The board of social housing investor Home REIT said it was considering all strategic options, including the possible sale of the company, after a review of the company’s portfolio found it had experienced a “serious deterioration in rent collections for the quarter to November 2022”.
The review, undertaken by specialist social housing property manager Simpact Group also identified “serious challenges in rent collection for December 2022 and January 2023”.
In an update, Home REIT said for the quarter ending November 2022 only 23% of rent had been collected, meaning out of a £14,827,147 quarterly rent roll, only £3,401,615 had been paid. The REIT added the rent forecast to be collected for the coming months was “highly uncertain” as its investment adviser Alvarium Home REIT Advisors dealt with a “a combination of issues surrounding the tenants’ ability, or willingness, to pay”. It added that statutory demands had been served on seven of the defaulting tenants.
In light of the review’s findings, the board said it was considering all strategic options including the possible sale of the company with Smith Square Partners and its other advisers, and revealed it had received an “unsolicited approach” from Bluestar Group regarding a possible offer for the entire issued share capital of the company. It said any offer would likely be in cash, but noted there was no certainty an offer would ultimately be made for the company, nor as to the terms on which any firm offer might be made.
Lynne Fennah, chair of the Home REIT board, said: “We recognise the serious issues facing the company and are examining all options to preserve shareholder value, and the interests of all stakeholders.”
The board also said it had instructed independent forensic accounting expert Alvarez & Marsal to investigate “media speculation of allegations of wrongdoing” and added it was engaging with BDO for the purposes of finalising the enhanced audit of its accounts for the year ended 31 August 2022.
Home REIT, which was targeted by short-sellers late last year, temporarily suspended trading of its shares on the London Stock Exchange last month. It was due to publish its annual financial results by 31 December 2022, but said that as its independent auditor BDO was carrying out an “enhanced set of audit procedures” it had not been possible to publish its results by the deadline.
