eleaguered property investment trust Home REIT suffered another blow today after one of its biggest tenants went bust.
Redemption Project, a tenant of 152 properties in the company’s portfolio, had entered into voluntary liquidation, Home REIT said, another tenant, Serenity Support, which occupied 10 properties, had also collapsed.
Together, the two firms made up 12% of Home REIT’s rent demanded in June. Begbies Traynor and Cornerstone Business Recovery had been appointed as liquidators.
Redemption Project, a non-profit, was set up to provide accommodation for rough sleepers, victims of domestic abuse, sexually exploited women and recovering drug addicts. It was registered as a Community Interest Company (CIC), a corporate status for businesses which support local communities. Serenity Support was also a CIC and was launched to help those with mental health conditions.
Home REIT said discussions with prospective new tenants for the site were already underway and it was “working with the respective liquidators to ensure a smooth handover in an attempt to minimise any potential disruption to underlying occupants.”
Home REIT has been under scrutiny over the last few months after a short-seller report by Viceroy Research questioned the ability of its tenants to pay rent, among other issues.
Home REIT initially rebuffed those concerns, describing them as “without foundation” but it has since admitted it “has seen a general deterioration in its rent collection position” with several of its clients failing to pay rent on time.
Trading in its shares has been suspended since 3 January.