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Proceeds from wind-down tops £216m as Home REIT sells off 200 more homes
Home REIT, the beleaguered investment trust, has agreed the sale of 200 more properties to pay off debt as it continues wind down.
The listed firm, which specialises in accommodation for homeless people, said it exchanged on the properties at public auctions last week, for proceeds totalling £36.9m.
Since August last year, the London-based company has sold 1,208 properties and exchanged on 293, as part of an effort to clear its debts. So far it has raised £216.9m from offloading homes.
Home REIT is in the process of winding down after it announced the move in July on the basis it would be in the “best interests” of shareholders.
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In a filing this week, the company said it was “encouraged” that the prices agreed for properties have been in line with draft valuations from JLL.
In London, it said sale prices have “exceeded draft valuations”. A month before it revealed plans to wind down, Home REIT announced it had been unable to secure refinancing of its existing debts on terms that it could recommend to shareholders.
Earlier this month, the trust announced it had reached an agreement with Mansit Housing CIC to surrender leases on 68 properties.
It came a week after One (Housing & Support) CIC, a lessee of 110 of Home REIT’s properties, agreed to enter into administration after being deemed “non-performing”.
Home REIT is also facing the threat of legal action from some of its shareholders and a probe by the Financial Conduct Authority.
Trading in the firm’s shares was suspended in January 2023 after it missed a deadline to publish its annual report.
Home REIT has previously struggled to collect rent from its lessees. Two of its clients entered voluntary liquidation last year.
In December, the firm revealed that its properties were worth almost 60% less than the £977m it paid for them.
Property consultancy JLL inspected 97% of Home REIT’s 2,473 properties and estimated they had a combined value of just £412.9m.
The inspections, which began in July, also revealed that 88% of homes were either empty or occupied by such an unreliable tenant that they were valued on a “vacant possession basis”.
Home REIT acknowledged “there has been a very material reduction” in the value of the company’s portfolio.
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