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Home REIT paid over £1m for row of terraced houses later converted into large-scale cannabis grow

Home REIT paid over £1m for row of terraced houses later converted into large-scale cannabis grow

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Valeria Martinez, Investment Week, 10 April 2024:

Home REIT paid more than £1m for four adjacent houses in the Lincolnshire seaside town of Cleethorpes that criminals later unlawfully converted into a 6,400 square foot cannabis farm.

A spokesperson for the Humberside Police confirmed to Investment Week that a suspected cannabis grow was discovered by officers in those four properties in mid-July 2023. The terraced houses were owned by Home REIT at the time of discovery, according to HM Land Registry..

This takes the total number of properties owned by the trust known to have been unlawfully converted to cannabis grows to eight, including the four houses uncovered by Investment Week last month.

The eight properties, which are scattered across England, were awaiting renovation by Pathway Homes Group when they were illegally occupied, and had been leased to Supportive Homes CIC.

Pathway Homes Group was also the aggregator that sold the eight properties to Home REIT at the end of 2021. The four adjoining properties in Cleethorpes were purchased by the trust as a single lot for more than £1m, Investment Week understands.

Before the developer went into liquidation in April 2023, Pathway Homes Group was one of the trust’s largest aggregators, leasing properties to a number of tenant groups, which were then contracted to provide rooms to vulnerable people.

One of those tenant groups was Supportive Homes CIC, which represented 11.3% of the rent demanded by the trust in August 2023. The tenant gave up its leases in September 2023 upon entering into a creditors’ voluntary liquidation..

QuotedData research analyst Richard Williams described the development as unsurprising in the “Home REIT circus”, while noting the level of culpability and complicity in wrongdoing of Alvarium “will come out in the wash”.

“What is clear, however, is that they overpaid for properties, failed to execute even basic levels of due diligence, and misled the board and investors on the quality of the properties, tenants and cash flows,” he added.