FCA opens investigation into Home REIT
Home REIT said it will collaborate with the FCA in its work
In a stock exchange notice today (13 February), the Home REIT board said it had been notified by the regulator of its commencement of an investigation into the trust, covering the period from 22 September 2020 to 3 January 2023.
«Naturally, the company will cooperate fully with the FCA in its work,» it said.
The FCA has declined to comment.
In October 2020, Home REIT floated on the London Stock Exchange to become the first real estate investment trust focused solely on reducing homelessness. Since IPO, the former FTSE 250 trust has raised over £850m in equity to deliver on this objective.
However, a scathing report published in November 2022 by short-seller Viceroy Research raised questions over the valuation of Home REIT's properties and the ability of its tenants to pay rent.
'The circle is collapsing': How a demolished house in Lancashire uncovered Home REIT's broken business model
Under increased scrutiny following the report, the trust failed to publish its annual accounts, culminating in the suspension of its shares on 3 January 2023.
Last June, an Investment Week investigation brought to light the extent of former investment adviser Alvarium's due diligence failings, revealing a complex web of conflicts of interest between the trust's tenants and property developers.
In an attempt to remedy the trust's rent collection issues amid a raft of tenant liquidations, new investment adviser AEW initiated a stabilisation period for Home REIT, which would involve a programme of re-tenanting and property sales to steady its financial position.
After the trust reported at the tail end of last year that its portfolio is now worth less than half of what it spent
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