Net Asset Value(s)

RNS Number : 3582W

ING UK Real Estate Income Trust Ltd

28 July 2009

 



ING UK Real Estate Income Trust Limited

28 July 2009

ING UK Real Estate Income Trust Limited (IRET) - Net Asset Value as at 30 June 2009

The unaudited Net Asset Value ('NAV') per share of ING UK Real Estate Income Trust Limited (the 'Company') as at 30 June 2009 was GBP 162.0 m, reflecting approximately 49 pence per share.  

The NAV attributable to the Ordinary Shares is calculated under International Financial Reporting Standards ('IFRS') and reflects a decrease of approximately 3 pence per share, or 6%, compared to the previous quarter. It includes an upwards adjustment in respect of the mark to market value of the interest rate swaps of GBP 5.5 m. Excluding asset sales there has been a GBP 16.8 m reduction in NAV, representing a 4.5% reduction in the underlying property portfolio over the period.

This NAV figure incorporates the external portfolio valuation as at 30 June 2009. It includes income for the current quarter but does not include provision for the next quarterly dividend announced separately today of 1 pence per share which will be paid in August 2009. 

The unaudited NAV is as follows:

	30 June 2009 £m	31 March  2009 £m	31 December 2008 £m	30 September 2008 £m
Investment properties	357.3	395.6	436.0	488.7
Other assets	56.7	36.2	28.6	84.4
Other liabilities	(15.8)	(17.0)	(15.3)	(19.1)
Borrowings	(225.0)	(225.0)	(225.0)	(282.2)
	173.2	189.8	224.3	271.8
Market value of interest rate swaps	(11.2)	(16.7)	(14.0)	5.1
Net Asset Value	162.0	173.1	210.3	276.9

The movements in the NAV can be summarised as follows;

	Total	Per share	movement
	£'000	pence	%
NAV at 31 March 2009	173.1	52
Losses in property values (realised and unrealised )	(19.1)	(6)	(10)
Increase in swap value	5.5	2	3
Net income for the period	2.5	1	1
NAV at 30 June 2009	162.0	49	(6)

An external valuer will next value the property portfolio during September 2009 and the NAV per share as at 30 September 2009 will be issued in October 2009. The Half Yearly Financial Report covering the 6 months to 30 June 2009 is currently under review by the Company's auditor, and will be published in August 2009.

Investment manager commentary

The IPD Monthly index has now declined over 44% since June 2007. The Index has shown a slowing rate of decline month on month over this quarter, with a total decline of 4.7%. This compares with an average of 10% over the preceding three quarters.

Set against this backdrop, the Company's assets were subject to negative, but significantly reduced revaluation movements over the quarter.

The movements and current sector weightings are detailed below:

Sector	Capital Valuation Movement	Weighting 30 June 2009
Retail	-3.7%	12.1%
Offices - Central/Greater London	-8.5%	12.4%
Offices - Rest of UK	-4.5%	31.4%
Industrial	-2.5%	32.2%
Leisure	-1.3%	5.1%
Retail Warehouse	-9.4%	6.8%
Total	-4.5%	100.0%

As a result of the marked revaluation since September 2007, the portfolio now has a Net initial yield of 8.55% and a Net reversionary yield of 9.26%.

Over the quarter no acquisitions were made and the Company completed the disposals of four assets for a total consideration of £20.8m. The proceeds of these disposals will enable the Company to repay £35m of debt before the end of July in order to meet its commitments in accordance with its earlier covenant restructuring. This will provide further operational flexibility and reduce the negative carry associated with holding cash on the balance sheet, which will enhance the dividend cover.

At the quarter end occupancy rate was 91%.  This will increase to 93% in August following the completion of the sale of the largest void in the portfolio which was announced earlier this month. The average lease length of the portfolio is 8.5 years.

The Company remains compliant with its principal banking covenants, with a current LTV for its securitised pool of 51.9% and an Interest Cover Ratio of 2.35 as at the Q2 test date.  The Company continues to have operational funds outside the securitised pool.

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

Helen Stott, 020 7767 5648 [e-mail]

Financial Dynamics

Dido Laurimore, 020 7831 3113, [e-mail] 

Laurence Jones, 020 7831 3113, [e-mail]

 

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