Troubled Home REIT sells more properties
STRUGGLING Home REIT has once again sold off a chunk of its portfolio for a fraction of its purchase price as it scrambles to raise cash.
The homeless housing firm – which has been under scrutiny since November last year following a report by short-seller Viceroy Research – announced it had sold another 153 properties at a series of auctions earlier this week, raising around £23.4m.
It added that the proceeds amounted to an average of around 35pc of the purchase price for each property.
The sale represented 6.5pc of the group’s overall portfolio, with the properties described as being in ‘poor condition’ and ‘largely vacant’ and requiring significant investment. Of the sold properties, Home REIT said that 73 had been leased to several of its tenants who were now in liquidation and thus the contracts would be surrendered before completion of the sales.
The news followed an announcement on Monday that 14 other properties in the group’s portfolio had been sold at an auction last week for nearly £9m.
Home REIT has spent most of this year scrambling to keep itself afloat after its shares were suspended while it investigated allegations of fraud, which it denies.
A probe by forensic accountants Alvarez & Marsal previously uncovered transparency and due diligence failings by its former investment adviser Alvarium Home REIT Advisors.
Several of the company’s major tenants have also gone bust over the last 12 months, depriving it of much-needed income from rents.
And in August, investors approved plans to scrap policy to only invest in housing for vulnerable people.
It comes as investors continue to await the accounts, which have not been published for over a year. A re-valuation of the remaining properties is also ongoing.