NAV and Interim Dividend (5450F)

TIDMIRET

RNS Number : 5450F

ING UK Real Estate Income Trust Ltd

27 April 2011

ING UK Real Estate Income Trust Limited

27 April 2011

ING UK Real Estate Income Trust Limited (IRET) - Net Asset Value as at 31 March 2011 and Interim Dividend

The unaudited Net Asset Value ('NAV') of ING UK Real Estate Income Trust Limited (the "Company") as at 31 March 2011 increased by 1.1% over the quarter to GBP 209.2m, reflecting approximately 61 pence per share.

The Company also announces an interim dividend of 1 pence per share in respect of the period 1 January 2011 to 31 March 2011. The dividend payment will be made on 27 May 2011 to shareholders on the register on 13 May 2011. The ex-dividend date will be 11 May 2011.

The NAV attributable to the Ordinary Shares is calculated under International Financial Reporting Standards ('IFRS') and reflects an increase of approximately 1 pence per share compared to the previous quarter. At an underlying property level there has been a like for like increase in the property portfolio valuation over the period of 0.5%.

This NAV figure incorporates the external portfolio valuation as at 31 March 2011. It includes income for the current quarter and is calculated after the deduction of dividends paid prior to 31 March 2011, but it does not include provision for the next quarterly dividend which is expected to be paid in May 2011.

The unaudited NAV is as follows:

 
                             31 Mar    31 Dec    30 Sept   30 Jun 
                               2011      2010      2010      2010 
                               GBPm      GBPm      GBPm      GBPm 
 Investment properties        425.6     424.3     422.6     422.7 
 Other assets                 41.9      42.4      49.1      56.0 
 Other liabilities           (16.2)    (15.6)    (18.2)    (20.2) 
 Borrowings: Securitised 
  loan                       (171.6)   (171.6)   (171.6)   (175.0) 
  Liquidity facility          (10.7)    (10.7)    (10.7)    (10.9) 
  RBS loan                    (20.1)    (20.4)    (20.4)    (20.3) 
  Loan stock                  (2.3)     (2.6)     (2.6)     (3.3) 
  ZDP's                       (28.0)    (27.6)    (31.0)    (30.5) 
 Market value of interest 
  rate swaps                  (9.4)    (11.3)    (13.8)    (15.5) 
 Net Asset Value              209.2     206.9     203.4     203.0 
 Net Asset Value per 
  share                        61p       60p       59p       59p 
 EPRA Net Asset Value         218.5     218.2     217.2     218.5 
 EPRA Net Asset Value          63p       63p       63p       63p 
  per share 
 

The European Public Real Estate Association (EPRA) NAV ignores mark to market swap liability or gains and increased to GBP 218.5m from GBP 218.2m

The movements in the NAV can be summarised as follows;

 
                              Total   Per share   movement 
                              GBPm      Pence        % 
 NAV at 31 December 2010      206.9      60 
 
 Gains in property values 
  (realised and unrealised 
  )                            0.6        -          - 
 Movement in swap value        2.0        1          1 
 Net income for the period 
  (after distributions)       (0.3)       -          - 
 
 NAV at 31 March 2011         209.2      61          1 
 

An external valuer will next value the property portfolio during June 2011 and the NAV per share as at 30 June 2011 will be issued in July 2011.

Investment Manager Commentary

BACKGROUND

Capital growth across the wider market remains muted with the IPD Monthly Index showing an increase of 0.6% over the quarter, at a marginally better rate than seen in Q3 or Q4 2010. Rental growth has still yet to turn positive at 0% over the quarter, nevertheless this is the eighth consecutive quarter on quarter improvement since Q2 2009.

Capital growth appears to be regionally split and in particular Central London continues to be a robust market.

Average occupancy rates across the market continued to remain broadly stable and stand at circa 90%.

PORTFOLIO COMPOSITION

 
                                Weighting 
 Sector                        31 March 2011 
 
 Retail                            19.7 
 Offices - Central/Greater 
  London                           13.8 
 Offices - Rest of UK              21.1 
 Industrial                        33.7 
 Leisure                           4.5 
 Retail Warehouse                  7.2 
 Total                             100% 
 

GEOGRAPHICAL WEIGHTINGS

 
                             Weighting 
 Geography                  31 March 2011 
 
 Central London                 13.7 
 Greater London                 7.2 
 South East                     31.0 
 South West                     4.6 
 East Midlands                  12.2 
 West Midlands                  4.6 
 Yorkshire & the Humber         4.7 
 North West                     11.0 
 North East                     2.4 
 Scotland                       2.5 
 Wales                          5.5 
 Northern Ireland               0.6 
 Total                          100% 
 

TOP TEN ASSETS

 
                                           Weighting 
 Asset                                    31 March 2011 
 Unit 5320, Magna Park, Lutterworth           6.9 
 River Way Industrial Estate, 
  Harlow                                      6.4 
 Stanford House, 12/14 Long 
  Acre, WC2                                   4.7 
 Phase II, Parc Tawe, Swansea                 4.2 
 Colchester Business Park, Colchester         3.5 
 Angouleme Way, Bury                          3.0 
 Boundary House, 7-17 Jewry 
  Street, EC3                                 2.9 
 50 Farringdon Road, EC1                      2.9 
 1-3 Chancery Lane, WC2                       2.6 
 Crown & Mitre Hotel Complex, 
  Carlisle                                    2.5 
 Total                                       39.6% 
 

PORTFOLIO UPDATE

Capital value movements within the portfolio have stabilised in line with the wider market seeing a like for like uplift of 0.5% for the quarter. This movement was driven by a strong performance of the Central and Greater London assets with the remainder of the portfolio showing little movement.

The Company is continuing with its disposal programme of non core assets and during the period completed the successful sale of two assets and exchanged contracts on a further two. The disposals were for a combined consideration of GBP 2.1m, in line with valuation. Two of these properties were non income producing.

Letting activity across the portfolio was encouraging with the completion of nine lettings, seven lease renewals and five active management transactions spread across the portfolio both geographically and by sector. Of particular note was the holding in Carlisle where we have restructured Topshop's lease, agreeing terms for a new 10 year lease at GBP 230,000 per annum ahead of their break in August of this year. In addition, we renewed a further lease with Specsavers for a minimum term of 10 years at a rent of GBP 63,500 per annum.

The scheme at 50 Farringdon Road, EC1 was completed during the period and the building now provides approximately 32,000 sq ft (3,000 sq m) of fully refurbished office accommodation. Quoting terms reflect GBP35 per sq ft and the rent roll is expected to be in excess of GBP 1.0m per annum once fully income producing. The property is now being formally marketed and is generating good occupier interest.

As at the 31 March 2011 the portfolio had a net initial yield of 7.1% and a net reversionary yield of 7.8%. The occupancy rate remains stable at 90% and the average lease length is 7.8 years.

DEBT

The Company continues to reduce the overall level of borrowings where disposals are made and as such repaid GBP 0.3m of the RBS loan in January.

As part of the process of winding up of the Rugby REIT structure the Company also repaid GBP 0.3m of loan stock.

INTERNALISATION UPDATE

During the period the Company announced its intention to change its name to Picton Property Income Limited and will ask for shareholder approval for the name change at the forthcoming AGM in May.

The Company has created a wholly owned Investment Management subsidiary called Picton Capital Limited which is located in part of one of the Company's assets at 28 Austin Friars, EC2. Michael Morris, former fund manager, will become Chief Executive and Andrew Dewhirst, former Director of Client Accounting at ING REIM, will become Finance Director.

Commenting, Nick Thompson, Chairman of the Company, said:

"Operationally, our central focus for the Company remains to actively manage the portfolio in order to enhance income and we have continued to make good progress on this over the period. Letting activity has been encouraging and we have signed a number of new leases across the portfolio, with the completion of our Farringdon refurbishment providing potential for significant additional income to be achieved.

"The process towards internalisation is progressing well and we look forward to delivering the significant benefits of this to our shareholders."

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: [phone]

Fax: [phone]

ING Real Estate Investment Management (UK) Limited

Helen Stott, 020 7767 5648 [e-mail]

Financial Dynamics

Dido Laurimore, 020 7831 3113, [e-mail]

Laurence Jones, 020 7831 3113, [e-mail]

Picton Capital Limited

Michael Morris, 020 7628 4800, [e-mail]

This information is provided by RNS

The company news service from the London Stock Exchange

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