Net Asset Value and Interim D
ING UK Real Estate Income Trust Limited
29 July 2010
ING UK Real Estate Income Trust Limited (IRET) - Net Asset Value as at 30 June 2010 and Interim Dividend
The unaudited Net Asset Value ('NAV') of ING UK Real Estate Income Trust Limited (the "Company") as at 30 June 2010 was GBP 203.0million, reflecting approximately 59 pence per share.
The Company also announces an interim dividend of 1 pence per share in respect of the period 1 April 2010 to 30 June 2010. The dividend payment will be made on 31 August 2010 to shareholders on the register on 13 August 2010. The ex-dividend date will be 11 August 2010.
The NAV attributable to the Ordinary Shares is calculated under International Financial Reporting Standards ('IFRS') and reflects an increase of approximately 3 pence per share, or 4%, compared to the previous quarter. The NAV includes a downwards adjustment in respect of the mark to market value of the interest rate swaps of GBP 0.9million.
The acquisition of Rugby Estates Investment Trust plc, which became unconditional in all respects on 14 May, was the principal driver of NAV growth over the quarter. In addition, during the period, GBP 14.9million new shares were issued at the March NAV. As at 30 June 2010 the total number of shares in issue was 345,336,118.
This NAV figure incorporates the external portfolio valuation as at 30 June 2010. It includes income for the current quarter and is calculated after the deduction of dividends paid prior to 30 June 2010, but it does not include provision for the next quarterly dividend which is expected to be paid in August 2010.
The unaudited NAV is as follows:
|
|
30 Jun 2010 £m |
31 Mar 2010 £m |
31 Dec 2009 £m |
30 Sept 2009 £m |
|
Investment properties |
422.7 |
351.7 |
352.5 |
333.4 |
|
Other assets |
56.0 |
49.9 |
59.4 |
45.1 |
|
Other liabilities |
(20.2) |
(15.8) |
(15.2) |
(15.3) |
|
Borrowings: Securitised loan
Liquidity facility
RBS loan
Loan stock
ZDP's
|
(175.0)
(10.9)
(20.3)
(3.3)
(30.5) |
(175.0)
(10.9)
-
-
- |
(190.0)
(14.0)
-
-
- |
(190.0)
-
-
-
- |
|
Market value of interest rate swaps |
(15.5) |
(13.6) |
(11.6) |
(12.4) |
|
Net Asset Value |
203.0 |
186.3 |
181.1 |
160.8 |
The movements in the NAV can be summarised as follows;
|
|
Total |
Per share |
movement |
|
|
£m |
Pence |
% |
|
NAV at 31 March 2010 |
186.3 |
56 |
|
|
|
|
|
|
|
Gains in property values (realised and unrealised )
|
1.3 |
0.5 |
0.5 |
|
Movement in swap value
|
(0.9) |
- |
- |
|
Uplift attributable to rugby acquisition
|
6.4 |
2 |
3 |
|
New equity issuance
|
8.4 |
- |
- |
|
Net income for the period (after distributions) |
1.5 |
0.5 |
0.5 |
|
|
|
|
|
|
NAV at 30 June 2010 |
203.0
|
59 |
4 |
An external valuer will next value the property portfolio during September 2010 and the NAV per share as at 30 September 2010 will be issued in October 2010.
Investment Manager Commentary
As measured by the IPD Monthly Index, the market continued to slow over the quarter, recording capital growth of 1.9% at an All Property level.
Offices were the best performing sector, which recorded capital growth of 2.2%. In particular, the Central London subsectors delivered strong capital growth of 3.8% and 5.0% in the West End and City respectively. Rental growth remained negative for the ninth consecutive quarter, albeit positive in the Office sector, skewed by Central London, for the first time since April 2008.
The Company's sector weightings are set out below:
|
Sector |
Weighting 30 June 2010 |
Weighting 31 March 2010 |
|
|
|
|
|
Retail |
20.1% |
13.9% |
|
Offices - Central/Greater London |
12.1% |
13.9% |
|
Offices - Rest of UK |
21.7% |
25.4% |
|
Industrial |
34.3% |
33.1% |
|
Leisure |
4.6% |
5.1% |
|
Retail Warehouse |
7.2% |
8.6% |
|
Total |
100% |
100% |
As a result of the Rugby acquisition, the Company's regional office weighting has reduced from 25.4% to 21.7%, with an increase in the retail weighting from 13.9% to 20.1%. Approximately half of the increase in the retail exposure is attributable to the Long Acre, London, WC2 asset.
The positive NAV movement over the quarter was primarily attributable to positive valuation movement across both portfolios, the uplift attributable to the acquisition of Rugby REIT and fully covered dividend over the period.
On a like for like basis, the Company's existing portfolio recorded capital growth of 1.01% over the quarter. This excludes the Farringdon asset where the Company received a substantial premium to affect an early surrender of the lease.
In terms of the new assets acquired, on a like for like basis, these recorded capital growth of 1.17% between December 2009 and June 2010.
As at 30 June 2010, the portfolio had a Net initial yield of 7.02% and a Net reversionary yield of 8%. The occupancy rate was approximately 91% and the average lease length was 8.1 years.
The primary increase in vacancy rate over the quarter was partially attributable to the Farringdon surrender, which completed during the quarter and resulted in a payment of over GBP 4.0million to the Company. The building is to be refurbished with completion due in January 2011.
Following the quarter end, the Company has agreed to repay GBP 3.45million of securitised debt through the purchase and cancellation of loan notes at a discount to nominal value. Upon purchase and cancellation, which will occur simultaneously on 30 July, the Company will reduce its outstanding securitised loan balance to GBP 171.55million. These loan notes, which hold an AAA rating, will be acquired for a total consideration of GBP 3.22million, representing a 6.5% discount to nominal value. The Company will also prepay the corresponding SWAP amount, which is currently marked to market. The transaction is both NAV and dividend cover accretive.
The Company has started to dispose of non core assets following the Rugby acquisition and following the quarter end has exchanged contracts to sell three assets for GBP 1.68million with completion due on 26 August 2010. The disposal proceeds from these transactions were at a c.3% premium to their June valuations.
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: 01481 745529
Fax: 01481 745085
ING Real Estate Investment Management (UK) Limited
Helen Stott, 020 7767 5648 helen.stott@ingrealestate.co.uk
Financial Dynamics
Dido Laurimore, 020 7831 3113, dido.laurimore@fd.com
Laurence Jones, 020 7831 3113, laurence.jones@fd.com
This information is provided by RNS
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