Bruised Home REIT suspends shares after accusations and delayed accounts
Beleaguered property investor Home REIT announced it would suspend trading on the London Stock Exchange today after being rocked by a slew of accusations over the quality of its tenants and the sustainability of its business model.
The housing firm, which buys up properties and leases them to charities for those without permanent addresses, has come under siege from short sellers and investors since November over the 25 year leases it has dished out to its tenants, many of which have been formed in the past two years and have little or no financial track record.
Short seller Viceroy research, which was one of the first firms to attack collapsed German payments firm Wirecard, said in late November that many of Home REIT’s tenants were unable to pay rent, were run by bad actors or did not provide social housing at all.
The claims forced the firm to delay the publications of its full year accounts. It has since faced further attacks from The Boatman Capital Research and faces a lawsuit from Harcus Parker for misleading investors.
In a statement this morning, Home REIT announced it would now suspend trading on the London Stock Exchange as the deep dive into its accounts is ongoing.
“As previously announced, the Company is being subject to an enhanced set of audit procedures by its independent auditor, BDO LLP. This has delayed the audit to the 2022 Results and has meant it is not possible for the Company to publish by 31 December 2022,” the firm said.
“Therefore, the listing of the Company’s ordinary shares has been temporarily suspended with effect from 7.30 a.m. on 3 January 2023.”
Results coming soon, Home REIT bosses say
Bosses said they intends to request a restoration of the listing of its ordinary shares when its results are published, which it expects “as soon as practicable”.
Home REIT has insisted repeatedly that its rental income is backstopped by the state via exempt housing benefit payments. However, Morning Wire revealed that bosses at the firm admitted in crisis talks with investors that they had no idea how much of rental income actually came via the benefit payments.
Developers of Home REIT’s properties also provide short term rent support to tenants, raising questions over how stable the firm’s rental income is in the longer run.
Home REIT said it would ramp up its due diligence procedures of tenants after the accusations. It has insisted Viceroy’s claims are “baseless and misleading” however.