Interim Management Statement

F&C UK Real Estate Investments Limited

Interim Management Statement

For the Three-Month Period from 1 July 2014 to 30 September 2014


Investment Objective

The investment objective is to provide ordinary shareholders with an attractive
level of income together with the potential for capital and income growth from
investing in a diversified UK commercial property portfolio.


Performance Summary

Total Return *                   For the three
                            month period ended
                             30 September 2014
                                              
Net asset value per share                 5.9%
                                              
Ordinary share price                      9.6%
                                              
Portfolio total return per IPD            4.4%       
                                          
                                              
Investment Property                       4.4%              
Databank UK Quarterly Index                   
                                              
FTSE All-Share Index                     -1.0%
                                              

Capital Values - 3 months             As at         As at           % Change
                               30 September       30 June                   
                                       2014          2014                         
                                                                        
                                                                            
Net asset value per share             87.1p         83.4p               4.4%
                                                                            
Ordinary share price                  90.8p         84.0p               8.1%
                                                                            
FTSE All-Share Index                3,533.9       3,600.2              -1.8%
                                                                            
Premium to net asset value             4.2%          0.7%                   
                                                                            
Net gearing #                         31.6%         31.7%                   
                                                                            

Sources: F&C Investment Business Limited, Investment Property Databank (`IPD'),
Datastream.

* - All total returns are based on net dividends re-invested

# - Net gearing: Bank debt (less net current assets, excluding the swap
liability) divided by fair value of investment properties

Dividends

The fourth interim dividend for the year ended 30 June 2014 of 1.25 pence per
share was paid on 30 September 2014. In the absence of unforeseen circumstances
it is the intention of the Board to maintain quarterly dividends at this rate,
giving a total dividend of 5.0 pence per share for the 2014/15 financial year.

Review for the Period

At 30September 2014, the Net Asset Value per share of the Company was 87.1
pence, an increase of 4.4 per cent over the quarter. The Company's property
portfolio increased in value by 3.0 per cent on a like for like basis. The
value of the portfolio stood at £312.3 million following two property sales and
one purchase in the quarter. The portfolio produced an income yield of 1.4 per
cent, which together with a capital growth of 3.0 per cent after taking account
of transaction costs delivered a total return of 4.4 per cent over the quarter.

The Company's industrial properties produced the largest contribution to
performance in absolute terms. Rest of UK offices delivered 8.4 per cent and
West End offices 5.3 per cent. Retail property lagged delivering 3.0 per cent
overall.

During the quarter the Company purchased Building A3, Glory Park, High Wycombe
for £6.97 million, reflecting a yield of 7.0 per cent. The office property
extends to 19,572 square feet and is let to two pharmaceutical tenants.

 

The Company has continued to dispose of smaller lot sized properties and
completed the sales of 2-3 Pavilion Buildings, Brighton, a bar with offices
above, which sold for £2.5 million, reflecting an initial yield of 6.0 per
cent; and Unit GP9, Globe Park, Marlow, an empty office of 14,300 square feet
building requiring refurbishment, for £1.7 million reflecting a capital value
of £119 per square foot.

Currently the average weighted lease expiry profile is 8.25 years and the void
rate has reduced from 5.7 per cent to 5.0 per cent over the quarter.

Top Ten Holdings

Property                                       Sector               30/09/2014
                                                                 Percentage of
                                                                     portfolio
                                                                              
London W1, 14 Berkeley Street                  Offices                     7.4
                                                                              
Banbury, 3663 Unit, Echo Park                  Industrial                  6.4
                                                                              
Eastleigh, Southampton International Park      Industrial                  4.1
                                                                              
Rotherham, Northfields Retail Park             Retail Warehouse            3.8
                                                                              
Colnbrook, Units 1-8 Lakeside Road             Industrial                  3.8
                                                                              
York,Clifton Moor Gate                         Retail Warehouse            3.4
                                                                              
Leamington Spa, 30-40 The Parade& 47/59a       Retail                      3.3
Warwick St                                                                    
                                                                              
Hemel Hempstead, Hemel Gateway                 Industrial                  3.2
                                                                              
Chelmsford, County House, County Square        Offices                     3.1
                                                                              
Edinburgh, 1-2 Lochside Way, Edinburgh Park    Offices                     2.8
                                                                              
Total                                                                     41.3


Geographical Analysis

Location                                           30/09/2014       30/06/2014
                                                   Percentage       Percentage
                                                 of Portfolio     of Portfolio
                                                                              
South East                                               43.7             42.9
                                                                              
Yorkshire and Humberside                                 11.0             11.2
                                                                              
London - West End                                         9.2              9.1
                                                                              
West Midlands                                             8.0              8.5
                                                                              
Eastern                                                   6.9              7.0
                                                                              
Scotland                                                  6.2              5.9
                                                                              
Rest of London                                            4.4              4.5
                                                                              
North West                                                4.4              4.5
                                                                              
East Midlands                                             4.0              4.1
                                                                              
South West                                                1.2              1.3
                                                                              
North East                                                1.0              1.0
                                                                              
Total                                                   100.0            100.0


Sector Analysis

Sector                                             30/09/2014       30/06/2014
                                                   Percentage       Percentage
                                                 of Portfolio     of Portfolio
                                                                              
Industrial                                               25.8             25.7
                                                                              
Retail                                                   22.3             23.9
                                                                              
Offices                                                  28.3             26.5
                                                                              
Retail Warehouse                                         23.6             23.9
                                                                              
Total                                                   100.0            100.0

The Board is not aware of any significant events or transactions which have
occurred between 30 September 2014 and the date of publication of this
statement which would have a material impact on the financial position of the
Company.


Quarterly and Key Information

Further information regarding the Company, including performance since launch
and the most recent annual and interim reports, can be found at the Company's
websiteswww.fcre.co.uk,www.fcre.gg or at www.fandc.com

This interim management statement has been prepared solely to provide
information to meet

the requirements of the UK Listing Authority's Disclosure and Transparency
Rules.

For further information please contact:

Ian McBryde/ScottMacrae
F&C Investment Business Limited
Tel: [phone]