ASX-listed ING Office Fund is looking to raise $400 million through a rights issue.

The property fund will issue units at $0.80, which is a 20 per cent discount to the unit price on Friday.

"As a result of unprecedented US dollar movements since June 2008, the fund's look-through gearing and covenant gearing ratio have increased materially, reducing its undrawn debt capacity," the fund said on Friday.

The fund's portfolio includes Australian as well as US properties, and its total assets are valued at $3.9 billion.

The raising will reduce look-through gearing - the level of gearing that takes into account off-balance sheet financing through joint ventures - from 34.7 to 32 per cent.

Part of the fund's debt matures in June 2010, and it intends to start negotiations about new terms with its banks in the second half of 2009.

The Australian listed property trust sector has been hit hard during the global credit crisis, as investors have been concerned over the high levels of gearing. On average, the sector has dropped more than 60 per cent since December 2007.

In part, this development can be attributed to the move away from the traditional property fund model, in which most revenues come from rental income, to an asset manager model.

The ING Office Fund can still be considered a traditional property manager, as it derives over 98 per cent of its revenues from rental income.

The fund expects to pay out 4.25 cent per unit over the second half of the financial year 2009, which would bring the full year distribution to 8.5 cents.