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Home REIT sells 40 properties at a loss in bid to stabilise finances
Home REIT, the beleaguered investment trust that specialises in accommodation for homeless people, has agreed the sale of 40 properties to cut its debt and provide working capital.
The listed firm said on Friday that it had exchanged contracts on the homes for a total of £4.8m after a public auction.
But the properties, which represent 1.6% of the firm’s portfolio, were sold at an average loss of 61%.
Home REIT said the prices reflected the “vacant status of the majority of the properties and their condition”.
According to a filing, the properties had “limited prospects for income and capital return given the required capital expenditure in order to be brought up to specification”.
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Last week, Home REIT announced that two of its clients had entered voluntary liquidation.
The fund has now seen four charity clients go bust in the space of six months after it made a similar announcement to the stock market in March.
Home REIT has been mired in difficulties since November last year after short-seller Viceroy Research published a report raising doubts about the firm’s business model.
Trading in Home REIT’s shares were suspended in January 2023 after it missed a deadline to publish its annual report.
In May, the firm appointed fund manager AEW as it new property adviser to replace Alvarium.
Later that month, Home REIT published details of an internal investigation carried out by Alvarium into claims made by Viceroy Research.
Today, Home REIT said that it and AEW will “undertake a programme of re-tenanting and rationalisation with a view to stabilising the company’s financial condition and maximising value for shareholders” following a general meeting being held on 21 August.
The fund leases more than 10,000 beds across 135 local authorities for charities to provide accommodation to homeless people.
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