19th May 2009 17:25
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 255, Trafalgar Court, Les Banques,
St Peter Port, Guernsey GY1 3QL
T: 01481 745 001
Broker
William Simmonds
JP Morgan Cazenove
20 Moorgate, London, EC2R 6DA
T: 020 7588 2828
Investment and Property Manager
Michael Morris
ING Real Estate Investment Management (UK) Limited
2nd Floor, 25 Copthall Avenue, London, EC2R 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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