Net Asset Value(s)

RNS Number : 9544A

ING UK Real Estate Income Trust Ltd

19 October 2009

 

ING UK Real Estate Income Trust Limited

19 October 2009

ING UK Real Estate Income Trust Limited (IRET) - Net Asset Value as at 30 September 2009

The unaudited Net Asset Value ('NAV') per share of ING UK Real Estate Income Trust Limited (the "Company") as at 30 September 2009 was GBP 160.8m, reflecting approximately 49 pence per share.  

Excluding asset sales there has been a GBP 2.7m increase in the underlying property portfolio valuation, representing a 0.8% increase over the period.

The NAV attributable to the Ordinary Shares is calculated under International Financial Reporting Standards ('IFRS') and has remained broadly in line with the NAV in the previous quarter. It includes a downwards adjustment in respect of the mark to market value of the interest rate swaps of GBP 1.1m.  

This NAV figure incorporates the external portfolio valuation as at 30 September 2009. It includes income for the current quarter and is calculated after the deduction of dividends paid prior to 30 September 2009, but it does not include provision for the next quarterly dividend which is expected to be paid in November 2009.

The unaudited NAV is as follows:

	30 Sept 2009 £m	30 Jun 2009 £m	31 Mar 2009 £m	31 Dec 2008 £m
Investment properties	333.4	357.3	395.6	436.0
Other assets	45.1	56.7	36.2	28.6
Other liabilities	(15.3)	(15.8)	(17.0)	(15.3)
Borrowings	(190.0)	(225.0)	(225.0)	(225.0)
Market value of interest rate swaps	(12.4)	(11.2)	(16.7)	(14.0)
Net Asset Value	160.8	162.0	173.1	210.3

The movements in the NAV can be summarised as follows;

	Total	Per share	movement
	£'000	pence	%
NAV at 30 June 2009	162.0	49
Gains in property values (realised and unrealised )	1.4	0.1	1
Swap break costs due to loan repayment	(1.8)	(0.1)	(1)
Movement in swap value	(1.1)	(0.1)	(1)
Net income for the period	0.3	0.1	-
NAV at 30 September 2009	160.8	49	(1)

An external valuer will next value the property portfolio during December 2009 and the NAV per share as at 31 December 2009 will be issued in January 2010. The Company will be preparing its next Annual Report to 31 December 2009, and this will be issued to shareholders in April 2010. The figures at that date are subject to audit.

Investment Manager 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 movements and current sector weightings are set out in more detail below:

Sector	Capital Valuation Movement	Weighting 30 September 2009
Retail	4.5%	13.6%
Offices - Central/Greater London	0.1%	13.3%
Offices - Rest of UK	-0.7%	27.6%
Industrial	1.3%	32.7%
Leisure	-2.4%	5.3%
Retail Warehouse	1.6%	7.5%
Total	0.8%	100.0%

As a result of the marked revaluation since September 2007, the portfolio now has a Net initial yield of 8.51% and a Net reversionary yield of 9.02%.

Over the period the Company repaid GBP 35 million of its securitised debt, reducing ongoing interest costs by GBP 1.7m and incurred a one off cost associated with the swap breakage of GBP 1.8m.

There has been an improvement in occupancy rates across the portfolio, and at the quarter end this increased to 94% from 91% as a result of further lettings and the freehold disposal of the Company's largest rental void. The average lease length of the portfolio is 8.4 years.

The Company remains compliant with its principal banking covenants, which have improved since June, with a current LTV for its securitised pool of 50.5% and an Interest Cover Ratio of 2.42 as at the Q3 test date. The Company continues to have operational funds outside the securitised pool.

For further information:

All Enquiries

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]

 

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