Home REIT has sold 40 properties at a hefty loss as the beleaguered homeless landlord scrambles to pay off debts and raise cash needed for day-to-day operations.
The company, which this week saw two more of its tenants collapse into liquidation, sold the properties for £4.8million, roughly 39 per cent of what it paid for them on average.
That means Home REIT made an average loss of around 61 per cent on the sale of the properties, which represent 1.6 per cent of its whole portfolio.
Home REIT said they had ‘limited prospects for income and capital return’ given the expenditure required ‘to be brought up to specification’.
Home REIT sold the properties at a discount because of their ‘vacant status’ and condition
The discount reflected the ‘vacant status of the majority of the properties and their condition’, it added.
The property firm has been in crisis since last year when questions were raised about its finances and business model.
A report by Viceroy Research triggered a domino effect that saw Home REIT delay its annual results, which remain unpublished. The company’s share price was suspended at the start of this year.
The company remains locked in a series of disputes with tenants about the state of its properties, while others tenants have been unable to pay their rent due to financial problems.
Earlier this week, Home REIT said two more of its tenants collapsed into liquidation.
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.
AEW will restructure its portfolio, with lease lengths made more flexible to ‘better align’ with the needs of residents and councils.
Home REIT, which marketed itself to investors as a socially responsible investment, is also facing allegations of misleading shareholders.
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