NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
SUCH JURISDICTION
5 August 2024
Home REIT plc
("HOME" or the
"Company")
Monthly Update
The Board of HOME and AEW UK Investment
Management LLP ("AEW" or the "Investment Manager") provide their
monthly update in respect of July 2024.
Managed Wind-Down
proposal
On 16 July 2024, the Company
announced the proposed adoption of a managed wind-down strategy
(the "Managed Wind-Down") pursuant to which the assets of the
Company would be sold with the objectives of optimising remaining
shareholder value and repaying the Company's loan balance.
The implementation of the proposed Managed Wind-Down will require a
change to the Company's investment policy and the Company expects
to publish a circular in the near future to seek approval from
shareholders for this.
The Company will continue to provide
regular updates during the Managed Wind-Down, however this, and the
level of disclosure included, will be reviewed throughout the
process in order to protect the Company's commercial interests and
allow disposals to be completed in a manner that preserves
shareholder value.
Monthly Summary
· As
announced on 2 August 2024, 226 properties exchanged for sale at
auction for a total of £26.5m at auctions held over the previous
three days.
·
Repayment of £8.5m of debt to the Company's lender in July
comprising a cash repayment of £7.4m and net break gains of £1.1m
applied to loan principal. Total borrowings were reduced to £106.1m
as at 31 July 2024.
·
Total income received for the month was £0.65m, which
represents a 13% increase from the previous month.
· The
Company's audited results for the year ended 31 August 2022 ("FY22
Audit") are now expected to be published in late August 2024 or
early September.
·
Lynne Fennah has notified the Company of her intention to
step down from the Board on the publication of the 2023 financial
results, but will continue to assist the Company, when necessary,
on historic legal and FCA matters.
Portfolio and Financial
Highlights
|
Financial Position (Unaudited)
|
As at
31 August
2023
|
As at
31st July
2024
|
|
Valuation:
|
|
|
|
Draft August 2023
Valuation
|
£412.9m
|
£282.1m
1
|
|
Number of properties
|
2,473
|
1,560
|
|
Cash and Borrowings:
|
|
|
|
Unrestricted Cash
|
£0.8m
|
£6.9m
|
|
Total Cash
|
£13.5m
|
£14.2m
|
|
Borrowings
|
£220.0m
|
£106.1m
|
|
Net debt
|
£206.5m
|
£91.9m
|
|
Income:
|
|
|
|
Annual Contracted Operating Lease
Rent
|
£53.9m
|
£15.3m
|
|
Tenants 2,
3
|
29
|
23
|
|
Properties under lease to
tenants
|
2,358
|
751
|
|
Properties under property management
agreements
|
115
|
809
|
|
|
|
|
|
|
To date
1
September 2023 to
31 July
2024
|
Month
1 July
2024 to 31 July 2024
|
|
Investment Activity:
|
|
|
|
Properties sold in the
period
|
£128.8m
|
£16.4m
|
|
Number of properties sold in
period
|
914
|
124
|
|
Properties exchanged in period/not
yet completed
|
£34.1m
4
|
£26.5m
4
|
|
Number of properties exchanged not
yet completed at period end
|
287
4
|
226
4
|
|
Rent Collection:
|
|
|
|
Operating lease rent
collection
|
3.8m
|
£0.2m
|
|
Operating lease rent
collection 6 %
|
11%
|
19%
|
|
Management agreement income
collection
|
£1.8m
|
£0.4m
|
|
Total income collected
|
£5.6m
|
£0.6m
|
|
Inspections:
|
|
|
|
Completed 7
|
2,144
|
-
|
|
Occupancy: (at date of
inspection on 1,577 Vibrant inspections)
Occupancy (at least one bed
occupied)
Vacant (whole building)
|
78%
22%
|
1 Proforma
value at 31 July 2024 being draft valuation as at 31 August 2023
(as announced on 20 December 2023) less disposals in
period.
2 Excluding
properties under separate management agreements
3 Excluding properties under property management agreements with
HOME having direct AST leases with occupiers
4 Including properties sold in the auction on 1st
August 2024
6 Rent collection - rent collected including arrears /rent
invoiced for the period
7 Inspections - these are of the portfolio held as at 31 August
2023.
FOR
FURTHER INFORMATION, PLEASE CONTACT:
|
FTI Consulting (Communications
Adviser)
Dido Laurimore
Eve Kirmatzis
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
Investment Activity
·
Following announcements of exchanges at auction in previous
months, 124 properties completed during July for a total of
£16.4m.
· As
announced on 2 August 2024, 226 properties were exchanged for sale
at auctions over the previous three days for a total of
£26.5m.
·
Since August 2023, the Company has completed on the sale of
914 properties and exchanged on a further 287 properties. The gross
proceeds from properties sold and exchanged totals £162.9m, which
in aggregate is in line with the August 2023 draft
valuation.
Financial Position and Related
Matters
· The
Company had a cash balance of £14.2m as at 31 July 2024 of which
£6.9m is unrestricted.
· The
Company repaid £8.5m of debt to the Company's lender in July
comprising a cash repayment of £7.4m and a net break gain of £1.1m
also being applied in repayment of the debt. A total of £113.9m of
debt has been repaid since the Company entered the stabilisation
period during August 2023.
· As
at 31 July 2024, the Company has total borrowings of £106.1m,
comprising a £15.8m interest-only term loan, repayable in 2032,
with a fixed rate of 2.07% per annum, and a £90.3m interest-only
term loan, repayable on 2036, with a fixed rate of 2.53%per
annum.
· As
mentioned in previous announcements, an additional fee of 5.00% per
annum is charged on the aggregate outstanding loan balances, with
the fee accruing on a daily basis from 30 November 2023. The
additional fee increased from 5.00% to 7.00% from 1 July 2024 until
the full repayment of the loan.
· The
lender expects to be fully repaid no later than 31 December
2024.
· The
Company continues to service interest payments in full as they fall
due.
Valuation, Publication of the Annual
and Interim Reports
· The
Company's audited results for the year ended 31 August 2022 ("FY22
Audit") are expected to be published during late August or early
September 2024.
· The
audited results for the year ended 31 August 2023 have been
prepared in parallel and, along with interim results for the
periods to 28 February 2023 and 2024 respectively, are expected to
be published during the third quarter.
· The
Board and AEW remain committed to the restoration of trading in the
Company's ordinary shares as soon as is practically
possible.
Rent Collection and Tenant
Engagement
· Due
to the recent tenant surrender deals and the subsequent increase in
properties under management agreements, rent collection is now
being reported on two bases: operating lease rent and management
agreement income.
·
Rent collection on operating leases for the month of July was
£0.2m, representing 19% of the rent invoiced for the period. AEW
continues to work with selected tenants on payment
plans.
·
Total net income collected for the month of July from
properties under management agreements was £0.4m. The income
reported is net income, as the income is still to be reconciled by
the Property Managers due to the extensive onboarding process
underway. Once this exercise is complete, both the gross and net
income received will be reported.
·
Total income received for the month of July was £0.65m, this
is a 13% increase from the previous month.
· The
Company is progressing legal action against selected non-performing
tenants.
Shareholder Engagement
· AEW
continues engagement with the Company's shareholders. The next
Webinar update will be held in September the date of which will be
announced following publication of the Investor
Circular.
Potential Litigation
· No
changes to the potential litigation position occurred during the
month. Any relevant announcements in this regard will
continue to be made to the market at the appropriate
time.
Board Succession
· As
previously announced Marlene Wood, Simon Moore and Peter Cardwell
have advised the Company that they will step down from the Board on
the publication of the 2023 financial results. Lynne Fennah, has
now also notified the Company of her intention to step down at the
same time but will continue to assist the Company, when necessary,
on historic legal and FCA matters.
Portfolio and tenant
breakdown
|
Geographic
Region
As at 31 July
2024
|
Number of
Properties
|
Number of Properties
(%)
|
|
North East
|
424
|
30.1%
|
|
North West
|
347
|
21.4%
|
|
Yorkshire and the Humber
|
212
|
13.5%
|
|
East Midlands
|
165
|
9.9%
|
|
West Midlands
|
152
|
9.0%
|
|
South West
|
103
|
6.2%
|
|
London
|
69
|
4.3%
|
|
South East
|
52
|
3.1%
|
|
Wales
|
18
|
1.4%
|
|
East of England
|
18
|
1.1%
|
|
Total
|
1,560
|
100.0%
|
|
Operating
Leases - Top 10 Tenants
As at 31 July
2024
|
Number of Properties
|
% of portfolio annual contracted
rent
|
|
One (Housing & Support)
CIC
|
110
|
26.3%
|
|
Mears Ltd
|
177
|
12.6%
|
|
LTG Vision CIC
|
171
|
11.8%
|
|
Gen Liv UK
CIC1
|
44
|
9.1%
|
|
Community Restore CIC
|
46
|
6.5%
|
|
Supportive Homes
CIC1
|
34
|
5.7%
|
|
Mansit Housing CIC
|
68
|
5.2%
|
|
Lifeline (NW) CIC
|
10
|
3.8%
|
|
Complete Homes NW CIC
|
20
|
3.5%
|
|
Concept Housing Association
CIC
|
4
|
3.5%
|
|
Total
|
684
|
88.0%
|
|
|
|
|
1 In
liquidation
Tenants in liquidation (Gen Liv UK CIC, Supportive Homes CIC and
Marigold Housing) account for 17.0% of the annual contracted rent
as at 31 July 2024.