Home REIT collected just 3% of rents owed in September, as AEW attempts to stabilise the business.
The investment manager, which was appointed at the end of August, has now completed lease surrenders on 10% of Home REIT’s portfolio, as part of its stabilisation strategy.
Rent collection reduced to 3% for the month of September, from 7% for the three-month period to the end of August.
The REIT said this was a result of “the continuing deterioration of some paying tenants’ financial strength and their ability to meet rental payments”.
Tenants in liquidation currently account for 21% of the REIT’s rent roll, as at the end of September, and AEW said it “expects more tenants to enter into liquidation in the short term”.
While this provides the opportunity for AEW to relet and carry out other asset management initiatives, it is also further hammering the REIT’s already weakened rental income.
Mears, which has taken over the leases for 177 properties from collapsed tenants including Redemption Project CIC, is paying just over half the rent that should have been paid by Redemption. But, as Redemption had not paid any rent in 2023, the REIT sees this as a win.
Home REIT now has 2,432 properties and 31 tenants, with an annual rent roll of £48.5m, down from £53.9m. However, it has been paid just £100,000, or 3%, down from £900,000 in August.
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