Net Asset Value(s)

RNS Number : 9439U

ING UK Real Estate Income Trust Ltd

25 October 2010

ING UK Real Estate Income Trust Limited

25 October 2010

ING UK Real Estate Income Trust Limited (IRET) - Net Asset Value as at 30 September 2010, Interim Dividend and Interim Management Statement

The unaudited Net Asset Value ('NAV') of ING UK Real Estate Income Trust Limited (the "Company") as at 30 September 2010 was GBP 203.4 million, reflecting an increase of 0.2% over the quarter and approximately 59 pence per share.

The Company also announces an interim dividend of 1 pence per share in respect of the period 1 July 2010 to 30 September 2010. The dividend payment will be made on 30 November 2010 to shareholders on the register on 12 November 2010. The ex-dividend date will be 10 November 2010.

The NAV attributable to the Ordinary Shares is calculated under International Financial Reporting Standards ('IFRS'). At an underlying property level there has been a 0.4% like for like increase in the property portfolio valuation over the period.

This NAV figure incorporates the external portfolio valuation as at 30 September 2010. It includes income for the current quarter and is calculated after the deduction of dividends paid prior to 30 September 2010, but it does not include provision for the next quarterly dividend.

The unaudited NAV is as follows:

	30 Sept 2010 £m	30 Jun 2010 £m	31 Mar 2010 £m	31 Dec 2009 £m
Investment properties	422.6	422.7	351.7	352.5
Other assets	49.1	56.0	49.9	59.4
Other liabilities	(18.2)	(20.2)	(15.8)	(15.2)
Borrowings: Securitised loan Liquidity facility RBS loan Loan stock ZDP's	(171.6) (10.7) (20.4) (2.6) (31.0)	(175.0) (10.9) (20.3) (3.3) (30.5)	(175.0) (10.9) - - -	(190.0) (14.0) - - -
Market value of interest rate swaps	(13.8)	(15.5)	(13.6)	(11.6)
Net Asset Value	203.4	203.0	186.3	181.1
Net Asset Value per share	59p	59p	56p	55p

The European Public Real Estate Association (EPRA) Adjusted NAV ignores mark to market swap liability or gains and is GBP 217.2 million or approximately 63 pence per share.

The movements in the NAV can be summarised as follows;

	Total	Per share	movement
	£m	Pence	%
NAV at 30 June 2010	203.0	59

Gains in property values (realised and unrealised )	1.3	0.5	0.5
Gains on loan note repurchase	0.2	-	-
Movement in swap value (realised and unrealised)	(0.1)	-	-
Net income for the period (after distributions)	(1.0)	(0.5)	(0.5)

NAV at 30 September 2010	203.4	59	-

An external valuer will next value the property portfolio during December 2010 and the NAV per share as at 31 December 2010 will be issued in January 2011.

Investment Manager Commentary

BACKGROUND

According to the IPD Monthly Index, capital growth between July and September was 0.5%, a marked slowdown compared to the 1.9% recorded for the previous quarter.

Capital growth remains muted with the exception of Central London offices, which recorded the largest gains, driven in part by positive rental value growth. The industrial sector was the only sector to record negative capital growth with value movements of -0.1% over the quarter.

Whilst rental growth remains negative, the rate of decline has continued to slow quarter-on-quarter. The only subsector recording positive rental growth over the period was Central London Offices.

According to the IPD Monthly Index, occupancy rates have improved for the third consecutive quarter. There was an increase between June and September 2010 from 89.9% to 90.1%.

PORTFOLIO COMPOSITION

Sector	Weighting 30 September 2010

Retail	19.9%
Offices - Central/Greater London	12.2%
Offices - Rest of UK	21.8%
Industrial	34.2%
Leisure	4.6%
Retail Warehouse	7.3%
Total	100%

GEOGRAPHICAL WEIGHTINGS

Geography	Weighting 30 September 2010

Central London	12.5%
Greater London	6.9%
South East	31.5%
South West	4.8%
East Midlands	12.5%
West Midlands	4.7%
Yorkshire & the Humber	4.8%
North West	11.3%
North East	2.4%
Scotland	2.5%
Wales	5.5%
Northern Ireland	0.6%
Total	100.0%

TOP TEN TENANTS

Asset	Weighting 30 September 2010
Unit 5320, Magna Park, Lutterworth	7.1%
River Way Industrial Estate, Harlow	6.3%
Stanford House, Long Acre, London	4.6%
Phase II, Parc Tawe, Swansea	4.2%
Colchester Business Park, Colchester	3.4%
Angouleme Way, Bury	3.0%
Crown & Mitre Hotel Complex, Carlisle	2.6%
Boundary House, Jewry Street, London	2.5%
Grafton Gate East, Milton Keynes	2.5%
Chancery Lane, London	2.4%
Total	38.6%

PORTFOLIO UPDATE

The Company's portfolio valuation movements were broadly inline with the IPD Index, with the Central London weighting recording the largest capital growth.

There have been no significant changes to the portfolio composition over the period, albeit the Company successfully disposed of three small industrial/retail assets at a premium to valuation. This disposal programme is continuing and the Company has a number of smaller assets in solicitors' hands.

As at 30 September 2010, the portfolio had a Net initial yield of 6.9% and a Net reversionary yield of 7.8%. The occupancy rate was approximately 91% and the average lease length was 7.9 years.

The vacancy rate remained stable over the period. In respect of the Company's largest void in Farringdon, Central London, works have commenced on site for the refurbishment of the asset with completion due at the end of 2010. Planning permission was received for a new entrance as part of the refurbishment scheme.

Notable transactions during the quarter include the letting of a vacant office suite at Austin Friars, London, 20% ahead of the preceding rental value.

In Colchester, the Company extended the income maturity of the property by removing two break options due in 2012 at rentals of GBP 202,000 per annum and GBP 148,000 per annum to 2017 and 2022 respectively.

In Guildford, the Company surrendered a lease of a high street retail unit and simultaneously re-let the accommodation to the retailer, Toast, at GBP 147,500 per annum, achieving a 6% increase in income and lengthening the lease profile, further enhancing asset value.

DEBT

As at 30 September 2010 total debt, ignoring the CMBS liquidity facility was GBP 225.6 million. Of this, GBP 214.6 million is fixed at a rate of 5.07% and GBP 11.0 million is floating at a rate of 2.24%.

During the quarter, as previously announced, the Company restructured its loan with RBS and has also broken and reset the interest rate SWAP relating to part of the loan, saving approximately GBP 420,000 on interest costs per annum, incurring a one off charge of GBP 1.5 million.

As part of the asset transfer, and in order to facilitate a wind up of IRET Securities Investments Ltd, formerly Rugby Estates Investment Trust Plc, the Company issued replacement loan stock to the value of GBP 2.3 million and repaid GBP 714,000.

In addition, the Company acquired and cancelled GBP 3.45 million of securitised loan notes, which were purchased at a 6.5% discount to par value.

OTHER

Following shareholder approval at the AGM in August, the Company's Investment Policy was amended to allow a wider investment mandate, details of which are available on the Company's website.

For further information:

All Enquiries

David Sauvarin

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court

Les Banques

St Peter Port

Guernsey

GY1 3QL

Tel: 01481 745529

Fax: 01481 745085