Interim Management Statement

RNS Number : 6879C

ING UK Real Estate Income Trust Ltd

18 November 2009

 



ING UK Real Estate Income Trust Limited

Interim Management Statement

Please find attached via the link below, the Interim Management Statement for ING UK Real Estate Income Trust Limited for the period 30 June 2009 to 30 September 2009:

http://www.ingreit.co.uk/default.aspx?page=investor-relations-quarterly&folder=1

With recent guidance from the FSA/AIC we have included the unedited full text of the announcement below:-

ING UK Real Estate Income Trust Limited

Q3 Interim Management Statement

Facts & Figures (as at 30 September 2009)

Launch Date	25 October 2005
Shares in issue	330.4 million
Share Price	42.5 pence
Dividend	1 pence per share paid 28/08/2009
Market Capitalization	GBP 140.4 million
Net Asset Value	GBP 160.8 million
Property Value	GBP 332.29 million
Net Asset Value per Share	49 pence
Number of Properties	42
Average Lot Size	GBP 7.91 million
Average Lease Length	8.36 years
Current Debt	GBP 190 million
Net Gearing*	46.1%
Weighted Average Cost of Debt**	4.87%
Financial Year End	31 December 2009
Half Year	30 June 2009
Dividend Payment Dates	Aug/Nov/Feb/May
Total Expense Ratio	1.29% Annualised to 30/09/2009

*      Net gearing is calculated as total debt

       less cash deposits as a proportion of 

       gross property asset value.

**       Excluding loan arrangement costs

Source: ING Real Estate

Key Highlights 

>   Increase of GBP 2.7 million in the underlying property portfolio value over the quarter, representing an increase of 0.8% on a like-for-like basis.

>   NAV of approximately 49 pence per share

>   GBP 26.8 million of disposals completed over the quarter, and repayment of GBP 35 million of securitised debt over the quarter, reducing ongoing interest costs by GBP 1.7 million per annum.

>   Management Fee Structure changed to an NAV basis with effect from 1st July 2009. 

>   Improvement in portfolio occupancy rate from 91% to 94% over the quarter.

 

About The Company

The Company is a closed-ended, Guernsey registered investment company. The Company was launched on the London and Channel Islands' Stock Exchanges on 25 October 2005. The property portfolio is managed by ING Real Estate Investment Management (UK) Limited, a member of the ING Group.

  Investment Objectives and Process

The Company's aim is to provide shareholders with an attractive level of income together with the potential for capital growth.

The Company can invest both directly and indirectly in UK commercial real estate. The Manager's investment process is research-led, guided by an interactive top-down and bottom-up approach.

Performance

As at 30th September 2009 the Net Asset Value of the Company was GBP 160.8 million, reflecting approximately 49 pence per share. The underlying property portfolio saw a capital increase of 0.8%, which combined with a negative mark to market movement in the swap valuation, resulted in a decrease in the NAV of c.0.7% over the quarter.

IRET - NAV & Share Price
Date	NAV	Share Price (as at quarter end)
30 September 2006	123 pence	122.5 pence
31 December 2006	126 pence	118 pence
31 March 2007	129 pence	121 pence
30 June 2007	133 pence	106.25 pence
30 September 2007	124 pence	101.5 pence
31 December 2007	112 pence	69.5 pence
31 March 2008	102 pence	69 pence
30 June 2008	97 pence	47.5 pence
30 September 2008	84 pence	46 pence
31 December 2008	64 pence	22.5 pence
31 March 2009	52 pence	19 pence
30 June 2009	49 pence	30.5 pence
30 September 2009	49 pence	42.5 pence

Changes in Capital Structure

Over the quarter end the Company pre-paid GBP 35 million of its securitised loan, reducing the total debt outstanding under the facility to GBP 190 million. The interest rate on the loan is 4.87%.

Diversification

Sector	Weighting (%)
Retail	13.6%
Offices	40.9%
Industrial	32.7%
Leisure	5.3%
Retail Warehouse	7.5%

(Source: ING REIM Sep 2009)

Geographical	Weighting (%)
Central London	7.9%
Greater London	5.4%
South East	23.6%
East	10.7%
Midlands	20.4%
South West	4.4%
North	18.4%
Wales	6.2%
Scotland	3.0%
Offshore UK	0.0%

(Source: ING REIM Sep 2009)

Security of Income

The property portfolio has an average unexpired lease term of 8.4 years. As a percentage of current net annual rent, the length of the lease to the first termination is summarised below. 

Lease Length	%
0 - 5 years	43.5%
5 - 10 years	33.2%
10 - 15 years	11.5%
15 - 25 years	7.6%
25 + years	4.1%

(Source: ING REIM Sep 2009)

The covenant strength, based as a percentage of current passing rent by risk rating, is shown in the chart below. The Company also holds GBP 1.29 million in rental deposits.

Risk Rating
	Negligible (%)	Low (%)	Low-Med (%)	Med-High (%)	High (%)	Max (%)	Un-Scored + Ineligible (%)
ING UK REIT	50.91	29.63	2.30	2.83	4.30	7.46	2.57
IPD Benchmark	47.39	20.24	8.46	3.03	5.83	9.62	5.43

(Source: IPD Jun 2009)

Acquisitions and Disposals

Over the quarter no acquisitions were made and the Company completed on 4 disposals for a consideration of GBP 26.8 million. 

Fund Managers Commentary

The UK Commercial Property Market, having experienced negative valuation movements since mid 2007, finally appears to be showing signs of stabilisation. The IPD Monthly Index showed positive capital growth in both August and September of 0.2% and 1.1% respectively. There appears to be both widened and increased investor demand and set against this backdrop, the majority of the Company's assets saw either an unchanged or positive revaluation movement over the quarter.

The Company repaid GBP 35 million of its securitised debt over the quarter, and also agreed a revised fee structure with its investment manager that is more closely aligned with investors. The Company remains compliant with its principal banking covenants.

Important Information

This newsletter is issued by ING UK Real Estate Income Trust Limited ("IRET"). It is based on information supplied by the Investment and Property Manager, ING Real Estate Investment Management (UK) Limited. This newsletter is intended for shareholders of IRET only. It is not a recommendation to deal or refrain from dealing in the shares of IRET. This newsletter should not be passed to any person other than an existing shareholder in IRET or their professional adviser. Any shareholder who requires advice on their investment in IRET should contact their stock broker, bank or independent financial adviser. 

  Contact Information

Fund Administration

Stephanie Saunders

Northern Trust International Fund

Administration Services (Guernsey) Limited

P.O. Box 255, Trafalgar Court, Les Banques, 

St Peter Port, Guernsey GY1 3QL

T: 01481 745 001

Broker

William Simmonds

JP Morgan Cazenove

20 Moorgate, London, EC2R 6DA

T: 020 7588 2828

Investment and Property Manager

Michael Morris

ING Real Estate Investment Management (UK) Limited

2nd Floor, 25 Copthall Avenue, London, EC2R 7BP

T: 020 7767 5600

Website

www.ingreit.co.uk

 

END

 

 

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