Confirmed: Scandal-hit Home REIT calls in AEW and announces plans to offload properties
Scandal-hit housing investor Home REIT has confirmed the appointment of property giant AEW as its new fund manager today and said it will now sell-off a slew of properties as it scrambles to stabilise its sprawling portfolio.
In a statement today, Home REIT confirmed it had called in the property investor after parting ways with former adviser Alvarium, which presided over a breakdown in its tenants and rental income.
City A.M. first revealed AEW would be appointed as fund manager two weeks ago. The firm will be paid £3m a year to manage the firm, Home REIT said.
Former FTSE250 Home REIT has been trying to steady the ship after it was rocked by a short seller report last November. A number of its biggest tenants have since imploded or withheld rent from the firm in protest at the shoddy state of housing it provided.
Home REIT said today that in the five months to the end of April, it collected just £3.4m out of a total £25.9m demanded from tenants.
Bosses said they would now press ahead with a property sale to try and steady its portfolio.
“Following the appointment of AEW, the Board intends to proceed with the sale in the near term of a number of properties, as the company works to stabilise its property portfolio, provide additional liquidity and reduce its borrowings,” Home REIT said.
AEW’s UK arm manages around £1.6bn in a range of different property vehicles in the UK, including its own London-listed REIT. AEW’s UK REIT has fallen 18.2 per cent in value over the past 12 months but has paid a 2p per share dividend for the last 30 consecutive quarters.
AEW will be incentivised to sell properties for Home REIT, with a fee of £422 per bed for every property sold, alongside a rent collection bonus of 10 per cent of all rent collected up to a £10m cap.
The firm’s chief Nick Winsley said in a statement: “While our immediate priority will be to address a number of short-term requirements, we will also undertake a thorough review of the company’s assets that will allow us to formulate a longer-term strategy for the entire portfolio, which we will propose to the board in due course.”
The appointment of AEW could trigger a period of overhaul for Home REIT. The firm’s shares have been suspended on the London Stock Exchange since the beginning of this year and it is yet to file its accounts after failing to get the sign off of auditor BDO.
INvestors are also waiting for the publication of an investigation from advisory firm Alvarez and Marsal, which was called in earlier this year to investigate allegations of potential bribery in its property deals.
Morning Wire revealed in January that the National Crime Agency was also scrutinising its deals.