18 PAGE 6

7 12 MONTHS OF VALUE Returned 30 June % 11.2% 11.3% Income return Capital growth % 9.0% 9.2% Source: UBS * Annualised compound return yr 3 yrs* 5 yrs* PAGE 7

8 12 MONTHS OF VALUE Performed Net profit 16% to $106.4m Earnings per unit 5% to cpu Retained earnings $6.3m to $8.5m NTA 6 cents or 5% to $1.18 PAGE 8

9 12 MONTHS OF VALUE Acquired Homer Building, Washington DC (50%) Mitretek Systems HQ, Washington DC metro Computer Associates Plaza, Dallas metro Freehold interest 347 Kent Street, Sydney Purchase price US$ 105.2m US$ 92.8m US$ 53.5m A$ 29.3m Yield 6.5% 1 6.5% 8.0% 7.4% 1 minimum yield for first 3 yrs PAGE 9

10 12 MONTHS OF VALUE Leased & asset managed Leased 74,866sqm, representing 16% of the portfolio & $19.5m of income Repositioned 1 Adelaide Tce to extend lease term and diversify tenant base Extended ATO at Box Hill for 7 yrs until 2014 Secured Telstra & Air New Zealand over 9,564sqm at 151 Clarence Street Maintained long lease term of 5.4 years and high portfolio occupancy of 99% PAGE 10

11 12 MONTHS OF VALUE Earnings per unit Cents Jun-02 Jun-03 Jun-04 Jun-05 Jun-05 Normalised PAGE 11

12 PROPOSED ACQUISITIONS PAGE 12

13 THE TRANSACTION Summary 50% interest in Waltham Woods Corporate Center Boston Metro Additional 30% interest in The Homer Building Washington DC Average acquisition yield of 7.1% (before costs) Total acquisition price of US$128m (A$170.7m) before costs Acquired from ING Group related party transaction PAGE 13

14 THE TRANSACTION Quantitative benefits DPU 2% from 1 October 05 EPU 1% in first full year Introduces Boston to 4% Washington DC weighting to 16% US weighting to 31% PAGE 14

15 THE TRANSACTION Qualitative benefits Attractive acquisition yield in an international context Solid rental growth underway and forecast to continue Total return expectations in Boston/Washington DC amongst highest in US Assets amongst the highest quality within their respective markets Continues strategic expansion into key US markets with sound long term fundamentals PAGE 15

16 THE HOMER BUILDING Property details Purchase price (30%) Initial yield Type Occupancy Tenants Avg lease expiry Net rentable area US$63.0 million 6.5% Class A 100% 26 office & 6 retail 3.3 years 418,373 square feet PAGE 16

17 THE HOMER BUILDING The asset One of Washington DC s finest office buildings Outstanding location - 3 blocks from the White House and National Mall - situated over Metro Center (major rail commuter hub) - within retail and entertainment precinct Offers value add / leasing opportunity in short term Attractive guaranteed initial yield with strong growth prospects PAGE 17

18 WALTHAM WOODS CORPORATE CENTER Property details Purchase price (50%) Initial yield Type Occupancy Tenants Avg lease expiry Net rentable area US$65.0 million 7.6% Class A 99% 19 office 3.9 years 391,654 square feet PAGE 18

19 WALTHAM WOODS CORPORATE CENTER The asset Diversified base of investment grade tenants Achieves highest rents in submarket High average historical occupancy of 98% since 2000 Well located with access to major roads and proximity to Boston Property asset managed by ING Real Estate since 2000 PAGE 19

20 THE TRANSACTION Portfolio diversification Dallas 3% Boston 4% New York 8% Washington DC 16% Perth 2% Brisbane 11% Sydney 38% Canberra 4% Melbourne 13% PAGE 20

21 THE TRANSACTION Lease expiry by income 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1% 8% 10% 15% 13% 12% 42% Vacant FY06 FY07 FY08 Year ended FY09 FY10 FY10+ PAGE 21

22 THE TRANSACTION Summary Boosts earnings per unit and distributions per unit Introduces Boston Metro 5 th largest US office market to portfolio Further consolidates Homer Building ownership High quality and well regarded assets in respective markets Continues strategic expansion into key US office markets Increases US weighting to 31% PAGE 22

23 OUTLOOK AND STRATEGY PAGE 23

24 OUTLOOK AND STRATEGY Focus on largest US markets and gateway cities New York Washington DC Chicago Los Angeles Boston Dallas Houston Atlanta Philadelphia Size (mill sqm) PAGE 24

25 OUTLOOK AND STRATEGY Europe offers attractive returns and diversification benefits Country France Netherlands Spain Italy Belgium Major markets Paris, Lyon The Hague, Amsterdam Madrid, Barcelona Milan, Rome Brussels, Antwerp Size (mill sqm) PAGE 25

26 OUTLOOK AND STRATEGY Australian office market rental growth expected to improve US job growth to drive US office markets Total return outlook attractive in selective offshore markets European office markets provide attractive opportunities and returns PAGE 26

27 SUMMARY Solid and consistent performance Portfolio well positioned with little risk Commitment to drive earnings; - Active asset management / retention / leasing - Value add opportunities - Further offshore and local expansion Deliver distribution growth PAGE 27

28 FORMAL BUSINESS PAGE 28

29 RESOLUTION ONE Approval of related party acquisitions The acquisitions of a 50% indirect interest in Waltham Woods Corporate Center, Waltham Massachusetts and a further 30% indirect interest in the Homer Building, Washington DC from National Nederlanden Intervest II BV, an ING related company. Benefits of approval Increase the Fund s distributions per unit Improves Fund s future earnings and growth prospects Further diversifies the Fund into core US office markets PAGE 29

30 RESOLUTION TWO Approval of the proposed issue of stapled units ( units ) through an institutional placement The proposed placement of units to partly fund the acquisition of the interests in the two properties. Benefits of approval Maintains the Fund s 15% placement capacity Efficient and flexible method of raising capital - smaller discount / lower costs - short time frame Retail investors can invest through UPP PAGE 30

31 RESOLUTION THREE Approval of the amendments to the Constitutions Amendment of the Fund s Constitutions to vary the ability of the Funds to borrow and to distribute income and to address issues relating to the introduction of Australian equivalents to International Financial Reporting Standards. Benefits of approval Allows for funding flexibility and consistency Enables further natural capital hedging Required to ensure that unitholder equity in the Fund is not treated as debt in the accounts. PAGE 31

32 ING OFFICE FUND Thank you A copy of this presentation will be made available on Disclaimer: This presentation has been prepared by ING Management Limited, the Responsible Entity of the ING Office Fund. It is intended to provide a summary of the Fund's results for the financial year ending 30 June ING Management Limited believes the information to be correct, however makes no warranty as to the accuracy, reliability or completeness of the information. PAGE 32

33 RESOLUTION ONE Approval of related party acquisitions That the acquisitions of a 50% indirect interest in Waltham Woods Corporate Center, Waltham, Massachusetts and a further 30% indirect interest in the Homer Building, Washington DC from Nationale Nederlanden Intervest II BV, an ING related company be approved. PAGE 33

34 RESOLUTION TWO Approval of the proposed issue of stapled units ( units ) through an institutional placement That the proposed issue of 54 million units to institutional investors at an issue price of $1.33 on or about 3 November 2005 to partially fund the acquisition of the indirect interests in the two properties be approved. PAGE 34

35 RESOLUTION THREE Approval of the amendments to the Constitutions That amendments to the Constitutions of the fund set out in items 2 and 5 of the Schedule to the Supplemental Deed Poll Prime Credit Property Trust (ARSN ) ( PCP Supplemental Deed Poll ) and in item 2 of the Schedule to the Supplemental Deed Poll - Armstrong Jones Office Fund (ARSN ) (AJO Supplemental Deed Poll) tabled at the meeting and signed by the Chairman at the meeting for the purpose of identification be approved and that the Responsible Entity be authorised to execute the PCP Supplemental Deed Poll and the AJO Supplemental Deed Poll and lodge them with the Australian Securities and Investments Commission. PAGE 35

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