2002 Media Releases

Deutsche Industrial Trust (ASX:DIT) has delivered the best results of its four year history, with its net profit increasing by 22 per cent to $35 million for the year to 30 June 2002. DIT achieved a number one ranking for performance in the industrial LPT sub-sector⁽¹⁾, with a 28.9 per cent return⁽²⁾ to investors - almost 8 per cent ahead of its benchmark. This total return was also second highest in the S&P/ASX Property 200 Accumulation Index.

Ben Lehmann, General Manager of DIT, explained “The year’s very strong real estate performance generated excellent performance for the Trust’s unit holders. We delivered the industrial sector’s best tenant retention rate of 85 per cent; we acquired two significant assets with excellent value-add potential while successfully disposing of several smaller, non performing assets; and our two equity placements, used to fund these acquisitions, were both heavily oversubscribed.”

The Trust will pay a distribution for 7.5 cents per DIT unit for the 6 months ending 30 June 2002 and 1.37 cents per DITN unit with a pro-rata entitlement during the same period.

Mr Lehmann said, ‘The past 18 months has been about building a little more scale, improving portfolio fundamentals and building in some organic growth. We have made significant progress on these fronts and we now aim to accelerate growth in earnings per unit.”

Asset management. Significant revenues were derived from the Trust’s 200 tenants, with new leases and retentions of approximately 110,000 sq metres over the past 12 months, representing almost 21 per cent of the portfolio. DIT’s leasing endeavours resulted in the maintenance of portfolio occupancy at above 95 per cent throughout the year, closing at 96 per cent on 30 June 2002.

Much of the revenue growth came from increases in the rentals payable following tenant rental reviews. Approximately 60 per cent of the Trust’s annual net property income for the year was reviewed to either CPI, a fixed percentage, market or a combination of these mechanisms. The overall rental increase from these reviews was 4.2 per cent, with market reviews contributing a strong 6.1 per cent rental increase.

The success of DIT’s leasing campaigns improved the Trust’s lease expiry profile across the year, resulting in a one year extension to the average unexpired lease term, which now stands at 4.1 years.

Mr Lehmann acknowledged that more work needed to be undertaken to keep improving the lease duration. “We recognise the year ahead poses challenges for retention and to this end we have currently agreed commercial terms on 50 per cent of our combined vacancy and expiries in the 2002/2003 financial year, with discussions well advanced with the remainder. I’m confident of positive outcomes with the vast majority of our customers ensuring we continue to maintain our historically high retention rates.”

Acquisitions, disposals and developments. DIT acquired two significant office and business park assets in New South Wales during the year for a total cost of approximately $132 million – Foundation Macquarie Park, and 1-55 Rothschild Avenue, Rosebery (adjacent to 1-15 Rosebery Ave, a property owned by DIT).

Mr Lehmann said, “Both assets represent excellent value which is particularly pleasing given the prices we saw paid for many industrial assets during the year”.

Consistent with the Trust’s commitment to dispose of non-performing assets two small industrial properties were sold in the year (151 Esther Street, Belmont, WA; and 9 Christina Rd, Villawood, NSW), with gross proceeds of $7.9 million.

Equity placements. Two equity placements were made to institutional investors during the year, which raised $55 million. Both were heavily oversubscribed and attracted new institutional investors to the register.

The number of investors in DIT increased by 24 per cent over the 2001/2002 financial year. DIT remains the third largest listed industrial property trust, with its market capitalisation increasing by 36 per cent over the year to $498 million.

The Trust’s distribution reinvestment plan will be implement for the December half to assist with the funding of future growth now imbedded within the portfolio.

Further information:

Ben Lehmann
General Manager, DIT DB Real Estate
Tel: (02) 9249 9003 / 0414 424 420 

Kristin Silva/Ainsley Gee
Corporate Communications
Tel: (02) 9249 9568 / (02) 9249 9904

(1) Source: UBS Warburg Industrial 200 Index
(2) Source: IRESS

About Deutsche Industrial Trust

Deutsche Industrial Trust (ASX:DIT) is the third largest listed industrial trust in Australia) and the top performing industrial trust in the industrial sub-sector for the 2001/02 financial year*). Its gross assets total approximately AUD$700 million. The Trust has investments in 37 properties across four of the country’s largest industrial markets (NSW 87%, VIC 3%; WA 3%; QLD 7%), The Trust invests in high quality industrial assets in prime and well-established locations across Australia.

(*) Source: UBS Warburg Industrial 200 Index