Home REIT rent troubles deepen as two major tenants go bankrupt
Beleaguered social housing investor Home REIT revealed that two of its tenants had gone into administration this morning, effectively shutting off another 18 per cent of its annual rent roll.
In an update on the London Stock Exchange, Home REIT said that Lotus Sanctuary – its biggest single tenant – and Gen Liv had both entered into a creditors’ voluntary liquidation in the past week.
Lotus made up 12.5 per cent of the company’s annual rent roll, while Gen Liv 5.7 per cent of the firm’s annual rental income.
The insolvencies strike another blow to the firm as it scrambles to steady the ship following revelations that a number of its top tenants have already withheld rent from the firm in protest at the shoddy state of housing it provided.
The former FTSE 250 investment trust revealed that it had collected just 23 per cent of its rent roll in an update last month, while its portfolio would require between £15-£20m to refurbish.
Home REIT said in a statement this morning: “The company is in discussions with prospective tenants to take on new leases of Gen Liv UK CIC’s and Lotus Sanctuary CIC’s portfolios and it should be noted that whilst discussions with prospective tenants are ongoing, arrangements have been made for existing care and support services to continue, to ensure that there is no impact on underlying residents.
“No resident will lose their accommodation as a result of the above creditors’ voluntary liquidations.”
City PM revealed last month that Lotus was looking to offload its leases to other housing providers amidst cash flow troubles, as it struggled to secure exempt housing status from local authorities.
The company has been in freefall since a damaging short seller report from Viceroy Research in November sounded the alarm on its business model and the stability of its rental income.
A number of tenants, including Big Help and its sister charities, which make up some 20 per cent of Home REIT’s annual income, have withheld rent from the firm in protest at the state of housing given.