Britain’s Home REIT considers selling properties to tackle financial woes

Last week, Britain’s Home REIT stated that it is actively considering the possibility of selling some of its properties soon, as the housing provider deals with various challenges, including tenants defaulting on rent payments. Home REIT has recently been in the spotlight due to an unsolicited takeover approach from Bluestar Group Ltd in February, as well as concerns raised by Viceroy Research in a short-selling report about the ability of the company’s tenants to fulfil their rent obligations.

The organization that provides housing for the homeless stated that it is currently evaluating six proposals for the appointment of a new investment adviser. Additionally, it plans to inform its shareholders about any proposed changes to its investment policy. The organization owns a portfolio of approximately 2,400 properties located in England and Wales, which are rented out to charity organizations and other community interest firms.

Home REIT also confirmed that it will be repaying £30 million ($37.5 million) to its lender, as this amount was not utilized as general working capital. This repayment will result in a reduction of the outstanding debt to £220 million.

Home REIT, which has been facing challenges, is contemplating the potential sale of the entire company following an unsolicited approach from Bluestar Group Limited. The offer from Bluestar is likely to be in cash, but Home REIT stated that there is no guarantee that an offer will ultimately be made. In light of Home REIT’s declining rent collection rate at the end of 2022, the board is considering all strategic options for the company, including the possibility of a sale.

Bluestar, founded by Ben Gotlieb, is a special situations investment company focused on acquiring and providing capital to real estate-backed businesses and development projects across Europe. Notably, Ben Gotlieb is a former member of Alvarium Investments, which was Home REIT’s previous manager.

Earlier this month, it was reported that the National Crime Agency is investigating the company for alleged bribery. The board of the company has confirmed that it engaged independent forensic accounting experts, Alvarez & Marsal, in January 2023 to investigate these allegations. The investigation is ongoing, and the outcome cannot be confirmed at this stage. Regarding the possible sale of the company, the board stated that it will work with Smith Square Partners and other advisers to safeguard shareholder value throughout the process. Further statements will be made as appropriate.

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Britain’s Home REIT considers selling properties to tackle financial woes

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