Home REIT says two tenants have entered voluntary liquidation

Home REIT said on Monday that two of its tenants - which together make up just over 18% of its annual rent roll - had entered into creditors' voluntary liquidation.

The two tenants involved are Gen Liv UK, which makes up 5.7% of the group’s annual rent roll, and Lotus Sanctuary, which makes up 12.5%. Gen Liv has appointed FRP Advisory Trading Limited as liquidators.

"The company is in discussions with prospective tenants to take on new leases of Gen Liv UK CIC's and Lotus Sanctuary CIC's portfolios and it should be noted that whilst discussions with prospective tenants are ongoing, arrangements have been made for existing care and support services to continue, to ensure that there is no impact on underlying residents," Home REIT said.

The company, which funds the acquisition and creation of properties across the UK dedicated to providing accommodation to the homeless, said no resident will lose their accommodation as a result of the voluntary liquidations.

Home REIT shares tumbled in November after Delaware-based short-selling firm Viceroy Research put out a note in which it said that an investigation into the group's investments and tenants had suggested "significant downside".

Viceroy said at the time that financial data of Home REIT’s tenants had shown that many could not afford rent, had not been paying rent, were in administration, run by bad actors, or simply did not provide social housing services.

It concluded: "Home REIT’s tenants raise questions about the financial viability of Home REIT’s portfolio, and also about the appropriateness of this venture.

"We strongly believe that these are not the people who should be entrusted to look after the vulnerable, nor should they be entrusted with your taxes to do so. This industry is nascent, subject to limited oversight, and has begun breeding a plethora of for-profit vultures who have limited ability to actually run a charity or social enterprise.

"Scrutiny in these industries should be encouraged. Viceroy Research is short Home REIT."