RNS Number : 5304S
ING UK Real Estate Income Trust Ltd
19 May 2009
 



ING UK Real Estate Income Trust Limited ('IRET')


Date 19 May 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 31 December 2008 to 31 March 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

Q1 Interim Management Statement


Facts & Figures (as at 31 March 2009)


Launch Date

25 October 2005

Shares in issue

330.4 million

Share Price

19 pence

Dividend

1 pence per share paid 27/2/09

Market Capitalization

GBP 62.78 million

Net Asset Value

GBP 173.1 million

Property Value

GBP 393.85 million

Net Asset Value per Share

52.4 pence

Number of Properties

50

Average Lot Size

GBP 7.88 million

Average Lease Length

8.97 years

Current Debt

GBP 225 million

Net Gearing*

49.4%

Weighted Average Cost of Debt**

4.86%

Financial Year End

31 December 2009

Half Year

30 June 2009

Dividend Payment Dates

Aug/Nov/Feb/May

Total Expense Ratio

1.33% Annualised to 31/03/2009


*      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 


NAV of approximately 52 pence per share.

GBP 7.25 million of disposals over the quarter with a further GBP 11.1 million following the quarter end.

Successful renegotiation of loan covenants following the quarter end, increasing the LTV covenant.

Q1 dividend passed to minimise asset sales and fund break costs associated with loan restructuring.



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 31st March 2009 the Net Asset Value of the Company was GBP 173.1 million, reflecting approximately 52 pence per share. In line with the underlying real estate market, the underlying property portfolio saw a capital decline of 7.8%, which combined with the mark to market movement in the swap valuation, resulted in a reduction to the NAV of approximately 12 pence per share or a decrease of c.18% 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



Changes in Capital Structure


There were no changes in the capital structure over the quarter. 



Diversification


Sector

Weighting (%)

Retail

12.0%

Offices

46.6%

Industrial

29.9%

Leisure

4.7%

Retail Warehouse

6.8%










Geographical

Weighting (%)

Central London

8.6%

Greater London

4.8%

South East

24.4%

East

10.8%

Midlands

19.4%

South West

5.2%

North

15.6%

Wales

5.9%

Scotland

3.4%

Offshore UK

1.9%



Security of Income


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

35.2%

5 - 10 years

38.9%

10 - 15 years

15.6%

15 - 25 years

6.7%

25 + years

3.6%


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 1.36 million in rental deposits.


Risk Rating


Negligible (%)

Low 

(%)

Low-Med (%)

Med-High

(%)

High 

(%)

Max 

(%)

Un-Scored + Ineligible (%)

ING UK REIT

47.48

30.54

7.69

2.68

4.86

4.85

1.9

IPD Benchmark

39.78

25.94

11.67

6.32

4.47

7.23

4.59



Acquisitions and Disposals


Over the quarter the Company completed on the disposals of the Welwyn Garden City asset for GBP 6 million and the car park at Scots Corner, Birmingham for GBP 1.25 million. Further disposals of GBP 11.1 million have completed following the quarter end.



Fund Managers Commentary


Over the quarter the IPD Quarterly Index showed a capital decline of 8.7%, taking the total decline since the market peak in June 2007 to approximately 40%. The Company, with an ungeared total return over the quarter of -6.0%, continued to outperform the IPD benchmark. The asset disposal programme is ongoing, with over GBP 18.4 million of asset sales completing since the start of the year. With an occupancy rate of approximately 91 percent, the underlying cashflow of the Company remains robust. 


The main focus of the Company over the quarter has been on the proposed restructuring of the Securitised Loan Facility which was approved by Noteholders on the 15th May. The principal amendments include a relaxation of the LTV Covenant from 50% to 60% and a tightening of the interest cover ratio from 1.5 times to 1.75 times. Furthermore, the Company will pre-pay GBP 35 million of the loan by January 2010.


These changes have been achieved without increased margin costs.



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 255Trafalgar Court, Les Banques, 

St Peter PortGuernsey GY1 3QL

T: 01481 745 001


Broker


William Simmonds

JP Morgan Cazenove

20 Moorgate, LondonEC2R 6DA

T: 020 7588 2828


Investment and Property Manager


Michael Morris

ING Real Estate Investment Management (UK) Limited

2nd Floor, 25 Copthall AvenueLondonEC2R 7BP

T: 020 7767 5600


Website

www.ingreit.co.uk




All Enquiries


The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court

Les Banques

St Peter Port

Guernsey

GY1 3QL


Tel:    01481 745814

Fax:    01481 745085


END





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