Home REIT faces lawsuit on claims of profiting from homeless crisis

(Alliance News) - Home REIT PLC on Wednesday suffered another blow to its reputation amidst ...

Alliance News 7 December, 2022 | 5:24PM
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(Alliance News) - Home REIT PLC on Wednesday suffered another blow to its reputation amidst ongoing short-selling controversy, as law firm Harcus Parker announced it would be seeking redress for misled shareholders.

The lawsuit follows on from Home REIT's ongoing dispute with Viceroy Research, whose report accusing executives of short-selling drove a share price slide last week that pushed the company out of the FTSE 250 index.

The London-listed real estate investment trust publicly rebutted the claims levied in the report, describing it as "inaccurate and misleading".

However, Viceroy last Wednesday claimed that Home REIT's response "all but [confirmed] round-tripping of revenues to tenants via vendor agreements, low tenant quality and related party structures between major tenants".

For example, while the company claims to have paid for EPC upgrades at all of its properties, Viceroy said that "a casual search of Home REIT's properties [showed] many certificates [have] expired, and substantially all valid certificates show D-E ratings."

EPC is an energy performance certificate.

On Wednesday, law firm Harcus Parker said it would be leading a case to establish whether Home REIT had indeed misled shareholders, including in relation to its social impact.

The company initially told shareholders it was investing in "high-quality homeless accommodation".

However, Harcus Parker said that public evidence proved Home REIT properties "have been found by local authorities to be unsuitable for housing vulnerable individuals".

Many of these properties were denied "exempt accommodation" status under housing benefit rules, while others were advertised on websites like Zoopla and Spare Room, rather than to vulnerable individuals.

Harcus Parker added that not all of the registered charities, housing associations and other organisations Home REIT leases its properties to have "robust financials", or a "proven long-term operating track record across a diverse range of homeless sub-sectors and locations".

The law firm is also seeking compensation for investors in relation to significant losses on their investments. Home REIT’s share price has fallen by more than 50% in the year to date.

"Companies that are profiteering from the social housing crisis at the expense of the vulnerable and homeless should be held to account," said Jenny Morrissey, a partner at Harcus Parker.

"The significant drop in the share price provides stark evidence as to the loss suffered by investors, and we are therefore in a position to bring a claim on behalf of shareholders who have suffered damage."

Harcus Parker has instructed a barrister, Sebastian Isaac KC of One Essex Court, to prepare the claim on behalf of investors.

Home REIT shares closed 1.8% lower at 50.10 pence each in London on Wednesday. The stock has fallen 40% in the last month alone.

By Holly Beveridge; Alliance News reporter

Comments and questions to newsroom@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Home REIT Ord 38.05 GBX -1.81 -

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