Law firm Harcus Parker has initiated the formal stages of a claim on behalf of Home REIT’s shareholders against the company.
The firm said a letter of claim has been sent to the company and its former advisers at Alvarium on behalf of more than 250 claimants, including institutional shareholders. It added that the shareholders “are seeking compensation for losses on their investments”.
Home REIT has sold off properties at discounts to their purchase price, and this week said its remaining portfolio is now valued at just 42% of its acquisition price.
Jennifer Morrissey, partner at Harcus Parker, said: “Home REIT now acknowledges that its property portfolio has been vastly overvalued due to failures to properly understand tenant covenant strength and the quality of the property assets. Despite it now being more than a year since many of these issues were raised, the company still does not appear to understand precisely where its rent is (or should be) coming from.
“A year on, the company is unable to tell what portion of their tenants qualify for social housing benefit, and has provided no clarity whatsoever on how the investors will be compensated for their losses. While the shareholders’ questions remain unanswered, we are now awaiting a response from the company and its former advisers to the letter of claim that we have sent on behalf of a growing body of investors that have joined our claim.”
Home REIT, which remains listed but has its shares suspended from trading, has yet to issue a stock exchange statement on the claim or letter.
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