ING REIM exits continue with offload of A$2.6bn office fund

The Australian division of ING Real Estate Investment Management has continued its wind-down with the offload of its ASX-listed ING Office Fund.

ING Real Estate Investment Management, the real estate investment management platform of Dutch financial group ING has agreed the exit of a further fund from its Australian platform.

The firm announced today it had agreed a deal to transfer the management of its ING Office fund, an AXS-listed real estate fund which owns A$2.6 billion of core office buildings in Australia, the US and Europe, to Morgan Stanley Real Estate Investing-owned Investa Property Group.

The deal would also see the Sydney-based property group acquire the 2.5 percent stake in the fund currently owned by ING entities.

“The transaction is part of ING’s previously stated intention of undertaking a phased withdrawal from the Australian property funds management business in a timely and controlled manner,” ING said in a statement on the transaction. The agreement to offload the office fund, which owns core offices in Australia, Europe and the US predominately leased to government tenants and other ‘blue chip’ occupiers, shortly follows the closing of its sale of similar sized industrial real estate fund to an investment club led by Sydney-based Goodman Group.

ING REIM’s Australian fund management business is also in the process of organising exits from funds owning assets in the leisure, healthcare and senior housing sectors. The decision to seek exits from the funds followed a strategic review by ING which concluded in February.

It also ran concurrently with ING’s exit of its main ING REIM business, which was sold to Los Angeles-based CB Richard Ellis for approximately $1 billion last month. That business, which included large platforms in Europe and Asia, as well as a multi-manager business, has been merged with CBRE’s own investment management business, CBRE Investors. The combined platforms have created the world’s largest company in the sector with about $96 billion of assets under management.

The exit of the ING Office Fund will also see a number of staff from ING REIM’s Australia business crossing over to Investa, including the chief executive officer of the fund, Tino Tanfara. In addition, ING Management Limited, the entity responsible for managing the fund will eventually be either purchased or replaced with an Investa entity via a unit holder vote.

Investa Property Group is a multi-faceted real estate investment business founded in 2000. One of the largest unlisted owners of commercial real estate in Australia, Investa had approximately A$11.7 billion of assets under management. The firm has exposure to commercial, residential and industrial real estate via unlisted funds as well as its balance sheet, managing approximately A$2 billion of capital on behalf of both institutional and retail investors. It was purchased by MSREI in September 2007 for A$4.7 billion and delisted from the Australian Securities Exchange.