Home REIT has started a succession process to replace its board of directors.
The REIT said it had initiated “a formal and phased succession process”, starting with a new senior independent director.
The REIT said “an individual with significant listed company expertise is being considered for the role”, and will then lead the succession process.
The announcement was made in the first of a series of planned “monthly updates”, as AEW attempts to convince the markets that the REIT is on the mend, ahead of any resumption of trading.
AEW said it had now engaged “with 100% of the tenants” in an effort to understand their status, the underlying occupancy of leased properties and their ability to pay rent.
AEW said this was “with a view to improving rent collection and, where appropriate, re-tenanting assets”. Last month, Home REIT took back leases for more than 100 properties from One CIC, with the company assuming direct leases with the existing sub-tenant, Mears, to generate £891,155 of annual rent. While the new rent paid is more than £300,000 pa less than Home was initially contracted to receive, AEW said it was more likely to actually get paid.
AEW said it expected to “rationalise tenants” during the stabilisation period.
It is currently engaging with the liquidators of two non-performing tenants, Redemption and Serenity, “to unlock opportunities to re-tenant and carry out other asset management initiatives”.
Connells subsidiary Vibrant Energy Matters has been appointed to inspect all 2,473 properties in the portfolio, with target completion by mid-November 2023.
JLL, which took over from Knight Frank as valuer, is also expected to hand back its valuations in November, based on both market value and market value on the assumption of vacant possession.
Home REIT said that, as at 31 August 2023, it had £13.5m in cash, including amounts held on account with the company’s lender and subject to certain restrictions regarding its availability.
The company has just £800,000 of unrestricted cash, but this is expected to rise following the completion of the sale of 40 properties for £4.85m later this month.
AEW said further sales were expected in the near term as part of the strategy to stabilise the financial position of the REIT.
However, shares in the REIT remain suspended and will continue to be until it can publish its long-overdue accounts.
The REIT said it could not publish the accounts until “late 2023 at the earliest”.
It said the valuations and inspections were “a key workstream” for this, and would not be completed until November.
It added that revised accounting policies for lease income recognition and acquisition accounting were also being finalised, which may also result in a restatement of the 2021 accounts.
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