Embattled social housing investor Home REIT is set to appoint property giant AEW as its new investment manager as it looks to move on from a string of scandals over the past seven months, City A.M. has learned.
The former FTSE 250 homeless housing investor has been scoping out a new investment adviser since March after sacking its previous adviser Alvarium, which had overseen a collapse in its rental income and a breakdown in its tenant base.
A source close to the discussions told City A.M. that property investment manager AEW will now be appointed as the firm’s new investment adviser in the coming days. Home REIT is understood to have made its decision but the two parties are yet to sign the paperwork and formally agree on the terms of the arrangement.
Home REIT and AEW declined to comment.
AEW’s UK arm manages around £1.6bn in a range of different property vehicles in the UK, including its own London-listed REIT. AEW’s UK REIT has fallen 18.2 per cent in value over the past 12 months but has paid a 2p per share dividend for the last 30 consecutive quarters.
AEW UK head Nick Winsley has overseen the plans submitted to take over the management of Home REIT’s sprawling social housing portfolio and tenant base, which have been in turmoil since a damning short report from Viceroy Research in November.
The appointment of the new investment adviser could trigger an overhaul in Home REIT’s operations and tenant base as it looks to steady the ship after months of scandals.
Home REIT shares collapsed last year before being suspended in January after Viceroy raised the alarm over its business model and shaky tenant base.
Home REIT revealed this year that under Alvarium’s management, tenants had paid just 23 per cent of rent to the firm while its portfolio would require some £15m-£20m to refurbish.
A number of its biggest tenants have since collapsed, including its biggest single tenant Lotus Housing.
Home REIT had initially explored a take-private deal after receiving a takeover bid from Bluestar Advisors. The appointment of the new investment manager is likely to mean that any sale plans have now been shelved.