3 0 JUNE 2 0 0 7 ANNUAL RESULTS [ Photo title position - Clayton to delete] I NG OFFI CE FUND 29 August 2007
PRESENTERS Speakers Ben Brayshaw Valentino Tanfara Assistant Fund Manager CEO ING Office Fund ING Office Fund International guest speakers Hans Copier Rob Greer Philip La Pierre Fund Manager Portfolio Manager Director Acquisitions ING Dutch Office Fund/ ING Clarion US ING Real Estate Europe Country Manager Netherlands 1
AGENDA ► Fund Achievem ents ► Portfolio Update ► European Update ► I NG Dutch Office Fund ► US Update ► Grow th Strategies & Outlook 2
FUND ACHI EVEMENTS Valentino Tanfara, CEO I NG Office Fund 388 George Street, Sydney 3
FUND ACHI EVEMENTS ► Strong perform ance > Total return of 32.8% (1) > Increased earnings and distributions ► Delivering on total return strategy > Acquisitions into strong total return markets > Further disposals of non core assets ► Driving portfolio returns > Continued leasing success and retention > Enhanced property values (1) Source: UBS 4
RESULTS SUMMARY 2 0 0 7 2006 Change Distributable Income (1) $ 1 2 4 .3 m $111.7m 11% Distributable income per unit (1) 1 0 .8 c 10.7c 1% Distributions (Headline) 1 1 .5 c (2) 10.3c 12% Distributions (Normalised) 1 0 .5 c (3) 10.3c 2% Retained earnings $ 1 4 .0 m $11.8m $2.2m Net asset value per unit (4) $ 1 .7 3 $1.39 24% (1) Excludes: revaluation of investments and derivatives, profit on sales and rental straight lining (2) Includes special distribution of 1.0cpu (3) Excludes special distribution (4) I ncludes provision for deferred income tax 5
CONSI STENT GROW TH I N DI STRI BUTABLE EARNI NGS 11.0 10.8 10.8 10.8 10.7 10.6 10.5 10.4 10.3 10.2 10.1 10.0 10 10.0 9.8 9.6 5 .2 1 9.4 9.2 9.0 2002 2003 2004 2005 2006 2007 Note: 2005 headline result includes one-off lease termination payment of 0.3 cpu 6
KEY STATI STI CS June 2 0 0 7 June 2006 Total assets (look through) $ 3 .5 b $2.6b Gearing (look through) 3 7 .6 % 39.4% Interest coverage (look through) (1) 2 .9 x 3.0x Number of unitholders 2 8 ,6 6 4 29,833 Overseas ownership 1 6 % 4% Average lease duration 5 .5 years 5.9 years Average portfolio cap rate 6 .2 % 6.7% (1) Distributable income and interest expense (look through) divided by interest expense (look through) 7
MAJOR REVALUATI ON RESULTS Acquisition Acquisition Previous Current date price valuation valuation 900 Third Avenue Aug 03 US$108m US$142m US$245m 72% New York (1) Homer Building Apr 05 US$168m US$168m US$212m 26% Washington DC (2) Waltham Woods Nov 05 US$65m US$65m US$76m 17% Boston (3) Hitachi Complex Jul 98 A$82m A$133m A$193m 45% Brisbane Australian Gov. Centre May 98 A$103m A$225m A$315m 40% Brisbane ► NAV 2 4 % to $ 1 .7 3 (1) 49% ownership (2) 80% ownership (3) 50% ownership 8
DI SPOSALS 4 0 Cam eron Avenue, Belconnen, ACT ► A$60.2m: 20% on last book value ► Historic unleveraged IRR: 16.0% p.a. ► Suburban location with supply issues ► Single tenant renewal risk 1 Adelaide Terrace, Perth, W A ► A$87.0m: 22% on last book value ► Historic unleveraged IRR: 12.4% p.a. ► Non-core location and residential precinct ► Limited opportunity to capture rental growth 9
ACQUI SI TI ONS NVH Building, Paris ( 5 0 % ) ► €77.7m (A$129.5m) ► 5.0% net yield ► New asset in core WBD location ► Excellent income & growth potential I NG Dutch Office Fund, Netherlands ( 2 0 % ) ► €267.7m (A$446.2m) ► 6.4% net yield ► High quality, diversified office portfolio ► Attractive returns in strengthening market 10
MAJOR LEASI NG 2 0 0 7 ( US) Tenant Property Area Old rent New rent ( sqf) ( $ sqf) ( $ sqf) Amgen Homer Building 76,866 $41n $45n 10% Washington D.C. Zweig 900 Third Avenue 45,000 $49g $64g 30% New York Cole Schotz 900 Third Avenue 17,800 $53g $65g 23% New York Spear, Leeds, 900 Third Avenue 16,120 $42g $56g 33% Kellogg New York Permal Group 900 Third Avenue 11,481 $53g $64g 21% New York ► 1 5 % average rental increases over the year 11
MAJOR LEASI NG 2 0 0 7 ( AUSTRALI A) Tenant Property Area Old rent New rent ( sqm ) ( $ sqm ) ( $ sqm ) Lycopodium 1 Adelaide Tce. 5,910 $179n $325n 82% Perth Criminal Justice Aust. Gov. Centre 5,821 $377g Mkt (Apr 08) 46% Brisbane Est $550+ Corporate Hitachi Complex 2,958 $307g Mkt (Dec 07) 63% Solutions Brisbane Est $500+ State of Hitachi Complex 2,619 $314g $415g 32% Queensland Brisbane DFAT Aust. Gov. Centre 1,211 $300g $450g 50% Brisbane Maple Brown 10-20 Bond Street 1,039 $545n $545n Sydney ► 3 4 % average rental increases over the year 12
DEBT REFI NANCE Previous facilities (1) New m ulticurrency facility (1) CMBS $408m Multi currency facility $89m ING Dutch Office Fund facility $248m $977m NVH facility $119m Computer Associates/ Noblis facility $113m Drawn $977m $977m Additional capacity $111m $448m ► Replaced 5 secured facilities w ith 1 unsecured facility ► 3 & 5 year tranches ( Jun 1 0 & Jun 1 2 ) ► Cost effective, flexible, capacity to refinance other facilities (1) At date of refinance 13
Ben Brayshaw , Assistant Fund Manager PORTFOLI O UPDATE Neuilly Victor-Hugo Building, Paris I NG Office Fund 14
GEOGRAPHI C DI VERSI TY EUROPE 2 1 % Prague 2% The Netherlands 15% Paris 4% Seattle Seattle Seattle Seattle Seattle Seattle Seattle Seattle Boston 3% USA 2 4 % Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento New York New York New York New York 8% New York New York New York New York New York Washington D.C. 11% Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C. Washington D.C. Dallas 2% Bangkok Bangkok Bangkok Bangkok Bangkok Bangkok Bangkok Bangkok AUSTRALI A 5 5 % Brisbane 15% Sydney 28% Canberra 2% Melbourne 10% I OF’s PORTFOLI O I S DI VERSI FI ED ACROSS 3 CONTI NENTS & 5 COUNTRI ES 15
LEASE EXPI RY PROFI LE ( BY I NCOME) 14% Other 13% 12% 10% 8% 8% 7% 1 % Child Support Aust. Gov. Cnt. 6% 1 % Telstra 151 Clarence St. 4% 1 % Tennem baum 4% 900 Third Ave. 1 % Custom s Aust. Gov. Cnt. 1 % Kroll 1 % AMP 1 % NVH 2% 4 % MBL 900 Third Ave. 151 Clarence St. 1 % 1 1 1 Pac. 10-20 Bond St. 2 % DEST 2 % BMC 1 % DOF 16-18 Mort St. Waltham Woods 0% Vacant FY08 FY09 FY10 ► W eighted average lease expiry 5 .5 years 16
I NCOME BY REVI EW TYPE 100% 2 0 % 2 0 % 2 3 % 80% 8% Sydney 9% Sydney 8% Sydney 3% Brisbane 16 % 4% Aust. Other 2 1% 5% Aust. Other 2 2 % 2% US 4% US 60% 4% Brisbane 15% 2% Europe 3% Brisbane 4% US 18 % 1% Aust. Other 1% Europe 1% Europe 18 % 40% 4 9 % 20% 4 1% 3 7% 0% FY08 FY09 FY10 Fixed CPI Market No Review ► Structured increases reflect average grow th of 3 .6 % fixed and 2 .2 % CPI ► Market reversions m ainly in Sydney, Brisbane and US Source: ING Real Estate 17
CURRENCY AND I NTEREST RATE HEDGI NG Currency I nterest rates € US$ € US$ Pct Rate Pct Rate Pct Rate (1) Pct Rate (1) hedged hedged hedged hedged FY0 8 100% 0.62 100% 0.69 100% 3.9% 97% 4.3% FY0 9 100% 0.59 100% 0.69 100% 3.9% 84% 4.5% FY1 0 100% 0.57 100% 0.69 100% 3.9% 77% 4.5% FY1 1 100% 0.54 100% 0.69 100% 3.9% 67% 4.9% FY1 2 100% 0.52 100% 0.69 90% 3.9% 44% 5.0% Ave. term / rate 5 .0 yrs 0 .5 6 5 .0 yrs 0 .6 9 5 .9 yrs 3 .9 % 3 .8 yrs 4 .6 % ► Substantially hedged FX and interest rate positions (1) Excludes margins 18
EUROPEAN UPDATE Philip La Pierre, Director Acquisitions I NG Real Estate Europe Hans Copier, Fund Manager I NG Dutch Office Fund Country Manager Netherlands World Trade Centre Zuidplein, Amsterdam 19
KEY TRENDS I N EUROPE ► Economic fundamentals are improving rapidly across most of Europe > Strong GDP growth, reduced unemployment, reduced vacancy rates ► Continued strong capital inflow > Broader investment base, higher allocations, new capital sources ► Risk that yields will move past ‘fair value’ > Low bond yields, investment momentum, expected rental growth > Interest rate increases and credit crunch ► Hot issues: sustainability and human resources 20
TRENDS I N MARKET RENTS ACROSS EUROPE 2005 Q4 2007 Q2 850 750 650 Early up turn phase 550 € sqm 450 350 250 150 Stockholm Madrid Paris Munich Frankfurt Amsterdam Milan Prague Barcelona Berlin Brussels Warsaw Germany Neth. Belgium Italy Poland Sweden Spain France Czech. R. ► Rental grow th has im proved across m ost m arkets, esp. Spain and France ► Germ an recovery strengthens, follow ed by Netherlands, I taly and Sw eden Source: PMA 21
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