Beleaguered real estate investment trust Home REIT (HOME) will bring legal proceedings against “those parties it considers are responsible for wrongdoing” amid the Financial Conduct Authority’s investigation into the company.
Home REIT, which has had to sell off significant proportions of its property portfolio at losses due to the collapse of its rent roll, is currently trading on a discount to its net asset value of 70%, while its share price has fallen by 61.6% over the last three years, according to AIC data.
It was announced on 13 February this year that the FCA would investigate the trust, covering the time between its IPO in October 2020 and the suspension of its shares on 3 January 2023, amid accusations of not adhering to its investment policy and delaying its annual results. Home REIT has said it will fully cooperate with the regulator in its work.
In a monthly update published on the London Stock Exchange today (5 March), Home REIT said: “[The company] intends to bring legal proceedings against those parties it considers are responsible for wrongdoing.
“The company cannot comment any further at this stage as to do so may prejudice the company’s position in any potential proceedings. Any relevant announcements in this regard will be made at the appropriate time.”
The REIT entered a ‘period of stabilisation’ in August last year, which included a revised investment policy. Since then, HOME has sold 394 properties amounting to £74.6m in cash, reduced its bank debt from £220m to £149m and initiated a re-financing process.
The company has also rolled out a more stringent programme of property inspections, following accusations that it offloaded assets in ‘poor condition’ leading to losses, with 82 of its holdings being inspected in February. This programme is due to continue throughout March.
Its investment manager AEW UK Investment Management said it has “looked to establish firm foundations from which to move forward”.
“[We] believe the company is able to take the next step forward in terms of implementation of the stabilisation strategy with re-tenanting,” it added. “AEW has several initiatives ongoing and expects to make further positive announcements in the near future.”
