“The company reserves all of its rights in respect of the matters referred to in today’s announcement and is still considering the conclusions and implications of the revaluation exercise with its advisors, and what consequential actions it may take.”
Home REIT debuted on the London Stock Exchange in October 2020, but has been rocked by difficulties since November 2022, after Viceroy Research, the short-seller, raised doubts about its business model.
The fund leases more than 10,000 beds across 135 local authorities to charities to provide accommodation for homeless people.
Trading in Home REIT’s shares was suspended in January 2023 after it missed a deadline to publish its annual report.
Harcus Parker is bringing a lawsuit against Home REIT on behalf of 250 of the company’s shareholders, who are seeking compensation for losses on their investments.
Jennifer Morrissey, a partner at the law firm, said: “Home REIT now acknowledges that its property portfolio has been vastly overvalued due to failures to properly understand tenant covenant strength and the quality of the property assets.
“Despite it now being more than a year since many of these issues were raised, the company still does not appear to understand precisely where its rent is (or should be) coming from.
“A year on, the company is unable to tell what portion of their tenants qualify for social housing benefit, and has provided no clarity whatsoever on how the investors will be compensated for their losses.
“While the shareholders’ questions remain unanswered, we are now awaiting a response from the company and its former advisors to the letter of claim that we have sent on behalf of a growing body of investors.”
Home REIT declined to comment on the lawsuit.
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