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:
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)
25 October 2005
Shares in issue
1 pence per share paid 27/2/09
GBP 62.78 million
Net Asset Value
GBP 173.1 million
GBP 393.85 million
Net Asset Value per Share
Number of Properties
Average Lot Size
GBP 7.88 million
Average Lease Length
GBP 225 million
Weighted Average Cost of Debt**
Financial Year End
31 December 2009
30 June 2009
Dividend Payment Dates
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
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.
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
Share Price (as at quarter end)
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
31 December 2008
31 March 2009
Changes in Capital Structure
There were no changes in the capital structure over the quarter.
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 chart below. The Company also holds GBP 1.36 million in rental deposits.
Un-Scored Ineligible (%)
ING UK REIT
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.
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.
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
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
St Peter Port
Tel: 01481 745814
Fax: 01481 745085