Home REIT has taken back 146 leases held by tenant Redemption Project.
Redemption, which entered creditors voluntary liquidation in August, accounted for 11% of the REIT’s contracted rent roll.
Mears Limited has now become the tenant for 77 of the properties. The tenant, guaranteed by housing and social care provider Mears Group, had occupied 77 of the properties on sub-leases from Redemption. The sub-leases will now transfer to Home REIT, with Mears Limited becoming a direct tenant for the remaining lease term of eight years.
The move will hand Home REIT an initial contracted rental income of £732,720 per annum, a fall of more than a third from the annual contracted rent due from Redemption for the properties of £1.14m.
Home REIT has agreed flexible leases for the remaining 69 properties with Community Accommodation Group, a charity which provides social housing and care, for a term of five years.
It has also appointed Myshon, a specialist supported housing manager, to manage the properties, also on a flexible agreement.
Myshon was previously providing management services in relation to the properties and thus retaining continuity of service will limit any disruption to existing occupants and support services.
This is the second time the REIT has taken over leases from a previous tenant, taking a rent cut in the process. In August, it took back 100 leases from One CIC, with its contracted rent falling by £300,000 per annum to £891,155 pa.
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