‘Landlord for the homeless’ Home Reit hits back in short-seller spat

Embattled property firm Home Reit fought back against a notorious short-seller yesterday as the battle between the pair intensified.

The FTSE 250 firm, which floated in 2020 and serves as a landlord for charities, government and local authorities that house homeless people, said criticism by Viceroy Research was ‘baseless and misleading’.

And it called on Viceroy, which is headed by activist investor Fraser Perring, to ‘engage’ with the company and stop its ‘campaign in the media’.

Critic: Viceroy Research is headed by activist investor Fraser Perring (pictured) who began short-selling in 2012 after he was struck off as a child protection officer for Lincolnshire council

With shares down nearly 30 per cent after last week’s attack, Home Reit chairman Lynne Fennah said: ‘This is a business whose sole focus is on providing safe and secure accommodation to some of the most vulnerable in society, whilst generating shareholder value. It is with deep frustration that the board is having to spend time and resources responding to baseless and misleading allegations.’

That did little to calm nerves in the City as Home Reit fell another 9.3 per cent, or 5.2p, to an all-time low of 50.6p yesterday.

Last week, Viceroy questioned the business model and its ability to collect rent. It alleged a number of Home Reit tenants, many of which are charities, ‘cannot afford rent, have not been paying rent, are in administration, are run by bad actors, or simply do not provide social housing services’.

Viceroy concluded the issues ‘raise questions about the financial viability of Home Reit’s portfolio’ and bosses were ‘not the people who should be entrusted to look after the vulnerable’. 

The attack has forced Home Reit to delay its financial results, which were due to be published on Monday, as it awaited verification from its auditor after Viceroy’s report.

The company yesterday hit back, saying it has ‘no overdue arrears’ on rent payments billed to the end of August and that the value of its portfolio was estimated externally and not inflated by the trust’s fund manager Alvarium.

But Viceroy said Home Reit’s response ‘all but confirms’ the allegations and was a ‘shot in the foot’ for the firm.

The short seller accused the group of creating an ‘intentionally misdirected’ response to concerns about the valuation of its properties.

The back and forth did little to ease anxiety among investors, with analysts at broker Peel Hunt saying the response to Viceroy left some questions ‘unanswered, including those at a more fundamental, strategic level’. They added that investors had reason to be ‘concerned’ over the company’s strategy.

The row threatens to pit Alvarium, an investment manager with over £18billion in assets, against Perring in a conflict that could engulf some of the UK’s most vulnerable people.

The activist investor is a well-known name on the continent, having been one of the loudest voices to raise the alarm over German payments group Wirecard, which collapsed in 2020 after a accounting scandal that saw its chief executive arrested and chief operating officer go into hiding.

Since then, Perring has targeted other property firms before Home Reit ended up in his crosshairs.

Viceroy previously accused German leasing group Grenke of accounting fraud while property firm Adler was found to have suffered widespread governance and compliance failures following a probe by audit giant KPMG.

This post first appeared on Dailymail.co.uk