Home Reit tenants slide into liquidation

Lotus Sanctuary and Gen Liv UK make up 18.2% of the trust’s rent roll


Uncertainty surrounding homeless accommodation provider Home Reit has intensified after two of its tenants, Lotus Sanctuary and Gen Liv UK, entered into voluntary liquidation.

Collectively, the tenants make up 18.2% of the trust’s rent roll.

It was revealed on 25 January that Lotus Sanctuary had failed to pay rent since August, while 77% of Home Reit’s overall rent roll had not been collected for the quarter to 30 November 2022.

Home Reit said it is in discussions over new leases for the two tenants’ portfolios, with arrangements made for existing care to continue to ensure “there is no impact on underlying residents”.

The stock exchange announcement follows RM Funds’ bid to take over as investment adviser to Home Reit last week.

Speaking to Portfolio Adviser on 1 March, RM portfolio manager Pietro Nicholls highlighted the impact a potential liquidation could have.

He said: “It’s very easy, given it’s a public company, to distil things down into the idea that this is just about share price moving up. The collapse of this vehicle will have a real ripple effect across local authorities, across 2,500 individuals and families that are in a vulnerable state. It’s got political ramifications, it’s a very serious matter and it needs to be dealt with appropriately.”

The future of the trust remains uncertain after it was removed from FTSE Indices at the end of February following the suspension of its shares at the beginning of January.

Home Reit has also received a potential takeover offer from Bluestar.

The trust first came under scrutiny during the final months of 2022 over concerns regarding its viability and investments.

It faced allegations from Viceroy Research in November, which accused the firm of investing in “bad assets”.

In December, law firm Harcus Parker launched a compensation claim on behalf of Home Reit shareholders, who alleged the firm had not followed its original investment philosophy while suffering significant losses.

The trust rejected the allegations, and said it would undertake enhanced auditing procedures in a bid to reassure shareholders.

As a result of these procedures, Home Reit was unable to publish its annual results within the four-month window required by the Financial Conduct Authority, leading to the suspension of its shares.

It also emerged that property deals made by Home Reit were to be examined by the National Crime Agency amid allegations of wrongdoing. In response, Home Reit instructed independent forensic accountancy firm Alvarez & Marsal to investigate.

See also: Scrooge-like short selling attack on Home Reit raises questions



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