Home REIT has reassigned the leases at 146 properties that had formerly been occupied by Redemption Project CIC, which went bust earlier this month.
Home REIT will now hope to receive rent on the portfolio of properties (which equates to 6% of its portfolio by number) having not been paid by Redemption for the whole of 2023 so far.
Mears Limited, guaranteed by Mears Group PLC, the housing and social care provider, has been occupying 77 of the properties on sub-leases from Redemption. These sub-leases will now transfer to Home REIT, with Mears Limited becoming a direct tenant for the remaining lease term of eight years with an initial contracted rental income of £732,720 per annum – 64% of the annual contracted rent due from Redemption for these 77 properties.
Following the transaction, the company’s direct exposure to Mears Limited increases to 177 properties and £1,623,875 per annum of contracted rent.
For the remaining 69 properties, the company has agreed flexible leases with the Community Accommodation Group, a charitable incorporated organisation and a provider of social housing and care, for a term for five years. It has appointed Myshon Limited, a specialist intensive housing manager with a specific focus on specialist supported housing, supported housing and affordable housing, to manage the properties, also on a flexible agreement. Myshon Limited was previously providing management services in relation to the properties and thus retaining continuity of service will limit any disruption to existing occupants and support services.
This transaction completely removes the Home REIT’s exposure to Redemption, which accounted for 11% of the company’s annual contracted rent as at 31 August 2023.
HOME : Home REIT reassigns leases on 146 properties