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 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



This information is provided by RNS
The company news service from the London Stock Exchange
 
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