Home REIT has sold a further 153 properties, at just a third of the price it paid for them.
Over the past two days the REIT raised £24.3m from the sales, which represent 6.5% of the company’s total portfolio. Home REIT paid more than £70m for the portfolio less than a year and a half ago.
Completion is expected in approximately one month.
The sale properties were those identified by its investment manager, AEW, as being in poor condition, largely vacant and requiring significant capital expenditure to be brought up to specification.
Of these, 73 properties were subject to leases with tenants in liquidation, which will be surrendered prior to completion.
Tenants in liquidation accounted for 20% of annual rent due to the REIT. In a monthly update earlier this week, Home REIT said it had received just 18% of rent due, although this was a marked improvement on the 3% it received the previous month.
So far Home REIT has disposed of more than 100 properties, all at significant discounts to the purchase price. The REIT acknowledged that the proceeds from the latest sale represented “an average of 35% of their purchase price”.
Home REIT’s shares have been suspended since January after BDO refused to sign off and publish its accounts. This followed the publication of revelations by short-seller Viceroy that it had overpaid for assets, and that many of its tenants had very poor covenants, with some having only been set up within days of taking the properties.
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