A REIT mess: Home REIT execs to be grilled on takeover approach and shoddy housing at AGM
Beleaguered housing investor Home REIT is set to be grilled by investors today over the state of its finances, its dilapidated property portfolio and the suitability of a recent takeover approach from a firm with links to its former investment advisor.
The troubled former FTSE 250 firm is due to face shareholders at its annual general meeting in London this morning – the first time it will speak with shareholders publicly after a damning short seller report by Viceroy Research first raised concerns about its financial health in November.
Top investors including Blackrock, M&G and Liontrust, as well as Viceroy, are expected to attend as the board is probed over its admission last week it had only collected 23 per cent of total rent due and its portfolio would require some £15-20m to refurbish.
A string of its biggest tenants are currently withholding rent in protest at the dire state of housing provided by the firm.
City A.M. revealed last week that Home REIT was warned of “slum conditions” in its property portfolio by a whistleblower back in October.
The revelation came just after Home REIT also said it was mulling a take-private deal from a firm called Bluestar.
However, questions are swirling over potential links between the firm and Home REIT’s former investment adviser Alvarium, after it was revealed that Bluestar chief Ben Gotlieb, 32, was a former employee of the firm. Alvarium also owns more than 25 per cent of a Bluestar subsidiary, Bluestar Advisors.
Viceroy chief Fraser Perring told City A.M. it was “laughable that parties connected or associated with Alvarium are now involved with putting a bid together via Bluestar”.
“After wiping out value for investors, they appear to now want to attempt to profit by feeding off the entity we believe they impaired significantly,” he said.
The Boatman Capital, a Home REIT shareholder, which has been agitating for a board change, told City A.M. “an immediate change of leadership is required to ensure investors are not short-changed by a convenient deal with Bluestar.”
Bluestar, however, said on Thursday last week that it no longer had “any business association or otherwise with Alvarium Home or any of its group companies.”
Home REIT revealed last week it had also called in forensic accounting analysts at Alvarez and Marsal to scrutinise wrongdoing after City A.M. revealed the firm was investigating allegations of bribery in January.
Community interest company (CIC) tenants of the firm, who have been left unable to support vulnerable groups, are also hoping for answers over a lack of refurbishment and rent support.
“Where has all the money gone? That’s the big mystery for me,” one CIC tenant told City A.M.
Another source familiar with Home REIT’s operations said the firm has “failed to understand or effectively manage a serious situation when they were alerted and provided with evidence of all wrongdoing”.