Home REIT will have to pay an additional 5% fee, amounting to around £10m, on its bank debt.
The fee has been charged on a daily basis from the end of November on the aggregate outstanding loan balances of almost £200m.
The added fee will have to be paid by the 28 June 2024 if the debt is not cleared before then.
At the end of November, Home REIT had total borrowings of £198.3m, comprising a £98.3m interest-only term loan, repayable in 2032, with a fixed all-in rate of 2.07% pa, and a £100m interest-only term loan, repayable in 2036, with a fixed all-in rate of 2.53% pa.
The new fee will effectively triple its debt repayments.
Meanwhile, rents collected for November fell to just 14% of the amount invoiced, or £600,000, down from the 18% collected in October. It is, however, an improvement on the 8% collected in August.
In its monthly update, published this morning, the REIT said: “Whilst this is a decrease on the previous period’s collection of 18%, it is anticipated that rent collection will vary month-on-month in the near term as AEW works on stabilising the portfolio. AEW is pursuing all strategies available to the company, including taking legal action on selected tenants that are not engaging constructively and continue to withhold payment of rent.”
The REIT, which has had its shares suspended since the beginning of the year after being unable to produce its accounts, said it expected its auditor, BDO, to be able to sign off the restated accounts early next year.
This is dependent on a comprehensive revaluation of its 2,307 remaining properties.
JLL has now externally inspected 2,251 properties and internally inspected 194 properties, and the REIT expects to publish valuation information by the end of the calendar year.
According to JLL, none of the properties could be classed as being in a very good condition, while 10% were considered good, 65% fair, 20% poor and 4% very poor.
The REIT said it had also now reviewed almost all the historical transactions for 2,473 properties and was applying revised accounting policies back to inception, which BDO requires in order to produce its enhanced report.
Since July, the REIT, which was set up in 2020 to provide housing for the homeless, has sold 345 properties at auction, equivalent to 14% of its portfolio. The sales have raised approximately £60m, before costs, but at a loss of more than £115m, compared with the price Home paid for them.
The company has used £15m of the net sale proceeds to repay its debt.
It said further sales were expected in the near term, as part of AEW’s strategy to stabilise the financial position of the company.
Home said it had also “made further progress” in identifying a new independent non-executive chair to replace Lynne Fennah. A shortlist of candidates has been identified and the REIT expects to make an appointment before its share listing is restored in early 2024.
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