Annual Report and Accounts

ING UK Real Estate Income Trust Ltd
05 April 2007


ING UK Real Estate Income Trust Limited

5 April 2007


Preliminary Profits Announcement for the period ended 31 December 2006

ING UK Real Estate Income Trust Limited, a Guernsey registered closed-ended
investment company, today announces preliminary results for the period since
incorporation on 15 September 2005 to 31 December 2006.


Chairman's Statement

The Annual Report covers the period from the Group's incorporation on 15
September 2005 until 31 December 2006, during which time conditions within the
UK commercial property market remained favourable. Returns from UK commercial
property have now delivered in excess of 18% per annum over the last three
years.

As a result I am pleased to report a healthy position for the Group.  The net
asset value per share has increased by 26% during the period.  In addition the
Group has made dividend payments equivalent to 5.8475 pence per share in the
period.

The underlying property portfolio has risen from £491 million at launch to £702
million at 31 December 2006, remaining principally focussed towards the office
sector, where performance is expected to be strongest in the short to medium
term.

In November 2006 the Group successfully placed a further 26.5 million shares,
which facilitated the acquisition of eight new assets, the primary objective of
which was to increase the Group's exposure to the office and industrial sectors
in the South East. We are grateful to our shareholders for their support in this
transaction.

As part of this transaction the Group increased its level of gearing, which is
now 44.6%, at a time when the Board believes it will remain accretive to
performance.  The additional facility is structured to allow flexibility to
alter the level of debt in the future, as and when it may be prudent to optimise
its impact on performance in the light of changing financial conditions.

Following an initial period of stabilisation, the asset management initiatives
put in place at launch have started to come to fruition and make a positive
contribution to performance.  The Group has also made a number of acquisitions
alongside selective disposals, which are detailed within the Investment
Manager's Report.

My colleague David Blight has, with effect from today, stepped down from the
Board and I would like to take this opportunity to thank David for his
contribution since the Company's inception.  I am pleased to welcome Tjeerd
Borstlap to the Board, and appreciate the continuing support from ING in this
regard.  Tjeerd is currently Chief Financial Officer of ING Real Estate
Investment Management globally, based in The Hague and I have no doubt that he
will make a positive contribution.

Increased demand for UK commercial property has led to falling yields and as
such the income return for commercial property is now below the cost of debt.
Purchasing remains very difficult, especially on an income only basis.  The
Group's portfolio remains constructed so as to maximise income, offering an
initial property yield of 5.4% compared with a market average of 4.6%
(Investment Property Databank ('IPD') Monthly Index January 2007).

Whilst 2007 is not forecast to see returns reaching recent levels, the Board
remains confident in the Investment Manager's ability to continue to enhance the
income potential and drive performance.

Nicholas Thompson

Chairman of the Board


4 April 2007


Investment Manager's Report


Economic Overview

Following a housing market related slowdown in 2005, the UK economy rebounded
strongly in 2006, up 3.0%. A significant driver of this was the financial and
business services sector, in which output is now growing at a highly robust 5%
per annum plus. Retail sales also picked up in 2006, with average growth of
4.0%.


Unemployment in the UK remains at a historic low and is currently measured at
just 3% (Claimant Count Measure) compared to its long term average of around
5.5%. While the number of unemployed workers increased during 2006, the total
pool of labour also increased, mainly due to a growing number of migrant
workers, resulting in a steady unemployment rate. At November 2006, there were a
total of 30.7 million economically active people in the UK (source: Office of
National Statistics), an increase of 400,000 since the previous year.


Inflation, as measured by the Consumer Price Index, picked up during 2006, from
1.9% at the end of 2005 to 3.0% in December 2006. The Retail Price Index,
excluding mortgage interest payments ('RPIX'), also trended upwards from 2.0% in
2005 to 3.8% in 2006. This was caused mainly by growing utility bills and food
prices. Owing to rising rates of inflation and a faster than expected economic
upturn, the Bank of England has raised interest rates and the UK base rate is
now 5.25%. Our economic forecasts suggest that rates will peak at 5.5% and this
will cause inflation to fall back to 2% by the end of this year.


Property Market Overview

UK commercial property achieved a total return of 18.1% in 2006 (IPD Annual
Index). Equities also performed well with total returns registering 16.8% in
2006. Gilts saw poor performance throughout 2006, finishing the year with a
return of just below zero. As the chart below shows, property is the best
performing asset class over the last one, three, five, ten, fifteen and twenty
year periods. Looking forward it is not expected that the level of returns seen
over the past three years (in excess of 18% per annum each year over 2004-2006)
will continue. These high returns were driven largely by a reduction in yields,
which has driven up capital values. In our view, the process of falling yields
is largely over and so capital values are expected to stabilise. Thus the driver
of future performance will be rental value growth.

December 2006 Total Returns - Property, Equities and Gilts

                            Property                Equities              Gilts
1 year                         18.1%                   16.8%              -0.1%
3 years                        18.5%                   17.2%               4.6%
5 years                        15.1%                    8.5%               5.1%
10 years                       13.6%                    7.9%               6.9%
15 years                       11.9%                   10.6%               8.4%
20 years                       11.6%                   11.0%               9.1%

Within the commercial property market, returns differed from sector to sector.
The office sector saw the strongest returns, which were measured at 23%, their
highest rate since the late 1980s. The sector has been driven by central London,
where the amount of vacant space has been contracting. This has spurred on
rental growth to reach 12.2% in 2006. We expect the vacancy rate to continue to
fall, as the amount of new space entering the market is historically low, and as
a result rental growth will increase further.

The industrial sector was the next best performing sector in 2006, which
achieved a total return of 17.7%. Rental growth in the industrial market saw
some improvement, increasing from 1.1% in 2005 to 1.3% in 2006. The increasing
amount of available industrial space, up from 184 million sq ft in 2005 to 193
million sq ft in 2006 (King Sturge, Chartered Surveyors), is currently holding
back the rate at which rents can grow. Nevertheless, this trend differs
significantly from location to location, with London seeing the highest level of
rental growth. The strong returns seen in 2006 were driven mainly by continued
capital appreciation of 11.3%, of which over 10% was derived from falling yields
alone.

Returns were lowest in the retail sector, but were still measured above their
long term average at 15.2% in 2006. The retail market was the only sector where
rental growth actually declined in 2006 compared to 2005, falling from 3.9% to
3.2%. This was driven mainly by the slowdown in the out-of-town retail market
for household goods, such as furniture, carpets and DIY. Many retailers in this
sector suffered from the slowdown in retail sales growth in 2005, as well as
rising costs from energy bills, staffing and business rates. This has impeded
their ability to pay significantly higher rents. Capital growth remained buoyant
in the retail sector, however, growing at over 10% in 2006.

The chart below shows the total return achieved in 2006 for the main sub-sectors
of the UK commercial property market. We expect the outperformance of the London
office market to continue.

2006 Total Returns by Market Segment

All Property                                                              18.1%
Distribution Warehouses                                                   17.8%
Standard Industrials                                                      17.6%
Rest of UK Offices                                                        18.2%
Rest of South East Offices                                                19.1%
West End & Mid Town Offices                                               30.8%
City Offices                                                              24.7%
Retail Warehouses                                                         15.3%
Shopping Centres                                                          15.6%
Standard Shops                                                            13.8%


Group Portfolio Performance

For 2006, at an underlying ungeared level, the Group's direct property portfolio
produced a total return of 17.3%. This compares with the IPD Annual Index of
18.1%.

However, as expected the portfolio continued to outperform on an income return
basis, with the high initial yield and active management initiatives. The income
return from the portfolio was 6.5% for 2006, significantly ahead of the IPD
Annual Index (4.9%). Capital growth lagged the Index at 10.2% (IPD 12.6%).

The best performing sector was the retail sector, with a significant
contribution from a very satisfactory settlement on the rent review at a
property in Chester. In the industrial sector, the Magna Park property performed
strongly, principally as a result of the profit share agreement which was
entered into on an adjacent plot. This is detailed below.

The retail, industrial and leisure elements of the portfolio all outperformed
their benchmarks, however the office assets underperformed their benchmark in
2006. The underperformance of the office assets in 2006 was due to a combination
of factors. The portfolio initially had a relatively low weighting towards
central London and this, combined with five office acquisitions in 2006, in part
to improve the exposure to the central London market, has led to the
underperformance in the sector. In addition, whilst a number of active
management opportunities were identified in the office sector, these have taken
slightly longer than envisaged to realise. As such they provide opportunities
for future performance but did not contribute in 2006.

Asset Management Highlights

In terms of active management, opportunities have been identified in all sectors
and implemented where appropriate. There have been a number of highlights since
launch which have contributed positively toward performance.

Over the period, office and industrial weightings were increased to 41.7% and
27% respectively. 45 rent reviews were documented and over 20 lettings were
completed. The void rate on the portfolio (excluding rental guarantees) reduced
from 4.5% at 31 December 2005 to 2.6% at 31 December 2006, and the average lease
length stands at 8.74 years as at 31 December 2006.

In Lutterworth, at Unit 5320 Magna Park, which was successfully rebuilt
following a fire in late 2005, the Group granted consent for a link building
between the property and a newly constructed adjacent unit which was to be
occupied by the Group's tenant. In order to grant this consent, the Group
negotiated a premium payment from the adjoining owner and entered into a profit
share agreement in respect of the sale of the building on the adjacent site. In
total the transaction resulted in payments to the Group of over £1 million.

At Molly Millars Lane, Wokingham, the Group took a surrender of the lease of one
of the largest industrial units on this estate. The Group agreed to accept a
premium payment of £950,000 for the surrender, which equated to a rental cover,
based on estimated rental value, of 4.7 years. Following minor refurbishment
works, the Group subsequently agreed terms to let this unit at £195,000 per
annum on a new ten year lease, with a five year break option.

In Welwyn Garden City, at Shire Park, the Group re-geared this multi-let office
building which was let to two tenants on leases expiring in 2010 and 2012
respectively. One of the tenants was not in occupation and the Group negotiated
a simultaneous surrender of this lease for a premium payment and subsequently
re-let the entire building to the other occupier on a new 15 year lease.

At St James Court in Bristol the Group surrendered the lease of the third floor
in this modern three storey office building for a premium payment from the
outgoing tenant. Similar to Molly Millars Lane above, the Group refurbished the
floor and, following a marketing campaign, an occupier was secured, taking a new
ten year lease with a five year break option. The letting was completed on 29
September 2006.

Acquisitions and Disposals

In the period from launch until 31 December 2006 the Group acquired 12 assets
and disposed of three. The acquisitions were primarily in the office and
industrial sectors, whilst the disposals came from the retail and leisure
sectors. The principal transactions were as follows:-

In May the Group acquired Boundary House, an office building on Jewry Street,
within the City of London. It comprises over 45,000 square feet of office space
with eight occupational tenants and an average rent of only £20 per sq ft,
comfortably below the estimated rental value of £25 per sq ft. The purchase
price of £16.1 million reflected an initial yield of 5.2%.

In July the Group acquired Notcutt House, Southwark Bridge Road, SE1. The
purchase price of £7 million reflects a net initial yield of 5.75%. The property
comprises 12,653 sq ft of air conditioned office space refurbished in 2001 which
is let at £427,000 per annum until September 2016 to Conchango (UK) plc.

In September the Group purchased an industrial unit, Vigo 250, located at
Birtley Road in Washington, Tyne & Wear for £12.85 million reflecting a net
initial yield of 6.25%. The unit is a high specification production and
warehouse building totalling 246,752 sq ft, built in 1995. The building is let
to Tanfield Group Plc for a term of 25 years at an initial rent of £850,000 per
annum with five yearly, upward only rent reviews, which benefit from minimum
fixed rental uplifts after five and ten years.

In December the Group completed the acquisition of a portfolio of eight
properties for £125.5 million. The Group acquired three office investments in
Bracknell, Fleet and Swindon, two industrial investments in Harlow and
Lutterworth and three retail units in Bristol, Carlisle and Rugby. The
acquisition was funded through a share placing of 26.5 million shares, raising
£32.2 million of additional equity. An additional debt facility of £88.45
million was utilised increasing the overall gearing of the Group to 44.6%.

This additional debt facility provided, in addition to the securitised debt, a
flexible facility albeit at a higher margin, thus increasing the blended cost of
debt across the Group to 5.5%.

In line with its existing strategy the Group sold, immediately after purchasing
the portfolio, one of the smaller retail assets located in Rugby, at a profit to
the purchase price.

In August, the Group disposed of another of its smaller assets, a supermarket at
Gorgie Park Road, Edinburgh for £3.6 million which reflects a net initial yield
of 4.14%. The disposal was in line with the income driven strategy of the Group
and was over £1 million above the valuation at launch.

In October the Group disposed of the Scorpio Inns Public House Portfolio to the
occupying tenant, The Punch Pub Company (PTL) Limited. The disposal of the
portfolio followed the tenant exercising one of its options to purchase. The
proceeds from the disposal were £3 million ahead of the valuation at launch.

Outlook

Against the backdrop of an improving occupier market, at the All Property level,
we expect rental growth to reach 4.0% in 2007. Combined with further yield
compression, we expect capital growth of 5.7% to be achieved. This takes our
total return estimate for UK commercial property to 10.6%, assuming an income
return of 4.6%. This compares to the Investment Property Forum ('IPF') Consensus
Forecast of 9.0% for 2007.

Looking out on a longer term basis we expect total returns to moderate, as
yields stabilise. While some commentators are projecting falls in capital values
resulting from rising yields in the immediate or near term, we do not share this
view. We expect yields to remain constant during 2007, 2008 and 2009, and
returns to be driven by strong rates of rental growth. On a three year view, we
forecast total returns to average 9.2% per annum. Our more buoyant view on
capital growth puts our forecast ahead of the IPF Consensus Forecast of 6.3% per
annum over the same period.

At the sector level for 2007 offices are expected to see the strongest
performance. This sector will be driven by the central London market, which we
forecast to see rates of rental growth as high as 13% to 14%. The retail and
industrial markets, which will both see slower rates of rental growth, are
forecast to see lower returns. Nevertheless, we expect both retail and
industrial assets to produce respectable returns against other asset classes.

In terms of the Group's portfolio, the focus remains on maximising income and
continuing with the successful tenant re-engineering that has taken place to
date. The portfolio is well structured on a sector basis, but there are still
opportunities to sell assets where performance is limited. In addition, the
focus will be to sell a number of the smaller and lower yielding assets to
reduce the overall number of assets within the portfolio and increase the income
return.


ING Real Estate Investment Management (UK) Limited

4 April 2007


Consolidated Income Statement
for the period from 15 September 2005 to 31 December 2006

                                            Income      Capital          Total
                                              £000         £000           £000
Income
Rental income                               39,329            -         39,329
Service charges recharged to tenants         6,074            -          6,074
Other operating income                       4,661            -          4,661
Total operating income                      50,064            -         50,064

Gains and losses on investments
Realised gains arising on disposal of
investment properties                            -        4,572          4,572
Unrealised gains on revaluation of
investment properties                            -       70,421         70,421
Unrealised gain on interest rate swap            -        8,727          8,727
Total gains on investments                       -       83,720         83,720

Expenses
Property operating expenses                 (2,572)           -         (2,572)
Service charge costs                        (6,074)           -         (6,074)
Management expenses                         (5,977)           -         (5,977)
Other operating expenses                    (1,607)           -         (1,607)
Total operating expenses                   (16,230)           -        (16,230)

Profit before finance costs and tax         33,834       83,720        117,554

Finance costs
Interest receivable                          1,617            -          1,617
Interest payable                           (12,549)           -        (12,549)
Total finance costs                        (10,932)           -        (10,932)

Profit before tax                           22,902       83,720        106,622
Tax                                           (460)           -           (460)

Profit for the period                       22,442       83,720        106,162
Dividends                                  (17,835)           -        (17,835)
Retained earnings                            4,607       83,720         88,327

Earnings per share
Basic                                                                     34.4p
Diluted                                                                   34.4p


The total column of this statement represents the Group's Income Statement,
prepared in accordance with International Financial Reporting Standards. The
supplementary income return and capital return columns are both prepared under
guidance published by the Association of Investment Companies. All items in the
above statement derive from continuing operations.

All income is attributable to the equity holders of the parent company. There
are no minority interests.


Consolidated Statement of Changes in Equity
for the period from 15 September 2005 to 31 December 2006

                      Share Share Premium Distributable    Retained      Total
                    Capital       Account       Reserve    Earnings
                       £000          £000          £000        £000       £000

Balance as at 15          -             -             -           -          -
September 2005

Net profit for
the period                -             -             -     106,162    106,162
                    -------      --------    ----------    --------  ---------
Total
recognised
income and
expenses for
the period                -             -             -     106,162    106,162

Dividends paid            -             -             -     (17,835)   (17,835)

Issue of
ordinary
shares                    -       337,198             -           -    337,198

Issue costs               -        (7,199)            -           -     (7,199)

Transfer to
distributable
reserve                   -      (298,610)      298,610           -          -
                    -------      --------    ----------    --------  ---------
Balance as at
31 December
2006                      -        31,389       298,610      88,327    418,326
                    =======      ========    ==========    ========  =========


Consolidated Balance Sheet
as at 31 December 2006
                                                                          2006
                                                                          £000

Non-current assets
Investment properties                                                  702,167
                                                          --------------------
Total non-current assets                                               702,167

Current assets
Accounts receivable                                                      7,437
Cash and cash equivalents                                               37,873
                                                          --------------------
Total current assets                                                    45,310

Total assets                                                           747,477

Current liabilities
Accounts payable and accruals                                          (24,428)
                                                          --------------------
Total current liabilities                                              (24,428)

Non-current liabilities
Loans and borrowings                                                  (304,723)
                                                          --------------------
Total non-current liabilities                                         (304,723)

Total liabilities                                                     (329,151)
                                                          --------------------
Net assets                                                             418,326
                                                          ====================

Equity
Ordinary share capital                                                       -
Share premium account                                                   31,389
Distributable reserve                                                  298,610
Retained earnings                                                       88,327
                                                          --------------------
Total equity                                                           418,326
                                                          ====================

Net asset value per share                                                 1.26
                                                          ====================



Consolidated Cash Flow Statement
for the period from 15 September 2005 to 31 December 2006

                                                                          £000

Profit before tax                                                      106,622

Adjusted for
Interest received                                                       (1,617)
Interest paid                                                           12,549
Realised and unrealised gains on investments                           (83,720)
Amortisation of finance costs                                             (331)
                                                             -----------------
Operating profit before working capital changes                         33,503

Increase in trade and other receivables                                 (4,930)
Increase in trade and other payables                                    23,968
                                                             -----------------
                                                                        19,038

Net cash inflows from operating activities                              52,541

Cash flows from investing activities
Purchase of investment properties                                     (652,930)
Disposal of investment properties                                       25,756
Interest received                                                        1,617
                                                             -----------------
Net cash outflow from investing activities                            (625,557)

Cash flows from financing activities
Equity raised                                                          337,198
Proceeds from long term borrowings                                     738,000
Repayment of long term borrowings                                     (424,550)
Issue costs of borrowing & equity raising                              (10,037)
Interest paid on loans                                                 (12,549)
Dividends paid                                                         (17,835)
                                                             -----------------
Net cash inflows from financing activities                             610,227

Net increase in cash and cash equivalents                               37,211

Cash and cash equivalents at beginning of period                             -
                                                             -----------------
Cash and cash equivalents at end of period                              37,873
                                                             =================


Notes to the Preliminary Announcement

1. Accounting policies - Basis of preparation

This press release contains the financial information of ING UK Real Estate
Income Trust Limited (the 'Company') and its subsidiaries (together referred to
as the 'Group') for the period from 15 September 2005 to 31 December 2006.

The financial information is prepared on the historical cost basis except for
the revaluation of investment properties and is presented in pounds sterling
rounded to the nearest thousand.

The financial information set out above does not constitute the Company's
statutory accounts for the period ended 31 December 2006. Statutory accounts for
2006, prepared under IFRS as adopted by the International Accounting Standards
Board, will be delivered in due course. The auditors have reported on those
accounts; their report (i) was unqualified, (ii) did not include references to
any matters to which the auditors drew attention by way of emphasis without
qualifying their reports.

For further information:

All Enquiries

The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL

Tel: [phone]
Fax: [phone]

ING Real Estate Investment Management (UK) Limited
Selina Sasse, 020 7767 5756, [e-mail]

Financial Dynamics
Dido Laurimore/Stephanie Highett, 020 7831 3113




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