Embattled homeless accommodation provider Home REIT has suffered a further deterioration in rent collection with one of its tenants yet to pay rent for the quarter to 30 November 2022.
Lotus Sanctuary, which represents 12.2% of the company’s overall rent roll providing 939 beds predominantly to vulnerable women, has suffered delays in the approval of exempt housing benefit applications and is under scrutiny around its viability as a going concern. Just 55% of its beds are currently occupied.
Home said it was working with Lotus to ameliorate the operational issues it is currently facing, including by providing advice from Simpact Group, which was recently appointed by Alvarium Home REIT Advisors Limited to accelerate a detailed ongoing review of the company’s portfolio.
The advice, Home said, was focused on increasing the levels of referrals to increase underlying occupancy levels and decreasing the time delay in regards to receiving approval for exempt housing benefit applications.
It added that following approval of an exempt housing benefit claim, the payment from a local authority is typically backdated to the initial date of the claim, including the amount due for rent, thereby assisting a tenant in clearing landlord arrears that may have accrued as a result.
Should Lotus not be viable as a going concern and entered administration or liquidation, Home said it would seek to assign leases to alternative providers or to local authorities or registered housing associations on a short-term basis to ensure continuity for the underlying residents.
In a statement, Home said: “The company has witnessed a deterioration in its rent collection position, with a significant number of its tenants in arrears in regards to the quarter to 30 November 2022. The Investment Adviser, assisted by Simpact Group, is establishing the reasons behind this deterioration and the Company has issued a number of statutory demands to tenants this month. The Company does not wish to prejudge this legal process and will provide a further update to the market by mid-February when this process has concluded. At this point the Investment Adviser and Simpact will also provide the initial results of their detailed review of the portfolio and strategy to resolve these operational issues.”
Home has suffered many setbacks since a short seller attack in November last year. Its share price tanked following the report by Viceroy Research and trading in its shares has since been suspended after it failed to publish full year results within the statutory time frame due to an enforced enhanced audit process following the allegations.
Earlier this month Home confirmed press reports that two of its tenants had withheld rent.
HOME : Home REIT rent collection takes another hit