New Management Arrangements (0544Y)
December 16 2010 - 2:00AM
UK Regulatory
TIDMIRET
RNS Number : 0544Y
ING UK Real Estate Income Trust Ltd
16 December 2010
16 December 2010
ING UK Real Estate Income Trust Limited
('IRET'/ or the 'Company')
NEW MANAGEMENT ARRANGEMENTS
ING UK Real Estate Income Trust Limited, a closed-ended,
Guernsey registered investment company, announces today that the
Board has decided to internalise its investment management and has
given notice to terminate its management agreement with ING UK Real
Estate Investment Management (UK) Limited ('ING REIM'/ or the
'Manager').
Key points
-- Decision to internalise the investment management
function
-- Notice has been served on ING REIM terminating their contract
to manage the portfolio with effect from 31 December 2011
-- Creation of a new wholly owned investment management
subsidiary, to replace ING REIM
-- Michael Morris, the current Fund Manager who has been
involved since launch, and who is a senior director of ING REIM the
Company's investment manager has agreed that he will oversee the
implementation of the Board's internalisation plan to ensure
continuity in the management of the Company's assets. He will be
appointed Chief Executive of the Company's wholly owned investment
management subsidiary once it has been established
-- Post internalisation, the Company will remain domiciled in
Guernsey thus retaining its tax efficient status
-- The Company's strategy will continue to focus on the active
management of the Company's GBP 422.6 million portfolio (30
September 2010) which generated annualised rental income of GBP
31.3 million as of 30 September 2010
Background
The Board of IRET has been very satisfied with the performance
of ING REIM and is particularly pleased by the completion of two
more recent initiatives which Michael led, namely restructuring the
Company's securitised debt in 2009 and the acquisition of Rugby
Estates Investment Trust, earlier this year.
However, it was announced in mid 2010 by ING Group that it was
to undertake a strategic review of the ING REIM business and that
advisors had been appointed to manage this process. Although there
is still no resolution as to what the final outcome will be for the
ING REIM business, the Board believes it is in the best interests
of IRET's shareholders to progress plans to internalise the
management of the business and remove potential uncertainties over
any future corporate activity surrounding the Manager. Furthermore,
the internalisation is expected to deliver a number of other
potential benefits to the Company, including:
-- An aligned management team structure focussed solely on the
assets of the Company
-- A significant cost saving over the short to medium term,
anticipated to be in the region of GBP 400,000 per annum which will
further enhance the Company's dividend cover.
-- Attracting a wider group of investors than it does currently
as many major institutional investors will only invest in
internally managed funds/companies
-- To achieve one of the most efficient cost bases in the
Guernsey registered real estate investment company sector.
Commenting, Nick Thompson, Chairman of the Company, said:
"The new arrangements set out in today's announcement are
structured to provide stability for the Company and ensure that it
is best placed to continue to build shareholder value over
time.
"Since ING announced its strategic review in 2010, we have
considered a number of options and the conclusion we have reached
is that the most appropriate course of action is to focus on the
management of our existing portfolio by internalising the
investment management team whilst continuing to manage our balance
sheet and our cash resources to deliver the best value for
Shareholders.
"We have been happy with the performance of ING REIM and the
management team led by Michael Morris, and are pleased that Michael
has agreed to project manage the internalisation process and
subsequently become Chief Executive of the management business.
This will ensure the Company continues to benefit from his in depth
knowledge of the assets and his experience of managing the
Company's financing structure. "Given current market conditions, we
remain confident that the portfolio will continue to deliver a high
quality income return and believe that the internalised management
structure will ensure that opportunities continue to be seized to
extract value through asset management, supporting capital growth
over the medium to long term.
"We will provide further updates to shareholders as appropriate
as the internalisation process progresses."
-ENDS-
For further information:
ING UK Real Estate Income Trust Limited c/o Financial
Dynamics
Nicholas Thompson Tel: 020 7831 3113
Northern Trust International Fund Administration
Services (Guernsey) Limited Tel: 01481 745529
David Sauvarin
Financial Dynamics Tel: 020 7831 3113
Dido Laurimore,
dido.laurimore@fd.com
Laurence Jones,
laurence.jones@fd.com
JPMorgan Cazenove Tel : 020 7588 2828
William Simmonds,
Edward Gibson-Watt,
This information is provided by RNS
The company news service from the London Stock Exchange
END
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