By James Baxter-Derrington, INVESTMENT EDITOR, The Telegraph, 16 July 2024:
Home REIT, a real estate investment trust, has announced it will be winding down after struggling with rising debts, legal action from disgruntled investors and an investigation by the City watchdog.
The popular property trust was forced to suspend its shares in January 2023 after failing to publish its accounts, preventing investors from selling their holdings.
It follows concerns the properties held in the fund’s portfolio had been overvalued and an investigation by trade title Investment Week in March which revealed that at least eight properties owned by Home REIT had been converted into cannabis farms. These have since been cleared by the police and sold on at auction to new owners, at a considerable loss to the trust.
One such property, in Scarborough, was sold for a loss of more than 70pc.
In a statement today, the trust said continued management had become unviable after failing to renegotiate its debts on terms that would be acceptable to shareholders..
In December 2023, the trust, which counted pension funds among its investors, admitted its £1bn portfolio was only worth around £400m, although during recent auctions the houses have failed to reach even these discounted valuations.
Since it began selling its portfolio of properties last summer, Home REIT has auctioned almost a third of its properties for a total price of just £112.5m, an average price of £142,405..
Facing litigation, investigation, and with its 2022 accounts still unpublished, it could be “years” until investors see a penny, according to Richard Williams, a senior analyst at financial research firm QuotedData.
“How much, if anything, will be left after all this is ‘finger in the air’ stuff at this stage,” he said.
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