Sheltered housing investors may sue after short-seller woe
LONDON: A sheltered housing investment trust that has come under attack from short-sellers, is facing new allegations that it misled shareholders and owes them redress for “significant losses”.
Harcus Parker, a law firm based in London that specialises in mounting class actions, said that it was considering suing Home Reit on behalf of investors after its research allegedly found that the trust had “used investors’ money in a way which runs contrary to what investors were told”.
Home Reit floated in October 2020 and then tapped investors for £850 million, which it spent on a portfolio of almost 12,000 beds in houses and small blocks of flats let to the homeless.
It says that “robust tenants” such as charities and local councils rent the properties, typically on 25-year leases, to house homeless people.
Harcus Parker claimed that some of the properties “have been found by local authorities to be unsuitable for housing vulnerable individuals” and therefore did not qualify as “exempt accommodation”.
The law firm alleged that some of the properties had been marketed to students and professionals and even as holiday lets. It also raised concerns about the financial position of Home Reit’s charities and housing association tenants, and questioned some of the property deals it had been involved in.
Last month Home Reit was hit by an attack from Viceroy Research, the short-seller that first raised the alarm over Wirecard. Viceroy flagged similar concerns with the business.
The activist investor Boatman Capital Research has also weighed in, pressing for the resignation of Home Reit’s chairwoman Lynne Fennah and Marlene Wood, the chairwoman of its audit committee. Boatman Capital has accused the company of being “over-optimistic in its assumptions” on the value of its portfolio.
The allegations meant that the company’s results, which were due last week, had to be delayed.
Home Reit’s shares have fallen by 60 per cent this year and yesterday were down by another 1p, or 1.8 per cent, at 50p.
Home Reit called Viceroy’s claims “baseless and misleading”. A spokeswoman said it was reviewing Harcus Parker’s allegations.
