External Property Manager & Company Audit Update
19 January 2023
Home REIT plc
("Home REIT" or the "Company")
Appointment of External Property Manager and Update on Company Audit
Home REIT plc (ticker: HOME), which funds the acquisition and creation of high-quality properties across the UK that are dedicated to providing accommodation to homeless people, announces that Alvarium Home REIT Advisors Limited (the 'Investment Adviser') has entered into an agreement with Simpact Group ('Simpact'), a specialist social housing property manager, to accelerate and further support the Investment Adviser's ongoing asset management and monitoring programme. The cost of this significant investment is borne solely by the Investment Adviser.
Simpact will assist the Investment Adviser with the following ongoing workstreams:
- tenant liaison and monitoring, in addition to rent collection and the recovery of rent arrears;
- a detailed review of the Company's portfolio and improved disclosure on existing tracked metrics such as underlying occupancy, the status of exempt housing benefit applications by tenant partners and the type of residents in occupation, alongside increased due diligence and assessment of tenants, their current business plans and forecasts; and
- the provision of extensive operational advice to certain tenant partners to improve underlying performance, including reducing the approval period for exempt housing benefit applications and increasing the rate of referrals from local authorities.
Following the detailed review, and where applicable, if certain assets are not forecast to improve performance within a sufficient timeframe then Simpact will support the Investment Adviser with the assignment of the relevant leases to a more suitable specialist tenant partner.
Simpact currently manages and oversees a fast-growing social housing portfolio across England and Wales, covering over 100 local authorities. The appointment will result in a team of 40 individuals with extensive knowledge of all social housing tenures, including exempt accommodation and extra care housing for homelessness, supporting the Investment Adviser in achieving the aforementioned review and delivering an increased level of disclosure. The Simpact team brings a wide network of local authority contacts and an existing network of charities, community interest companies and registered housing associations, which will be utilised to optimise the tenant composition of the portfolio.
A further announcement on rent collection and the operational performance of the portfolio following the detailed review undertaken by the Investment Adviser and Simpact will be made in due course.
Update on Company Audit
The Company has previously announced, it is standard practice that, should material allegations be made against a company undergoing an audit, then such company is subjected to an enhanced set of audit procedures which include, but are not limited to, a detailed review of the material allegations made against the Company and its advisors.
The Company's key priority is the publication of its audited financial statements for the year to 31 August 2022, and its advisors have continued to work tirelessly with its auditor, BDO LLP ("BDO"), with all parties working over the Christmas break so that this can be accomplished as soon as possible. Whilst a significant amount of work has been undertaken, as part of the scope of the enhanced audit procedures, BDO has requested the provision of substantial data sets across what is a granular portfolio of over 2,400 properties. Whilst the Company expects to be able to provide this additional information, BDO has advised that it will not be able to conclude its work and internal review process in advance of 31 January. The Company will continue to work with BDO so that it is able to publish the results as soon as is practically possible.
FOR FURTHER INFORMATION, PLEASE CONTACT:
|
FTI Consulting (Communications Adviser) Dido Laurimore Eve Kirmatzis Ellie Perham-Marchant Oliver Harrison |
HomeREIT@fticonsulting.com +44 (0)20 3727 1000 |
The Company's LEI is: 213800A53AOVH3FCGG44.
For more information, please visit the Company's website: www.homereituk.com
About Home REIT plc
Home REIT plc seeks to contribute to the alleviation of homelessness in the UK, whilst targeting inflation-protected income and capital returns, by funding the acquisition and creation of a diversified portfolio of high-quality accommodation assets across the UK which are dedicated to providing accommodation to homeless people. The accommodation assets are let or pre-let on very long (typically 20 to 30 years) leases, containing inflation-linked or fixed uplift rent review provisions, to registered charities, housing associations, community interest companies and other regulated organisations which have a proven operating track record in providing low-cost accommodation to homeless people and which receive housing benefit or comparable support from local or central government to fund the provision of such accommodation to homeless people.
There is a critical need for further accommodation for homeless people in the UK, due to an increasing homeless population and a lack of available and affordable high-quality, fit-for-purpose stock to address the problem. Local housing authorities are under a statutory duty to secure accommodation for individuals who are unintentionally homeless and in priority need but current accommodation for homeless people is limited in quantum and often sub-standard and uneconomical.
The Company focuses on investing in and creating well-located properties that provide a sustainable level of rent for the tenant. Within the homeless accommodation assets, there is a focus on care, support, training and rehabilitation to provide vulnerable homeless people with the skills and confidence to find long-term accommodation and enable them to reintegrate back into society. Savings are expected to be made to local authorities and other providers of accommodation to homeless people via lower rents versus more expensive alternative accommodation.
The Company is listed on the premium segment of the Official List of the UK Financial Conduct Authority and its Ordinary Shares were admitted to trading on the main market of the London Stock Exchange, premium segment, on 12 October 2020.
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