Valeria Martinez, Investment Week, 22 July 2024:
This October marks four years since Home REIT debuted on the London Stock Exchange.
Typically, that would be a milestone to celebrate, if it were not for the fact that shareholders have been unable to trade its shares for nearly half of that time.
After two rocky years for investors in the former FTSE 250 trust, news of a proposed managed wind-down earlier this week (16 July) could finally offer some relief.
At the same time, the proposal also dashes any hopes of a turnaround for the once-hopeful AEW, which took on the investment management mandate nearly a year ago..
Once the loan is repaid with proceeds from property sales, the remaining portfolio is expected to be valued at around £200m, which stands in stark contrast to the more than £850m in equity the trust raised from the City’s largest fund managers, pensions and retail investors..
Although the focus on how much shareholders can minimise their losses is, of course, very reasonable, it is also worrying to think what will happen to the vulnerable people living in Home REIT’s properties..
Inevitably, this regrettable saga raises questions about whether sheltered accommodation, and even social housing more broadly, is a viable asset in the public markets.
Triple Point Social Housing REIT (SOHO), which provides specially adapted accommodation for individuals with disabilities or long-term care needs and, unlike Home REIT, is regulated, is trading at a steep 55% discount, having also struggled with rent collection issues..
Richard Williams, property analyst at QuotedData, told me “no comparison” can be made between Home REIT and SOHO.
Social housing is subject to “robust regulation”, he said, with many of the housing associations closely scrutinised by the regulator in recent years.
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