Home REIT to be wound down

Home REIT, the troubled investment firm established to invest in accommodation for the homeless, is to be wound down. Last month the company confirmed it had been unable to refinance its existing debt with Scottish Widows. Home REIT said in a stock market notice today that its stabilisation strategy now faces “considerable challenges”. “These include a high fixed corporate cost base, required due to the REIT structure and as a result of the issues being dealt with by the company at this time, and the requirement for capital expenditure to drive an increase in rental value and valuation of the portfolio. In addition, the board is aware that the size of the vehicle following the repayment of debt may be considered too small by many investors when considering its future as a listed REIT.” Instead, the company said, a managed wind-down and sell-off of assets is now in the best interests of shareholders.  “It has been clear from consultation with key shareholders and the feedback received following the [failure to refinance] announcement on 17 June 2024 that there is significant support for a realisation strategy and the return of capital to shareholders when the company is able to do so,” the company said. Non-executive chairman Michael O’Donnell said: “It is clear that Home REIT continues to face extensive challenges, including in respect of its debt position and pursuing and defending litigation action, and responding to an FCA investigation. Against this backdrop and the expected reduced size of the company’s portfolio, following an extensive review the board has concluded that the best course of action for shareholders is to propose a managed wind-down strategy.” If the wind-down is approved by shareholders, Home REIT said investment manager AEW will take “a broad and managed approach to the disposal of assets”, with some having to be sold by 31 December to meet the requirements of Scottish Widows and repay the outstanding debt.