Net Asset Value(s)

RNS Number : 0778M

ING UK Real Estate Income Trust Ltd

22 January 2009

 



ING UK Real Estate Income Trust Limited

22 January 2009

ING UK Real Estate Income Trust Limited (IRET) - Net Asset Value as at 31 December 2008 

The unaudited Net Asset Value ('NAV') per share of ING UK Real Estate Income Trust Limited (the 'Company') as at 31 December 2008 was GBP 210.3 m, reflecting approximately 64 pence per share.  

The NAV attributable to the Ordinary Shares is calculated under International Financial Reporting Standards ('IFRS') and reflects a decrease of approximately 20 pence per share, or 24.0%, since the previous quarter. It includes a downwards adjustment in respect of the mark to market value of the interest rate swaps of GBP 19.2 m. Excluding asset sales there has been a GBP 47.9 m reduction in the value of the underlying property portfolio, representing 9.9% decline over the period.

This NAV figure incorporates the external portfolio valuation as at 31 December 2008. It includes income for the current quarter and is calculated after the deduction of dividends paid prior to 31 December 2008, but it does not include provision for the next quarterly dividend which is expected to be paid in February 2009. 

The unaudited NAV is as follows:

	31 December 2008 £m	30 September 2008 £m	30 June 2008 £m	31 March  2008 £m
Investment properties	436.0	488.7	536.1	599.0
Other assets	28.6	84.4	70.5	35.7
Other liabilities	(15.3)	(19.1)	(19.0)	(18.2)
Borrowings	(225.0)	(282.2)	(282.2)	(282.2)
	224.3	271.8	305.4	334.3
Market value of interest rate swaps	(14.0)	5.1	14.0	3.5
Net Asset Value	210.3	276.9	319.4	337.8

The movements in the NAV can be summarised as follows;

	Total	Per share	movement
	£'000	pence	%
NAV at 30 Sept 2008	276.9	84
Losses in property values (realised and unrealised )	(48.5)	(15)	(18)
Decrease in swap value	(19.2)	(6)	(7)
Net income for the period (after distributions)	1.1	1	1
NAV at 31 Dec 2008	210.3	64	(24)

The property portfolio will next be valued by an external valuer during March 2009 and the NAV per share as at 31 March 2009 will be issued in April 2009.

The Company will be preparing its next Annual Report to 31 December 2008, and this will be issued to shareholders in April 2009. The figures at that date are subject to audit.

Investment Manager Commentary

Over the quarter the Global and UK economy continued to show signs of further deterioration and as such the Bank of England sharply lowered interest rates as the economy contracted. With regard to the UK commercial property sector, the IPD Monthly Index showed a capital decline of 15% over the quarter, which was the largest downward movement ever recorded. 

Set against this backdrop, the Company's assets were subject to further negative revaluation movements which affected all sectors. 

The movements and current sector weightings are detailed below:

Sector	Capital Valuation Movement	Weighting 31 December 2008
Retail	-7.2%	12.1%
Offices - Central/Greater London	-16.9%	13.7%
Offices - Rest of UK	-9.2%	34.0%
Industrial	-8.5%	29.2%
Leisure	-3.0%	4.4%
Retail Warehouse	-13.2%	6.6%
Total	-9.9%	100.0%

The Company's rent roll was affected by seven administrations including the retailers Adams, Rosebys, and Jonathan James. In total this represented only 1.55% of the total rental income and the Manager expects to maintain income on a number of these units, either through guarantees or active discussions with interested parties.

The Company's occupancy rate is 92% and through active management and a number of lease renewals, lettings and lease regears, the overall weighted average lease length on the portfolio has increased to 9.1 years, compared to 8.8 years as at 30 September 2008.

The Company remains compliant with its principal banking covenants, with a current LTV of 49.6% and an Interest Cover Ratio of 2.54.

The Company made no acquisitions over the quarter and completed on the disposal of a property in Fulham for GBP 4.7 m. Two further disposals have been announced post quarter end for a combined consideration of GBP 7.25 m, continuing the Company's strategy to reduce the net debt position within the Company.

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]

 

END

 

 

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