UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21206
AEW Real Estate Income Fund
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(Exact name of registrant as specified in charter)
399 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
Coleen Downs Dinneen, Esq.
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IXIS Asset Management Distributors, L.P.
399 Boylston Street
Boston, Massachusetts 02116
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 449-2810
Date of fiscal year end: January 31, 2004
Date of reporting period: October 31, 2004
ITEM I SCHEDULE OF INVESTMENTS
INVESTMENTS AS OF OCTOBER 31, 2004 -- (UNAUDITED)
Shares Description Value (a)
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Common Stocks -- 95.9% of Total Net Assets
REAL ESTATE -- 1.4%
Apartments -- 1.4%
41,500 Municipal Mortgage & Equity LLC 1,060,325
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REAL ESTATE INVESTMENT TRUSTS -- 94.5%
REITs - Apartments -- 12.4%
44,000 Archstone Smith Trust 1,476,200
65,000 Camden Property Trust 2,951,000
78,500 Gables Residential Trust 2,865,250
40,000 Mid-America Apartment Communities, Inc. 1,573,200
27,000 Summit Properties, Inc. 818,910
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9,684,560
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REITS - DIVERSIFIED -- 6.4%
83,500 iStar Financial, Inc. 3,458,570
70,000 Lexington Corporate Properties Trust 1,570,800
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5,029,370
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REITS - FACTORY OUTLETS -- 1.2%
20,000 Tanger Factory Outlet Centers, Inc. 945,000
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REITS - HEALTHCARE -- 15.2%
65,000 Health Care Property Investors, Inc. 1,808,950
121,000 Healthcare Realty Trust, Inc. 4,882,350
15,000 Omega Healthcare Investors, Inc. 169,050
100,000 Provident Senior Living Trust, 144A (b) 1,500,000
190,500 Senior Housing Properties Trust 3,573,780
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11,934,130
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REITS - INDUSTRIAL -- 6.3%
25,000 EastGroup Properties, Inc. 885,750
62,400 First Potomac Realty Trust 1,261,728
68,100 Liberty Property Trust 2,761,455
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4,908,933
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REITS - LODGING/RESORTS -- 4.1%
55,000 Eagle Hospitality Properties Trust, Inc. 522,500
63,000 Hospitality Properties Trust 2,699,550
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3,222,050
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REITS - OFFICE -- 27.3%
77,000 Arden Realty, Inc. 2,624,160
65,000 CarrAmerica Realty Corp. 2,094,950
77,000 Glenborough Realty Trust, Inc. 1,617,000
90,000 Highwoods Properties, Inc. 2,232,900
311,300 HRPT Properties Trust 3,483,447
70,000 Kilroy Realty Corp. 2,782,500
68,000 Mack-Cali Realty Corp. 3,003,560
30,000 Maguire Properties, Inc. 784,500
76,500 Prentiss Properties Trust 2,752,470
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21,375,487
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REITS - REGIONAL MALLS -- 6.7%
150,000 Borealis Retail REIT 1,587,300
62,000 Glimcher Realty Trust 1,600,840
35,000 Macerich Co. (The) 2,091,250
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5,279,390
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REITS - SHOPPING CENTERS -- 12.9%
125,000 Cedar Shopping Centers, Inc. 1,691,250
100,000 Commercial Net Lease Realty, Inc. 1,923,000
30,000 Equity One, Inc. 629,700
94,000 Heritage Property Investment Trust 2,875,460
39,000 Inland Real Estate Corp. 586,560
30,000 New Plan Excel Realty Trust 784,800
39,000 Ramco-Gershenson Properties Trust 1,053,000
11,200 Realty Income Corp. 537,488
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10,081,258
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REITS - SPECIALTY -- 2.0%
24,500 Correctional Properties Trust 661,010
22,000 Entertainment Properties Trust 877,800
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1,538,810
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Total Real Estate Investment Trusts - Common Stocks 73,998,988
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Total Common Stocks (Identified Cost $53,146,426) 75,059,313
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Preferred Stocks -- 39.2%
REAL ESTATE INVESTMENT TRUSTS -- 39.2%
REITs - Apartments -- 4.1%
50,000 Apartment Investment & Management Co., Series G 1,342,500
29,400 Apartment Investment & Management Co., Series R 792,330
42,000 Apartment Investment & Management Co., Series U 1,035,720
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3,170,550
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REITS - DIVERSIFIED -- 3.6%
50,000 Colonial Properties Trust, Series D 1,292,500
54,800 Crescent Real Estate Equities Co., Series B 1,487,820
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2,780,320
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REITS - FACTORY OUTLETS -- 2.1%
35,500 Mills Corp. (The), Series B 977,315
25,000 Mills Corp. (The), Series E 677,250
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1,654,565
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REITS - HEALTHCARE -- 3.8%
50,000 Health Care Property Investors, Inc., Class F 1,274,500
65,400 Omega Healthcare Investors, Inc., Series D 1,700,400
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2,974,900
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REITS - LODGING/RESORTS -- 6.6%
75,000 Boykin Lodging Co., Series A 2,160,000
25,000 FelCor Lodging Trust, Inc., Series B 639,500
71,900 Hospitality Properties Trust, Series B 1,970,060
15,000 LaSalle Hotel Properties, Series A 418,650
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5,188,210
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REITS - OFFICE -- 8.4%
30,000 Bedford Property Investors, Inc., Series A, 144A 1,511,250
100,000 CarrAmerica Realty Corp., Series E 2,606,000
90,400 HRPT Properties Trust, Series B 2,481,480
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6,598,730
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REITS - REGIONAL MALLS -- 2.5%
75,000 Glimcher Realty Trust, Series F 1,982,250
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REITS - SHOPPING CENTERS -- 8.1%
27,000 Cedar Shopping Centers, Inc., Series A (b) 712,800
42,200 Developers Diversified Realty Corp., Series F 1,135,180
21,300 Developers Diversified Realty Corp., Series G 560,190
13,000 Federal Realty Investment Trust, Series B 348,010
12,500 Ramco-Gershenson Properties Trust, Series B 344,375
9,000 Realty Income Corp., Series D 240,480
27,000 Urstadt Biddle Properties, Inc., Series C 2,963,250
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6,304,285
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Total Real Estate Investment Trusts - Preferred Stocks 30,653,810
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Total Preferred Stocks (Identified Cost $28,985,994) 30,653,810
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Principal
Amount
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Short Term Investment -- 0.1%
$ 68,040 Repurchase Agreement with Investors Bank & Trust Co. dated 10/29/2004
at 1.27% to be repuchase$ at 68,0407 on 11/01/2004, collateralized
by $70,007 Federal National Mortgage Association Bond, 4.446% due 1/01/2033
valued at $71,442 68,040
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Total Short Term Investment (Identified Cost $68,040) 68,040
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Total Investments -- 135.2% (Identified Cost $82,200,460) (c) 105,781,163
Auction Market Preferred Shares plus cumulative
unpaid dividends (35.8%) (28,005,754)
Other assets less liabilities -- 0.6% 475,280
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Total Net Assets -- 100% $ 78,250,689
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(a) Security Valuation. Equity securities for which market quotations are
readily availaard ofeTrustees.tFairket price on the basis of valuations
furnished to the Fund by a pricing service, which has been authorized by
the Trustees. The pricing service provides the last reported sale price for
securities listed on an applicable securities exchange or on the NASDAQ
national market system, or, if no sale was reported and in the case of
over-the-counter securities not so listed, the last reported bid price.
Securities traded on the NASDAQ National Market are valued at the NASDAQ
Official Closing Price ("NOCP"), or if lacking an NOCP, at the most recent
bid quotation on the NASDAQ National Market. Short-term obligations with a
remaining maturity of less than sixty days are stated at amortized cost,
which approximates market value. All other securities and assets are valued
at their fair value as determined in good faith by the Fund's investment
adviser pursuant to procedures approved by the Board of Trustees.
The Fund may hold securities traded in foreign markets. Foreign securities
are valued at the market price in the foreign market. However, if events
occuring after the close of the foreign market (but before the close of
regular trading on the New York Stock Exchange) are believed to materially
affect the value of those securities, such securities are fair valued
pursuant to procedures approved by the Fund's Board of Trustees.
(b) Non-income producing security.
(c) Federal Tax Information:
At October 31, 2004, the net unrealized appreciation on investments based on cost of
$83,008,803 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess
of value over tax cost $ 22,800,878
Aggregate gross unrealized depreciation for all investments in which there is an excess
of tax cost over value (28,518)
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Net unrealized appreciation $ 22,772,360
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REITs Real Estate Investment Trusts
144A Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registrations, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $3,011,250 or 3.8% of net
assets.
ITEM 2. CONTROLS AND PROCEDURES.
The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-Q
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report. There were no significant
changes or corrective actions with regard to significant deficiencies or
material weaknesses in the Trust's internal controls or in other factors that
could significantly affect the Trust's internal controls subsequent to the date
of their evaluation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AEW Real Estate Income Fund
By: /S/ JOHN T. HAILER
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Name: John T. Hailer
Title: President and Chief Executive Officer
Date: December 20, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
AEW Real Estate Income Fund
By: /S/ JOHN T. HAILER
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Name: John T. Hailer
Title: President and Chief Executive Officer
Date: December 20, 2004
By: /S/ MICHAEL KARDOK
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Name: Michael Kardok
Title: Treasurer
Date: December 21, 2004
ITEM 3. EXHIBITS
(a)(1) Certification for the principal executive officer as required by Rule
30a-2(a) of the Investment Company Act of 1940, as amended (the "Act") filed
herewith.
(a)(2) Certification for the principal financial officer as required by Rule
30a-2(a) of the Investment Company Act of 1940, as amended (the "Act") filed
herewith.
Exhibit (a)(1)
AEW REAL ESTATE INCOME FUND
EXHIBIT TO SEC FORM N-Q
SECTION 302 CERTIFICATIONS
I, John T. Hailer, certify that:
1. I have reviewed this report on Form N-Q of AEW Real Estate Income Fund;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report; and
3. Based on my knowledge, the schedules of investments included in this report
fairly present in all materials respects the investments of the registrant
as of the end of the fiscal quarter for which the report is filed;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-2(c) under the Investment Company Act of 1940) for the
registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b. [Reserved]
c. Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing of this report, based on such
evaluation; and
d. Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):
a. All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: December 21, 2004 /S/ JOHN T. HAILER
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John T. Hailer
President & Chief Executive Officer
Exhibit (a)(2)
AEW REAL ESTATE INCOME FUND
EXHIBIT TO SEC FORM N-Q
SECTION 302 CERTIFICATIONS
I, Michael Kardok, certify that:
1. I have reviewed this report on Form N-Q of AEW Real Estate Income Fund;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report; and
3. Based on my knowledge, the schedules of investments included in this report
fairly present in all materials respects the investments of the registrant
as of the end of the fiscal quarter for which the report is filed;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-2(c) under the Investment Company Act of 1940) for the
registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b. [Reserved]
c. Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing of this report, based on such
evaluation; and
c. Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):
a. All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: December 21, 2004
/S/ MICHAEL KARDOK
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Michael Kardok
Treasurer
AEW Real Estate Income Fund