Fresh blow for Home REIT as landlord for the homeless sees two more of its tenants collapse into liquidation

Beleaguered homeless landlord Home REIT has suffered another blow as two more of its tenants collapsed into liquidation.

In a brief update to the market, the firm revealed Redemption Project CIC, which rented 152 properties and represented 11pc of its rent bill for June, had entered voluntary liquidation.

Serenity Support CIC, which was renting ten properties and accounted for 1 per cent of the rent bill, had also gone bust.

Home REIT said the liquidations would allow it to start finding new tenants for the properties and that it was working to ‘minimise any potential disruption’ to the people living there. 

It added: ‘Discussions with other prospective tenants to take on new leases on the properties have already commenced.’

Setback: Landlord for the homeless Home REIT has revealed two of its tenants – Redemption Project CIC and Serenity Support CIC –  have gone bust

Redemption Project is the second Home REIT tenant linked to Gurpaal Singh Judge, a former lettings agent who was also a director of Lotus Sanctuary, another housing charity which collapsed in March.

The property investment firm has been mired in crisis since last November when short-seller Viceroy Research published a report questioning its business model and accounts. 

The group marketed itself to investors as a socially responsible investment, offering accommodation to the homeless.

While it initially dismissed Viceroy’s allegations as ‘without foundation’, it sparked a cascade of disasters that saw trading in the firm’s shares halted in January as auditors from accountancy firm BDO conducted a probe into its accounts, which is still unpublished.

The group was forced to admit it had seen a ‘general deterioration in its rent collection position’.

Home REIT is facing an investigation by the National Crime Agency as well as a lawsuit from law firm Harcus Parker on behalf of investors.

The company also attracted ire in May when a potential buyer Bluestar Group walked away from negotiations with the firm, saying it had become ‘frustrated’ by Home REIT’s board refusing to engage with its proposals.

Home REIT has been trying desperately to stabilise its property portfolio and get cash flowing to stave off collapse. 

Last week, the group unveiled emergency plans to remove its focus on housing only for the vulnerable and instead invest in all kinds of residential property under its new investment manager AEW.

Home REIT said the new strategy needed to be ‘urgently’ implemented, revealing it had only collected 7 per cent of the nearly £8.8million of rent owed to it for the period covering May and June.

Investors will vote on the proposals on August 21, with directors recommending approval.

But some shareholders are thought to be drawing up plans of a possible boardroom coup to bring in new management.

Speculation is continuing to swirl, meanwhile, about the status of Chris Downing, a businessman who sold vast amounts of housing to Home REIT before the crisis hit.

Former associates have alleged he made tens of millions by selling the properties at inflated prices. He denies the claims.

This post first appeared on Dailymail.co.uk