Home REIT has collected just 10% of rents due for the month as it weighs refinancing options.
The REIT invoiced for around £3m in January, but received £300,000.
The REIT, set up in 2020 to provide accommodation for homeless people, has had its shares suspended since the beginning of 2023 following a slew of scandals and tenant liquidations.
Its asset manager, AEW UK, is attempting to plot a new course. So far, almost 400 properties have been sold, at around a third of the price Home REIT paid for them.
A revaluation of the portfolio by JLL found that the estate, assembled using nearly £800m of investors’ money, was valued at just 42% of acquisition costs.
Former Helical board member Michael O’Donnell has been brought in as the new chair, replacing Lynne Fennah, while the rest of the current board will step down once the REIT’s 2022 and 2023 accounts are published.
Home REIT is also attempting to streamline its debt. Property sales have allowed the REIT to pay £9.9m in January, with a total of £57.2m debt repaid since the REIT entered a “stabilisation period” in August last year.
Home REIT now has total borrowings of £162.8m, comprising a £72.5m interest-only term loan, repayable in 2032, with a fixed rate of 2.07% pa, and a £90.3m interest-only term loan, repayable on 2036, with a fixed rate of 2.53% pa.
However, it must also pay an additional 5% fee pa, which has been accruing on a daily basis since 30 November 2023. The additional fee is payable at the earlier of 28 June 2024 or full repayment of the loans.
Home REIT said it had “commenced a refinancing process to consider alternative finance options, as part of an exercise to consider the long-term financial stability of the company”.
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