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 1 July 2008 to 30 September 2008:
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 (At 30 September 2008)
25 October 2005
Shares in issue
4 pence (annual) *
GBP 151.98 million
Net Asset Value
GBP 276.9 million
GBP 486.9 million
Net Asset Value per Share
Number of Properties
Average Lot Size
GBP 9.4 million
Average Lease Length
GBP 282.2 million
Net Gearing **
Weighted Average Cost of Debt ***
Financial Year End
31 December 2008
30 June 2009
Dividend Payment Dates
Total Expense Ratio
1.31% Annualised to 30 September 2008
* With effect from 04/11/08
** 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
> NAV of approximately 83.8 pence per share.
> GBP 15 million of disposals completed over the quarter.
> Following quarter end repayment of £57.2 million of non-securitised debt.
> Revised Annual Dividend of 4 pence per share.
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 investment 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 will 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.
As at 30 September 2008 the Net Asset Value of the Company was GBP 276.9 million, reflecting approximately 83.8 pence per share. In line with the underlying real estate market, the underlying property portfolio saw a capital decline of -6.4%, which resulted in a reduction to the NAV of approximately 12.9 pence per share or a decrease of 13.3% over the quarter.
IRET - NAV & Share Price
Share Price (as at quarter end)
31 March 2006
30 June 2006
30 September 2006
31 December 2006
31 March 2007
30 June 2007
30 September 2007
31 December 2007
31 March 2008
30 June 2008
30 September 2008
Changes in Capital Structure
There were no changes to the capital structure over the quarter. Following the Quarter End, the company repaid GBP 57.2 million of non-securitised debt, reducing the overall level and cost of debt to GBP 225 million and 4.86% respectively.
Security of Income
As a percentage of current net annual rent, the length of the lease to the first termination is summarised below.
0 - 5 years
5 - 10 years
10 - 15 years
15 - 25 years
The covenant strength, based as a percentage of current passing rent by risk rating, is shown in the table below. The Company also holds GBP 1.38 million in rental deposits.
Un-Scored Ineligible (%)
ING UK REIT
Acquisitions and Disposals
Over the quarter the company completed on the disposal of assets in Balham and Mitcham for GBP 15 million. It also exchanged contracts on the disposal of an asset in Fulham for GBP 4.7 million.
Fund Managers Commentary
The quarter witnessed the failure of major financial institutions, which has resulted in a systematic shock to capital markets and required central bank and government intervention.
Amidst this turbulence, the UK commercial real estate market has seen yields continue to rise across all sectors and an increased rate of capital value decline with transaction volumes quarter on quarter continuing their decrease. IPD monthly Capital Growth Index showed a decline of -6.2% over the quarter and a decline of approximately 25% since its peak in June 2007.
With the changes announced to the level of dividend, the Company now operates a fully covered position (approximately 125%) which will strengthen its ability to withstand the challenging economic climate. The portfolio remains well balanced and diversified across assets, sectors and geographically. The Manager remains focussed on the need to ensure the net debt position is maintained in light of continued weakness in underlying market.
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. The provision of the information herein is permitted under Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. 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. This newsletter has been approved by ING Real Estate Investment Management (UK) Funds Ltd which is authorised and regulated by the Financial Services Authority.
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
JP Morgan Cazenove
20 Moorgate, London, EC2R 6DA
T: 020 7588 2828
Investment and Property Manager
ING Real Estate Investment Management (UK) Limited
2nd Floor, 25 Copthall Avenue, London, EC2R 7BP
T: 020 7767 5600