DELEGATION AGREEMENT



     AGREEMENT, dated as of November      , 2002 by and between INVESTORS BANK

& TRUST COMPANY, a Massachusetts trust company (the "Delegate"), and AEW Real

Estate Income Fund, a Massachusetts business trust (the "Fund").



     WHEREAS, pursuant to the provisions of Rule 17f-5 under the Investment

Company Act of 1940, as amended (the "1940 Act"), and subject to the terms and

conditions set forth herein, the Board of Trustees of the Fund desires to

delegate to the Delegate certain responsibilities concerning Foreign Assets (as

defined below), and the Delegate hereby agrees to retain such delegation, as

described herein; and



     WHEREAS, pursuant to the provisions of Rule 17f-7 under the 1940 Act, and

subject to the terms and conditions set forth herein, the Board of Trustees of

the Fund desires to retain the Delegate to provide certain services concerning

Foreign Assets, and the Delegate hereby agrees to provide such services, as

described herein;



     NOW THEREFORE, in consideration of the premises and of the mutual

agreements contained herein, the parties hereto agree as follows:



1.   Definitions



     Capitalized terms in this Agreement have the following meanings:



     a.   Authorized Representative



          Authorized Representative means any one of the persons who are

empowered, on behalf of the parties to this Agreement, to receive notices from

the other party and to send notices to the other party.



     b.   Board



          Board means the Board of Trustees of Fund.



     c.   Country Risk



          Country Risk means all factors reasonably related to the systemic risk

of holding Foreign Assets in a particular country including, but not limited to,

such country's financial infrastructure (including any Securities Depositories

operating in such country); prevailing custody and settlement practices; and

laws applicable to the safekeeping and recovery of Foreign Assets held in

custody.



     d.   Eligible Foreign Custodian



          Eligible Foreign Custodian has the meaning set forth in Rule

17f-5(a)(1), but also includes, for purposes of this Agreement, foreign branches

of U.S. Banks (as the term "U.S. Bank" is defined in Rule 17f-5(a)(7)).



     e.   Foreign  Assets



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          Foreign Assets has the meaning set forth in Rule 17f-5(a)(2)



     f.   Foreign Custody Manager



          Foreign Custody Manager has the meaning set forth in Rule 17f-5(a)(3).



     g.   Securities Depository



          Securities Depository has the meaning set forth in Rule 17f-4(a).



     h.   Monitor



          Monitor means to re-assess or re-evaluate, at reasonable intervals or

when otherwise reasonably necessary, a decision, determination or analysis

previously made, and shall be construed as such term may be construed pursuant

to relevant positions publicly articulated by the Securities and Exchange

Commission or its staff.



2.   Representations



     a.   Delegate's Representations



          Delegate represents that it is a trust company chartered under the

laws of the Commonwealth of Massachusetts and is a U.S. Bank as defined in Rule

17f-5(a)(7). Delegate further represents that the persons executing this

Agreement and any amendment or appendix hereto on its behalf are duly authorized

to so bind the Delegate with respect to the subject matter of this Agreement.



     b.   Fund's Representations



          Fund represents that the Board has determined that it is reasonable to

rely on Delegate to perform the responsibilities described in this Agreement.

Fund further represents that the persons executing this Agreement and any

amendment or appendix hereto on its behalf are duly authorized to so bind the

Fund with respect to the subject matter of this Agreement.



3.   Jurisdictions and Depositories Covered



     a.   Initial Jurisdictions and Depositories



          The authority delegated by this Agreement in connection with Rule

17f-5 applies only with respect to Foreign Assets held in the jurisdictions

listed in Appendix A1. Delegate's responsibilities under this Agreement in

connection with Rule 17f-7 apply only with respect to the Securities

Depositories listed in Appendix A2. Upon the creation of a new Securities

Depository in any of the jurisdictions listed in Appendix A1 at the time of such

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