Home REIT says Viceroy report is 'inaccurate and misleading'

Home REIT hit back on Wednesday after a research report by Delaware-based short-selling firm Viceroy Research sent its shares tumbling.

Although the company did not name the firm in its statement, Viceroy put out a note earlier in which it said that an investigation into the group's investments and tenants had suggested "significant downside".

Home REIT - which funds the acquisition and creation of properties across the UK that are dedicated to providing accommodation to the homeless - said the report was published without any engagement with the board, investment advisor, or wider advisory team.

"It is the board's belief that the report is inaccurate and misleading in its comments about the company, being based on mistaken assumptions, misinformed comments, and disputable allegations," it said.

Home REIT said it will publish a full and detailed response "demonstrating the factual inaccuracies and selective use of information in due course". This will be done "as soon as reasonably practicable".

At 1320 GMT, the shares were down 25% at 58.22p.

Viceroy said: "Poor operating results are already reflected in Home REIT’s financials, however management incentives are not aligned with ‘fixing’ these problems, but only rolling up more bad assets."

It said financial data of Home REIT’s tenants show that many cannot afford rent, have not been paying rent, are in administration, are run by bad actors, or simply do not provide social housing services.

In the conclusion of its report, Viceroy said: "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."