Home REIT: Embattled social housing investor looks to offload properties and ‘stabilise’ portfolio
Scandal stricken social housing investor Home REIT said it is looking to offload some properties today as it scrambles to raise cash and “stabilise” its portfolio ahead of the appointment of a new investment adviser.
In a statement this morning, bosses said the former FTSE 250 firm “continues to explore all available options” as it waits to call in a new fund manager to replace Alvarium in the coming weeks, which has been at the heart of the breakdown in its business model.
“[The Board] is giving particular consideration to the potential sale in the near-term of a limited number of properties, as the Company works to stabilise its property portfolio,” Home REIT said.
A report by social housing firm Simpact recently found that Home REIT’s tenants had paid just 23 per cent of total rent while its housing would require some £15-20m to refurbish.
A number of its tenants have since collapsed into bankruptcy including its biggest single tenant Lotus Housing, which made up over 12 per cent of its rent roll.
“The Investment Adviser and Simpact continue to engage with the Company’s tenants to restore rent payments and maintain service provision for the occupants of the Company’s properties, particularly occupants of properties where the tenants have entered into creditors’ voluntary liquidations,” Home REIT said.
The stabilisation efforts from Home REIT come after a bidding process to replace Alvarium – dubbed ‘Project Harbour’ internally – closed on Friday, City PM understands
Fund manager Atrato is understood to be the frontrunner, while Edinburgh-based firm RM Funds is also looking to gather support from shareholders for its proposals.
RM Funds has tabled a sweeping clear out of its charity tenant base to be replaced by housing associations, City PM revealed last month.
Home REIT revealed today it had also struck an agreement with its lender to repay £30m of a £250m debt. Bosses said the lender in question, who it did not name, had also “provided the Group with access to additional funds for general working capital purposes”.
The firm has also revealed it had been given an initial copy of the report by Alvarez and Marsal, which has been called into investigate widespread wrongdoing and allegations of bribery as part of its property deals.
City PM revealed in January that the National Crime Agency was also scrutinising its deals.