(IRET.L) ING UK Real Estate Income Trust Buy/Sell

The beginning of 2009 saw a general worsening of the UK's economic position with the country officially entering recession in January. The effect of this has been seen through rising unemployment, the recording of some of the largest annual corporate losses in UK history and further capital injections having been made into the UK banking system. Set against this, we have seen a dramatic reduction in the base rate, now at the lowest level in the Bank of England's 315 year history, and a quantitative easing programme put in place in order to stimulate the financial markets into operating more effectively.

As a result of such extreme capital market conditions, and in order to protect shareholder interests through this volatile period, the key focus at the Company level has been to manage the debt position effectively and at the portfolio level, to ensure that revenues are rigorously maintained and enhanced wherever possible through effective asset and property management.

In May the Company achieved a relaxation of its loan to value covenants without any upfront arrangement fee or change to the overall margin on the loan. In parallel with this the Company has repaid £35 million of debt, which will reduce annual interest charges by £1.7 million. This repayment was made in full ahead of the agreed timetable. This was a complicated and difficult transaction to achieve, but the result obtained on behalf of shareholders will position the Company well for the future. This was one of only a few UK securitised loans to be restructured since their inception in the UK.

Your Company has continued its strategy to de-risk the capital structure through a continuation of the sales programme, which was first initiated in 2007. This has been achieved in a particularly illiquid market and at a time when compliance with banking covenants was critical. Particularly pleasing, albeit following the quarter end, is the disposal of the largest void within the portfolio in one of the most significant occupier led transactions in the M25 market in 2009. This significantly reduces the Company's void exposure. Whilst the Company's sales programme is now substantially complete, it will selectively take advantage of opportunities to dispose of assets where the capital raised can be employed more effectively on behalf of the shareholders.

The decision to withhold the May dividend payment was taken very seriously. It reflected the extreme economic conditions prevailing at the time. I am pleased to confirm the August dividend will be paid in the usual manner consistent with the basis announced by the Board at the end of 2008 on a fully covered basis.

Mindful of the conditions in which we are operating I am pleased to confirm that we have concluded negotiations with the Investment Manager in respect of their fees. We have aligned their remuneration to a Net Asset Value basis, with a performance element linked to the underlying property performance. A separate announcement will be made detailing the revised terms shortly. The Investment Manager has also provided a contribution of £250,000 towards the cost of amendments to the loan covenants. In addition, the Board undertook a review of the Company's auditor over the period and following a panel selection process was pleased to be able to appoint KPMG as the Company's auditor.

Looking to the future, we are now starting to see significantly reduced capital movements in the IPD Index and in certain subsectors of the market we are beginning to see increasing signs of price stability. However, until there is comfort that the UK economic position has stabilised there continue to be short term threats to income, although we expect opportunities to arise as the market starts to recover. The Company continues to benefit from a diversified asset and tenant base, an attractive low cost debt position and a fully covered dividend. We believe the Company is well positioned now to weather ongoing difficult conditions and believe it is poised to take advantage of opportunities that will continue to arise out of the current economic environment.

Nicholas Thompson

24 August 2009
Responsibility Statement

We confirm to the best of our knowledge:

(a) the condensed set of Financial Statements have been prepared in accordance with IAS 34 *Interim Financial Reporting*;

(b) the interim Investment Manager*s Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c) the interim Investment Manager*s Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related parties* transactions and changes therein).

By order of the Board

Nicholas Thompson

Investment Manager's Report

ECONOMIC OVERVIEW

Over the six month period to 30 June 2009, GDP in the UK declined by an unexpectedly sharp 3.2%, which was considerably larger than the 2.5% decline seen in the preceding six months. Having experienced two consecutive quarters of negative economic growth, the economy officially moved into recession in January 2009, the first time since 1991. The economic slowdown has led to a rise in unemployment over the six months, with the claimant count measure increasing from 1.25 million in January 2009 to 1.56 million in June 2009.

Inflation, as measured by CPI, continued to drift downwards over the six months, moving from 3.0% per annum at the start of the year to 1.8% per annum in June 2009. The latter figure is just below the Bank of England's target of 2% per annum but nevertheless well below 2008's peak of 5.2% per annum. RPI inflation turned negative over the six month period, and at June 2009 stood at -1.6% per annum, largely as a result of reduced mortgage interest payments.

Set against this backdrop, the Bank of England lowered the base rate from 2% to 0.5% over the period and introduced a quantitative easing programme of buying government and corporate bonds in an effort to thaw the credit markets. The spread between the base rate and LIBOR, a measure of confidence in the banking system, continued to narrow, suggesting that the Bank's measures are having some positive effect.

The FTSE 100 fell by 1.6% between January 2009 and June 2009, with a 10.3% decline over the first quarter, and a 9.7% increase over the second quarter reflecting stronger investor sentiment.

PROPERTY MARKET REVIEW

The pace at which capital values are being written down has continued to slow progressively during the second quarter of the year, reaching only -0.9% over the month to June 2009, notably less than the figure of -1.6% in May 2009, according to IPD's Monthly Index. The capital fall in June 2009 was the smallest monthly fall since August 2008, as more positive signs for the market begin to emerge. Rental decline has now also taken over from yield impact as the principal driver of capital value falls; rental value declines have accelerated this year, while the monthly yield impact in June 2009 was the least negative since the formative stages of the downturn in August 2007. The All Property initial yield stood at 7.92% in June 2009: just 26 basis points higher than at the end of the first quarter, although this represents a nearly 90 basis point movement since the turn of the year.

There are now definite signs that the capital value fall due to outward yield movement is close to having run its course. Nevertheless, rental values still have some way to fall as the occupational market lags the economy. Unemployment is still rising, corporate profits are falling and correspondingly vacancy rates across commercial property continue to rise. The impact on retail property voids, through lower levels of consumer spending and a wave of retailer administrations, has been almost immediate, but office and industrial properties are also set to see voids steadily rise, putting downward pressure on rental values.

By virtue of the contracted lease term the full effect of rental declines will not be seen in cashflows but nevertheless will dampen any rebound in capital values in the short term.

Figure 1: All Property Total Returns

Date Monthly Total Return Date Monthly Total Return
% %
Jun-06 2.1 Jan-08 -1.6
Jul-06 1.3 Feb-08 -1.0
Aug-06 1.1 Mar-08 -0.8
Sep-06 1.3 Apr-08 -0.5
Oct-06 1.0 May-08 -0.7
Nov-06 1.2 Jun-08 -1.5
Dec-06 1.5 Jul-08 -1.3
Jan-07 0.7 Aug-08 -1.1
Feb-07 0.7 Sep-08 -2.4
Mar-07 0.9 Oct-08 -3.8
Apr-07 0.7 Nov-08 -5.1
May-07 0.7 Dec-08 -5.3
Jun-07 0.7 Jan-09 -2.4
Jul-07 0.2 Feb-09 -2.5
Aug-07 0.0 Mar-09 -2.4
Sep-07 -1.2 Apr-09 -1.6
Oct-07 -1.5 May-09 -0.9
Nov-07 -3.6 Jun-09 -0.2
Dec-07 -3.7

Source: IPD Monthly Digest

STRATEGY

The operational strategy is set in order to implement the Group's objective and for the first half of 2009 was highly focused on the need to manage the debt position in light of a rapidly deteriorating market and the need to remain compliant with covenants.

Being now in a position where the Group has headroom against further declines in the market, along with some tentative signs of price stability, the emphasis is towards positioning the Group through a period of weaker occupational demand.

With such extreme shocks to the capital markets over the period, we had reduced our refurbishment programme, seeking to retain cash for covenant purposes. We are now in a position, having provided operational flexibility, where we can seek to enhance a number of assets which will in turn lead to improved income prospects in due course.

PORTFOLIO PERFORMANCE

At an underlying property level, the portfolio continued to perform ahead of the UK market as measured by IPD, both on an income and a total return basis.

In the six months to 30 June 2009, the underlying portfolio delivered a total return of -8.4% against the IPD quarterly benchmark of -9.3%. The Group's income return was 3.9% against a benchmark of 3.5%.

REVIEW OF HALF YEAR TO JUNE 2009

The primary focus for the period related to the need to remain compliant with loan covenants against a backdrop of rapidly deteriorating property values. The disposals programme continued whilst at the same time proposals to restructure the underlying loan were approved by Rating Agents and then presented to Noteholders. A successful outcome, increasing the loan to value covenants, was achieved in May 2009 and is detailed further below.

Maintaining income remained a priority along with managing the existing assets with a view to maintaining, or where possible enhancing, cashflow. In particular, and faced with a number of tenants in administration, efforts were on mitigating the effects of negative cashflow through such events.

Generally, rent collection remains strong, and as at the June Quarter, over 99% of rent due had been received, ignoring those tenants in administration or on payment plans. As at 30 June 2009 tenants in administration or liquidation represented less than 3% of the total rent roll.

With the general economic outlook, occupier activity was subdued, but one of the most significant successes was securing an occupier led disposal of our largest void in the portfolio, which exchanged just after the end of the period.

ACQUISITIONS & DISPOSALS

In the six months to 30 June 2009, the Group made no acquisitions and disposed of six properties for a consideration of over £28 million. Further disposals of £26.8 million have either exchanged or completed following the period end.

These disposals were made in line with the strategy to reduce the Group's debt and to ensure compliance with debt covenants.

In particular the proceeds were utilised in the prepayment of £35 million of debt which completed in July 2009.

OCCUPANCY

As at 30 June 2009, the occupancy rate within the portfolio stood at 91%, which was in line with the IPD Quarterly Benchmark of 91%. The sale of the largest void in the portfolio referred to in the Chairman's Statement will improve this to 93% in August 2009 when completion occurs.

Over the period, three tenants entered administration or liquidation and we expect partial recovery in two instances. It is likely that the remaining space will be returned and re-let as soon as practically possible.

This increase in unexpected voids and weaker tenant demand is depressing rental levels in the short term and we are taking a pragmatic approach to re-letting accommodation with the emphasis on cashflow.

DEBT

During the period the Group had a total of £225 million of AAA rated loan notes in the debt market, with interest payable on the initial £200 million at 4.79% and the further £25 million at 5.38%, both fixed by way of interest rate swaps. These loan notes are repayable on 31 January 2013.

In May 2009 and after consultations with the Noteholders the following amendments were achieved in respect of the notes:

Following the quarter end, and as part of the loan restructuring above, the Group pre-paid £35 million of debt. As at the date of this Report the Group had £190 million of debt outstanding at a weighted average cost of 4.87% per annum, excluding loan arrangement costs.

OUTLOOK

At the period end the portfolio provided a net initial yield of over 8.5% and weighted average unexpired lease length of over 8.5 years. The portfolio remains well diversified, to reduce geographic, asset and tenant risk.

Having restructured the debt within the structure, without any increased margin, there is stability provided without the need for any immediate refinancing, enabling us to focus on active management and the opportunities created by the current market dynamics.

Having seen substantial declines in asset values over the past two years, the sector, as measured by IPD, now offers an attractive income return of just under 8% per annum.

With the recently published IPD Monthly results for July showing the first positive total return since July 2007, the market appears to be stabilising. It is apparent from transactional activity that in certain subsectors we are starting to see increased competition for assets and in some instances signs of rising pricing.

Despite this, rental value growth has been negative since May 2008 and whilst there is an improvement in investor sentiment, declining rental value growth and risks to cashflow are continuing to adversely affect capital values. The more stable capital environment is enabling a yield correction which in order to be sustainable will require an improvement in the occupier market which, in turn, will be dependent upon economic recovery.

Within the UK commercial property market, there remain significant debt related issues either in relation to covenants or refinancing and as such we remain cautious about the strength of any immediate recovery. Paradoxically, these issues are likely to provide the opportunities of the future.

Michael Morris

ING Real Estate Investment Management (UK) Limited

24 August 2009
Portfolio Analysis

Geographical

As at 30 June 2009 the regional weightings of the Property Portfolio, as a percentage of current portfolio value, are summarised as follows:

£000 % of Portfolio
Central London 26,105 7.3
South East and Greater London 96,940 27.2
East 41,835 11.7
South West 19,545 5.5
Midlands 74,590 20.9
North 59,725 16.8
Scotland 9,800 2.8
Wales 20,640 5.8
Northern Ireland - -
Isle of Man 7,100 2.0
Total 356,280 100

Sector

As at 30 June 2009 the sector weightings of the Property Portfolio, as a percentage of current portfolio value, are summarised as follows:

£000 % of Portfolio
Offices 156,005 43.8
Industrial 114,700 32.2
Retail 43,145 12.1
Retail Warehouse 24,375 6.8
Leisure/Other 18,055 5.1
Total 356,280 100

Covenant Strength

The covenant strength, based as a percentage of current passing rent by risk rating, as at 30 June 2009 is summarised as follows:

Portfolio %
Negligible and Government risk 50.9
Low risk 29.3
Low-medium risk 2.3
Medium-high risk 2.8
High risk 11.7
Ineligible/not matched 3.0
Total 100

Longevity of Income

As at 30 June 2009, based as a percentage of current net annual rent, the length of the leases to the first termination is summarised as follows:

Years £000 %
Up to 5 13,136 40.5
5 to 10 11,573 35.7
10 to 15 4,145 12.8
15 to 25 2,300 7.1
25 and over 1,249 3.9
Total 32,403 100

Top Ten Tenants

The top ten tenants, based as a percentage of current passing rent, as at 30 June 2009 is summarised as follows:

% of Passing Rent
TNT UK Limited 8.7
Merrill Lynch Europe Plc 3.5
Cadence Design Systems Limited 3.0
Tanfield Group Plc 2.6
Exel UK Limited 2.6
Menzies Hotels Property No.20 Limited 2.4
BT Telecommunications Plc 2.4
Chiltern International Limited 2.3
S P Group Limited 2.1
Scottish Provident International Life Assurance Limited 1.8
31.4

VALUATION SCHEDULE AS AT 30 JUNE 2009

Properties valued in excess of £20 million Sector
Unit 5320, Magna Park, Lutterworth, Leics. Industrial
Units A-G2 River Way Industrial Estate, Harlow, Essex Industrial

Properties valued between £15 million and £20 million
Phase II, Parc Tawe, Link Road, Swansea Retail Warehouse

Properties valued between £10 million and £15 million
Colchester Business Park, The Crescent, Colchester, Essex Office
56, Castle Street, 2/12 English Street and 12-21 St Retail

Cuthberts Lane, Carlisle, Cumbria

Properties valued between £5 million and £10 million
Boundary House, Jewry Street, London EC3 Office
City Link House & Tolley House, Addiscombe Road, Croydon Office
Vigo 250, Birtley Road, Washington, Tyne and Wear Industrial
Angouleme Way Retail Park, Bury, Greater Manchester Retail Warehouse
Unit 3220, Magna Park, Lutterworth, Leics. Industrial
Regency Wharf , Broad Street, Birmingham Leisure
Strathmore Hotel, Arndale Centre, Luton, Beds. Leisure
401 Grafton Gate East, Milton Keynes, Bucks. Office
Angel Gate Office Village, City Road, London EC1 Office
L'Avenir, Opladen Way, Westwick, Bracknell, Berks. Office
1-3 Chancery Lane, London WC2 Office
Lincoln Place (Block 2), Farringdon Road, London EC1 Office
Westlea Campus, Chelmsford Road, Swindon, Wilts. Office
The Business Centre, Molly Millars Lane, Wokingham, Berks. Industrial
Units 1-13 Dencora Way, Sundon Park, Luton, Beds. Industrial
Unit 2, Ravensbank Business Park, Redditch, Worcs. Industrial
Provident House, Ballacottier Business Park, Isle Of Man Office
Scots Corner, High Street/Institute Road, Birmingham Retail
17/19 Fishergate, Preston Retail
171 Bath Road, Slough, Berks. Office
3 The Boulevard, Croxley Green, Watford, Herts. Office
Northampton Business Park, 800 Pavilion Drive, Northampton Office
Queens House, 17/29 St Vincent Place, Glasgow Office
Lawson Mardon Buildings, Kettlestring Lane, York Industrial
Sentinel House, Ancells Business Park, Fleet, Hants. Office
Waterside Park, Longshot Lane, Bracknell, Berks. Office
53/55/57 Broadmead, Bristol Retail
9/12 St James Parade, Bristol Office
Longcross Court, Newport Road, Cardiff Office
Haynes Way, Swift Valley Industrial Estate, Rugby, Industrial

Warwickshire

Properties valued under £5 million
Easter Court, Gemini Park, Warrington Industrial
Trident House, 42/48 Victoria Street, St Albans, Herts. Office
Zenith, Downmill Road, Bracknell, Berks Industrial
Waterside House, Kirkstall Road, Leeds Office
Atlas House, Third Avenue, Globe Park, Marlow, Bucks. Office
72/78 Murraygate, Dundee Retail
Merchants House, Crook Street, Chester Office
6/12 Parliament Row, Hanley, Worcs. Retail
7&9 Warren Street, Stockport Retail
Units 1- 3, 18/28 Victoria Lane, Huddersfield, West Yorks. Retail
Heron Industrial Estate, Spencers Wood, Reading Industrial

Risk Management

There are a number of potential risks and uncertainties which could have a material impact on the Group's long term performance and could cause actual results to differ materially from expected and historic results. The main risks and how they are mitigated are shown below;

Issue Risk Mitigation
Market risk The Group operates The Investment
in the property Manager undertakes
sector which is significant research
known to be to ensure that the
cyclical. strategy of the
Group can be
constantly amended
to take account of
changes in the
prevailing market.
Geographical risk Property market By maintaining a
returns can vary diversified
significantly portfolio the
between geographical Investment Manager
areas. can minimise
exposure to one
particular market.
Investment risk Identifying good The Investment
investments ahead of Manager has a
competitors. dedicated and
experienced team
which assists in
identifying,
negotiating and
completing
acquisitions and
sales according to
strict returns
criteria.
Letting risk The risk of being The Investment
unable to let the Manager maintains
majority of lettable close contact with
space. leasing agents and
utilises its
research team to
ensure exposure to
less favourable
markets is
minimised.
Valuation risk The property By maintaining a
portfolio is diversified
susceptible to portfolio the
fluctuations in Investment Manager
property valuations. may spread the risk
of a large downturn
in a specific class
of asset
Expertise risk The risk of being The Investment
unable to attract Manager has a policy
appropriate of ensuring that
individuals to remuneration is
manage the linked to the
portfolio. market. The
Investment Manager's
agreement is
regularly reviewed
by the Board.
Liquidity risk The risk that Cash flows are
insufficient funds continuously
are available for monitored and
operating costs, detailed forecasts
maintenance of debt prepared to ensure
and asset management sufficient resources
initiatives. exist. Funding
maturities are
spread over a range
of time scales, and
good relationships
are maintained with
lenders. Covenant
requirements are
also continually
monitored and
reported regularly
to the Board.
Interest rate risk The risk of Interest payable on
fluctuation of floating rate loans
interest rates on are fixed by way of
loans. interest rate swaps
to minimise
exposure.
Credit risk The risk of default The Investment
by tenants. Manager has a policy
of only dealing with
creditworthy
counterparties.
Counterparty limits
are regularly
reviewed. Trade
debtors consist of a
large number of
tenants spread
across diverse
industries and
geographical areas.
Cash flow risk The risk of a The Investment
shortfall in funds Manager monitors
to operate the cash flows and
Group. assesses all capital
and operational
expenditure. The
Board are regularly
updated on major
cash flows.
Independent Review Report

INDEPENDENT REVIEW REPORT TO ING UK REAL ESTATE INCOME TRUST LIMITED ("The Company")

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2009 which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Cash Flow Statement and the related explanatory notes. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The Half Yearly Financial Report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Half Yearly Financial Report in accordance with the DTR of the UK FSA.

As disclosed in note 2, the Annual Financial Statements of the Company are prepared in accordance with International Financial Reporting Standards. The condensed set of financial statements included in this Half Yearly Financial Report has been prepared in accordance with IAS 34 'Interim Financial Reporting'.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Yearly Financial Report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with IAS 34 and the DTR of the UK FSA.

KPMG Channel Islands Limited Chartered Accountants 24 August 2009
Financial Statements

Condensed Consolidated Statement of Comprehensive Income For the period from 1 January to 30 June 2009

1 Jan to 30 June 1 Jan to 30 June 1 Jan to 31 December

Unaudited Unaudited Audited
Notes Income Capital Total Total Total
£000 £000 £000 £000 £000

Income
Rental income 3 16,054 - 16,054 17,825 35,812
Service charges recharged to 2,897 - 2,897 1,770 4,284

tenants
Other operating income 5 - 5 2,442 5,522
Total operating income 18,956 - 18,956 22,037 45,618

Gains and losses on investments
Realised (losses)/gains 8 - (4,026) (4,026) 3,243 2,524

arising on disposal of investment properties
Realised gains arising on - 40 40 - -

disposal of finance leases
Unrealised losses on 8 - (48,476) (48,476) (60,221) (140,757)

revaluation of investment properties
Unrealised losses on - (34) (34) (257) (404)

revaluation of assets held under finance leases
Total gains and losses on - (52,496) (52,496) (57,235) (138,637)

investments

Expenses
Property operating expenses (2,073) - (2,073) (1,109) (4,027)
Service charge costs (2,897) - (2,897) (1,770) (4,284)
Management expenses 5 (1,927) - (1,927) (2,880) (5,345)
Other operating expenses 6 (2,015) - (2,015) (1,293) (2,667)
Total operating expenses (8,912) - (8,912) (7,052) (16,323)
Profit/(loss) before finance 10,044 (52,496) (42,452) (42,250) (109,342)

costs and tax

Financing
Interest receivable 126 - 126 1,424 2,663
Interest payable (5,426) - (5,426) (7,335) (14,059)
Unrealised gains/(losses) on - 2,779 2,779 8,393 (19,677)

revaluation of interest rate swaps
Total finance costs (5,300) 2,779 (2,521) 2,482 (31,073)
Profit/(loss) before tax 4,744 (49,717) (44,973) (39,768) (140,415)
Tax - - - - -
Profit/(loss) for the 4,744 (49,717) (44,973) (39,768) (140,415)

year/period

Loss per share
Basic and diluted (13.6)p (12.0)p (42.5)p

There is no comprehensive income other than the loss for the period.

The total column of this statement represents the Group's Condensed Consolidated Statement of Comprehensive Income. The supplementary income return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of the parent Company. There are no minority interests. Notes 1 to 14 form part of these Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Changes in EquityFor the period from 1 January to 30 June 2009
Notes Share Capital Share Premium Distributable Retained Earnings Total
Account Reserve
£000 £000 £000 £000 £000

Balance as at 31 December 2007 - 31,389 297,776 40,352 369,517

Net loss for the period - - - (39,768) (39,768)
Dividends paid 7 - - (1,250) (9,074) (10,324)

Balance as at 30 June 2008 - 31,389 296,526 (8,490) 319,425

Net loss for the period - - - (100,647) (100,647)
Dividends paid 7 - - 357 (8,825) (8,468)

Balance as at 31 December 2008 - 31,389 296,883 (117,962) 210,310

Net loss for the period - - - (44,973) (44,973)
Dividends paid 7 - - - (3,304) (3,304)

Balance as at 30 June 2009 - 31,389 296,883 (166,239) 162,033

Notes 1 to 14 form part of these Condensed Consolidated Financial Statements.

Condensed Consolidated Balance SheetAs at 30 June 2009
30 June 2009 30 June 2008 31 Dec 2008
Unaudited Unaudited Audited
Notes £000 £000 £000

Non-current assets
Investment properties 8 357,349 536,092 436,005
Total non-current assets 357,349 536,092 436,005

Current assets
Accounts receivable 9 5,358 6,699 8,488
Cash and cash equivalents 51,398 63,779 20,084
Total current assets 56,756 70,478 28,572

Total assets 414,105 606,570 464,577

Current liabilities
Accounts payable and accruals (14,094) (17,001) (13,210)
Loans and borrowings 10 (35,000) - -
Total current liabilities (49,094) (17,001) (13,210)

Non-current liabilities
Loans and borrowings 10 (202,978) (270,144) (241,057)
Total non-current liabilities (202,978) (270,144) (241,057)

Total liabilities (252,072) (287,145) (254,267)

Net assets 162,033 319,425 210,310

Equity
Ordinary share capital - - -
Share premium account 31,389 31,389 31,389
Distributable reserve 296,883 296,526 296,883
Retained earnings (166,239) (8,490) (117,962)

Total equity 162,033 319,425 210,310

Net asset value per share 12 0.49 0.97 0.64

These Condensed Consolidated Financial Statements were approved by the Board of Directors on 24 August 2009 and signed on its behalf by:

Robert Sinclair Trevor Ash
Director Director

Notes 1 to 14 form part of these Condensed Consolidated Financial Statements.

Condensed Consolidated Cash Flow StatementFor the period from 1 January to 30 June 2009
1 Jan to 30 June 1 Jan to 30 June 1 Jan to 31 December

Unaudited Unaudited Audited
Notes £000 £000 £000

Loss before tax (44,973) (39,768) (140,415)

Adjusted for
Interest receivable (126) (1,424) (2,663)
Interest payable 5,426 7,335 14,059
Realised and unrealised 49,717 48,842 158,313

(gains) and losses on investments
Amortisation of finance costs 163 260 705
Cash flows from operating 10,207 15,245 29,999

profit before working capital changes
(Increase)/decrease in trade 2,968 (680) (2,470)

and other receivables
Increase/(decrease) in trade 905 (755) (4,990)

and other payables
Net cash flows from operating 14,080 13,810 22,539

activities Cash flows from investing activities
Purchase of investment 8 (476) (1,791) (2,806)

properties
Disposal of investment 8 26,314 41,670 61,370

properties
Interest received 126 1,424 2,663
Net cash flows from investing 25,964 41,303 61,227

activities Cash flows from financing activities
Repayment of long term 10 - (24,825) (81,981)

borrowings
Interest paid on loans (5,426) (7,335) (14,059)
Dividends paid 7 (3,304) (10,324) (18,792)
Net cash flows from financing (8,730) (42,484) (114,832)

activities
Net increase in cash and cash 31,314 12,629 (31,066)

equivalents
Cash and cash equivalents at 20,084 51,150 51,150

beginning of year/period
Cash and cash equivalents at 51,398 63,779 20,084

end of year/period

Notes 1 to 14 form part of these Condensed Consolidated Financial Statements.

Notes to the Condensed Consolidated Financial Statements

For the period from 1 January to 30 June 2009

1. General information

ING UK Real Estate Income Trust Limited was incorporated on 15 September 2005 and is registered as a closed-ended Guernsey investment Company.

These Half Yearly Financial Statements are prepared for the period from 1 January to 30 June 2009, with unaudited comparatives for the period from 1 January to 30 June 2008. Comparatives are also provided from the audit financial statements for the year ended 31 December 2008.

The financial information for the year ended 31 December 2008 is derived from the Financial Statements delivered to the UK Listing Authority and does not constitute statutory accounts.

2. Significant accounting policies

These Half Yearly Financial Statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the Financial Statements of the Company as at and for the year ended 31 December 2008.

Except as described below, the accounting policies applied by the Company in these Half Yearly Financial Statements are the same as those applied by the Company in its Financial Statements as at and for the year ended 31 December 2008.

The Annual Financial Statements of the Company are prepared in accordance with International Financial Reporting Standards ('IFRS').

Presentation of financial statements

The Company applies revised IAS 1: 'Presentation of Financial Statements (2007)', which became effective as of 1 January 2009. As a result, the Company presents in the Condensed Consolidated Statement of Changes in Equity all owner changes in equity, whereas all non-owner changes in equity are presented in the Consolidated Statement of Comprehensive Income. This presentation has been applied in these Half Yearly Financial Statements as of and for the six months period ended on 30 June 2009. Comparative information has been re-presented so that it also is in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings per share.

The following standards, which became effective on 1 January 2009, have had no material impact on the Half Yearly Financial Statements:

IFRS 3 - Business Combinations IFRS 8 - Operating Segments

IAS 23 (Revised) - Borrowing Costs

3. Rental income

Rent receivable is stated exclusive of Value Added Tax and arose wholly from continuing operations in the United Kingdom and the Isle of Man.

4. Business and Geographical segments

The Directors are of the opinion that the Group, through its subsidiary undertakings, operates in one reportable industry segment, namely real estate investment, and across one primary geographical area, namely the United Kingdom and the Isle of Man and therefore no segmental reporting is required. The portfolio consists of 48 commercial properties, which are in the office, retail, retail warehouse, industrial and leisure sectors.

Notes to the Condensed Consolidated Financial Statements

For the period ended 1 January to 30 June 2009 (continued)

5. Management expenses

1 Jan to 30 June 1 Jan to 30 June 2008 Year ended 31 Dec 2008

£000 £000 £000
Investment Manager*s fees 1,927 2,880 5,345

Under the terms of the Investment Management Agreement, ING Real Estate Investment Management (UK) Limited (the "Investment Manager") receives remuneration for property management and administration services. The management fee is payable quarterly in arrears and is equal to the aggregate of the following:

6. Other operating expenses

1 Jan to 30 June 2009 1 Jan to 30 June 2008 Year ended 31 Dec 2008
£000 £000 £000
Valuation expenses 61 93 169
Audit fees 45 59 100
Amortisation of finance costs 163 260 705
Swap break fee and prepayment - - 841

fee
Other expenses 1,746 881 852
2,015 1,293 2,667

Other expenses include costs of £1.4m relating to the amendment to the loan documents and loan prepayment (see note 10).

The Group has no employees other than the Directors.

7. Dividends

1 Jan to 30 June 1 Jan to 30 June Year ended 31 Dec 2008

Declared and paid: £000 £000 £000
Interim dividend for the - 5,162 5,162

period ended 31 December 2007: 1.5625 pence
Interim dividend for the - 5,162 5,162

period ended 31 March 2008: 1.5625 pence
Interim dividend for the - - 5,163

period ended 30 June 2008: 1.5625 pence
Interim dividend for the - - 3,305

period ended 30 September 2008: 1 pence
Interim dividend for the 3,304 - -

period ended 31 December 2008: 1 pence
3,304 10,324 18,792

No dividend was paid in relation to the quarter ended 31 March 2009. The interim dividend of 1 pence per ordinary share in respect of the period ended 30 June 2009 has not been recognised as a liability in accordance with IFRS as it was declared after the period end. A dividend of £3,304,000 will be paid on 28 August 2009.

Notes to the Condensed Consolidated Financial Statements

For the period ended 1 January to 30 June 2009 (continued)

8. Investment properties
1 Jan to 30 June 1 Jan to 30 June 2008 Year ended 31 Dec 2008

£000 £000 £000
Property valuation 356,280 534,190 434,250
Valuations of assets held 1,439 1,902 1,755

under finance leases
Lease incentives held as (370) - -

debtors
357,349 536,092 436,005

£000 £000 £000
Opening valuation 434,250 631,047 631,047
Additions 476 1,791 2,806
Disposals (26,314) (41,670) (61,370)
408,412 591,168 572,483

Gains and losses on investments held at fair value through profit and loss:
(Losses)/gains on disposals (4,026) 3,243 2,524
Unrealised losses on revaluation (48,476) (60,221) (140,757)

Lease incentives held as debtors 370 - -
Closing valuation 356,280 534,190 434,250
Historic cost 521,204 585,302 570,334

The investment properties were valued by King Sturge LLP, Chartered Surveyors, as at 30 June 2009, on the basis of Market Value in accordance with the Royal Institution of Chartered Surveyors Valuation Standards.

The Group's borrowings (note 10) are secured by a first ranking fixed charge over the investment properties held.

Rental income and property operating expenses arise from the properties shown above.

9. Accounts receivable

1 Jan to 30 June 1 Jan to 30 June 2008 Year ended 31 Dec 2008

£000 £000 £000
Tenant debtors 4,047 4,683 7,186
Prepayments 172 270 -
Capitalised finance costs 1,139 1,746 1,302
5,358 6,699 8,488

The loan arrangement costs as at 30 June 2009 are £2,296,000 (30 June 2008: £2,882,000, 31 December 2008: £2,296,000). These are amortised over the lives of the loans. For the period ended 30 June 2009 £163,000 of these costs were written off to the Income Statement (period ended 30 June 2008: £260,000, year ended 31 December 2008: £705,000).

The Directors consider that the carrying amount of accounts receivable approximates their fair value.

Notes to the Condensed Consolidated Financial Statements

For the period ended 1 January to 30 June 2009 (continued)

10. Loans and borrowings

Maturity 30 June 2009 30 June 2008 31 Dec 2008
Current £000 £000 £000
Floating rate notes * due in 31 January 2013 35,000 - -

less than one year
35,000 - -

Non-current
Floating rate notes * due in 31 January 2013 190,000 225,000 225,000

more than one year
Bank loan 4 December 2009 - 57,156 -
190,000 282,156 225,000
Interest rate swaps 11,250 (14,040) 14,029
Obligations under finance 1,728 2,028 2,028

leases
202,978 270,144 241,057

On 20 December 2005 the Group issued £200 million of AAA rated seven year loan notes to the debt market. The interest payable on these notes is fixed at 4.795% by means of an interest rate swap. On 6 July 2006 a further £25 million of loan notes were issued on the same terms, with the interest payable fixed at 5.3804% by means of a further swap. The loan notes are secured over the investment properties held by the GPUT, and are repayable on 31 January 2013. The loan notes were issued by ING (UK) Listed Real Estate Issuer PLC, a Special Purpose Entity that is consolidated under the principles of SIC 12.

On 4 December 2006 the Group entered into a three year term loan with J P Morgan for £93 million which was fully repaid during 2007 and 2008.

The interest rate swaps mature on the same dates as the associated borrowings.

The weighted average interest rate paid on the Group's borrowings for the period was 4.86% (30 June 2008: 5.091%, 31 December 2008: 4.86%).

On 17 April 2009 the Group announced it had breached the loan to value ("LTV") covenant on its securitised loan facility. The covenant states that the LTV of the property portfolio must not exceed 50%. As at 17 April 2009 the loan to value was 53.4%. The loan documents allow for a 30 day remedy period from the date of breach of a covenant.

A meeting of Noteholders was held on 15 May, when the following measures were approved;

The LTV breach was therefore resolved. The Group is in compliance with all loan covenants at the date of reporting. On 31 July 2009 a total of £35 million was prepaid. No further tenders are required under this agreement.

The fair value of the loans may be lower than the book value given that, at the present time, lenders are less willing to provide financing for the type of assets held by the Group at the interest annually paid by the Group. However, the Group does not fair value its debt obligations nor is it practical or possible to measure the fair value of the loan due to the current market conditions.

Notes to the Condensed Consolidated Financial Statements

For the period ended 1 January to 30 June 2009 (continued)

11. Contingencies and capital commitments

The Group has entered into contracts of approximately £100,000 across the portfolio at 30 June 2009 (30 June 2008: £600,000, 31 December 2008: £100,000). There are no other contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancements as at 30 June 2009.

12. Net asset value

The net asset value per ordinary share is based on net assets at the period end and on 330,401,300 (30 June 2008: 330,401,300, 31 December 2008: 330,401,300) ordinary shares, being the number of ordinary shares in issue at the period end.

At 30 June 2009, the Company had a net asset value per ordinary share of £0.49 (30 June 2008: £0.97, 31 December 2008: £0.64).

13. Related party transactions

During the period the Investment Manager was paid a total of £1,927,000 (30 June 2008: £2,880,000, 31 December 2008: £5,345,000) in respect of the property management and administration services. As at 30 June 2009 the Group owed £900,000 to the Investment Manager (30 June 2008:£1,300,000, 31 December 2008:£900,000).

The Group paid £756,000 to ING Bank N.V. during the period in connection with the amendment to the loan documents and loan prepayment (see note 10). The Investment Manager paid a contribution to the Group of £250,000 to be offset against these costs.

The Group has one non-independent Director, who is connected with the Investment Manager. The remuneration in respect of this appointment was waived.

ING UK Real Estate Income Trust Limited has no controlling parties.

14. Events after the balance sheet date

Following the balance sheet date sales where completed on the property in Bristol for £5.6 million, the property in Redditch for £7.3 million and the property in the Isle of Man for £7.1 million. Contracts were exchanged on the sale of the property in Watford for £6.75 million.

On 31 July 2009 a payment of £35 million was made to loan note holders to prepay their loan notes, in accordance with the Noteholder meeting held on 15 May 2009.

A dividend of £3,304,000 (1 pence per share) was approved by the Board on 27 July 2009 and will be paid on 28 August 2009.

For further information;

ING Real Estate Investment Management (UK) Limited

Helen Stott, 020 7767 5648, helen.stott@ingrealestate.co.uk

Financial Dynamics

Dido Laurimore/Laurence Jones, 020 7831 3113

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

This information is provided by RNS The company news service from the London Stock Exchange

IR PUUBGRUPBGAC

Based on the June 2009 Net Asset Value, the revised arrangement will lead to a reduction in the management fee of approximately 30% (or £260,000 over the quarter), prior to the payment of any performance element.

A supplemental agreement to reflect the revised terms will be entered into by the Company and the Investment Manager shortly and the Company will make a further announcement in due course.

Chairman Nicholas Thompson commented:

"The Board is pleased to have reached this arrangement in respect of management fees which provides alignment with shareholders' interests, offering both an NAV base element and a relative market outperformance fee. In an environment when cashflow is very important the proposal has been structured in such a way that the total fee, including any performance related element, is capped to ensure the fees do not undermine the dividend cover of IRET."

For further information:

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court

Les Banques

St Peter Port Guernsey

GY1 3QL

Tel: 01481 745480

Fax: 01481 745085

ING Real Estate Investment Management (UK) Limited

Helen Stott, 020 7767 5648, helen.stott@ingrealestate.co.uk

Financial Dynamics

Dido Laurimore/Laurence Jones, 020 7831 3113

This information is provided by RNS The company news service from the London Stock Exchange

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