REG - Home REIT PLC - Monthly Update

Home ReitAnnouncement

05/09/2024 07:00

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RNS Number : 9725C  Home REIT PLC  05 September 2024

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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 September 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 August
2024.

Monthly Summary

·    As announced on 30 August 2024, 101 properties exchanged for sale at
auction for a total of £18.5m at auctions held over the previous two days.
The gross proceeds were 4.8% above the draft August 2023 values.

·    Repayment of £12.2m of debt was made to the Company's lender in
August comprising a cash repayment of £10.7m and net break gains of £1.5m
applied to loan principal. Total borrowings were reduced to £93.8m as at 31
August 2024.

·    Total gross income received for the month was £1.0m.

·    The Company's audited results for the year ended 31 August 2022 ("FY22
Audit") are expected to be published shortly.

Portfolio and Financial Highlights

 Financial Position (Unaudited)                                  As at                 As at

                                                                 31 August 2023        31st August 2024
 Valuation:
 Draft August 2023 Valuation                                     £412.9m               £254.3m(1)

 Number of properties                                            2,473                 1,375
 Cash and Borrowings:
 Unrestricted Cash                                               £0.8m                 £6.2m
 Total Cash                                                      £13.5m                £21.4m
 Borrowings                                                      £220.0m               £93.8m
 Net debt                                                        £206.5m               £72.5m
 Income:
 Annual Contracted Operating Lease Rent                          £53.9m                £12.6m
 Tenants (2, 3)                                                  29                    22
 Properties under lease to tenants                               2,358                 682
 Properties under property management agreements                 115                   693

                                                                 To date               Month

                                                                 1 September 2023 to   1 August 2024 to 31 August 2024

                                                                 31 August 2024
 Investment Activity:
 Properties sold in the period(4)                                £147.6m               £18.4m
 Number of properties sold in period(4)                          1,098                 183
 Properties exchanged in period/not yet completed                £32.0m                £18.5m
 Number of properties exchanged not yet completed at period end  203                   101
 Rent Collection:
 Operating lease rent collection                                 £4.1m                 £0.3m
 Operating lease rent collection (5) %                           11%                   25%
 Management agreement income collection                          £2.5m                 £0.7m(6)
 Total income collected                                          £6.6m                 £1.0m
 Inspections:
 Completed (7)                                                   2,144                 -

(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)An additional property was completed in July, due to weekly reporting this
was picked up subsequent to the RNS release.

(5) Rent collection - rent collected including arrears / rent invoiced for the
period

(6) The income reported is gross income and includes arrears for underlying
occupier tenants on private rented ATS.

(7) Inspections - these are of the portfolio held as at 31 August 2023.

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 FTI Consulting (Communications Adviser)  HomeREIT@fticonsulting.com (mailto:HomeREIT@fticonsulting.com)

 Dido Laurimore                           +44 (0)20 3727 1000

 Bryn Woodward

 

The Company's LEI is: 213800A53AOVH3FCGG44.

 

For more information, please visit the Company's website: www.homereituk.com
(http://www.homereituk.com/)

 

Investment Activity

·    Following announcements of exchanges at auction in previous months,
183 properties completed during August for a total of £18.4m.

·    As announced on 30 August 2024, 101 properties exchanged for sale at
auction for a total of £18.5m at auctions held over the previous two days.

·   Since August 2023, the Company has completed on the sale of 1,098
properties and exchanged on a further 203 properties. The gross proceeds from
properties sold and exchanged totals £181.2m, which in aggregate is in line
with the August 2023 draft valuation.

 

Financial Position and Related Matters

·    The Company had a cash balance of £21.4m as at 31 August 2024 of
which £6.2m is unrestricted.

·    The Company repaid £12.2m of debt to the Company's lender in August
comprising a cash repayment of £10.7m and a net break gain of £1.5m also
being applied in repayment of the debt. A total of £126.2m of debt has been
repaid since the Company entered the stabilisation in August 2023.

·   As at 31 August 2024, the Company has total borrowings of £93.8m,
comprising a £3.5m 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 in
2036, with a fixed rate of 2.53%per annum.

·    As mentioned in previous announcements, an additional fee of 5.00%
per annum is being 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 shortly.

·    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
fourth 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

·     Further to the announcement on 8 August 2024, the Company and AEW
continue to work closely with the administrator for One (Housing &
Support) CIC and Myshon Limited to manage the handover of properties.

·    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 August was
£0.3m, representing 25% of the rent invoiced for the period. AEW continues to
work with selected tenants on payment plans and is progressing legal action
against selected non-performing tenants.

·    Total gross income collected for the month of August from properties
under management agreements was £0.7m. The income reported is gross income
and includes arrears from underlying occupier tenants on private rented ASTs.

·     Total income collected for the month of August was £1.0m.

 

General Meeting

 

·    Further to the Company's announcement on 16 July 2024 regarding the
proposed implementation of a managed wind-down, a circular was published on 23
August 2024 and a general meeting has been convened for 16 September 2024.

 

Shareholder Engagement

·    The Board and AEW continue to engage with the Company's shareholders
regularly.

·    The Company will shortly be announcing the timing of the next
shareholder webinar. It is expected that the webinar will follow the
publication of the annual results for the period ending 31 August 2022 and
will provide an opportunity for shareholders to ask questions relating to the
results.

·   Separately, shareholders will be able to ask questions on the managed
wind-down as part of the general meeting to approve this. Should shareholders
wish to ask questions in respect of the matters to be considered at the
general meeting, the Board requests that questions are submitted in advance to
homereitevents@fticonsulting.com.

 

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.

Portfolio and tenant breakdown

 

 Geographic Region         Number  of Properties   Number of Properties (%)

 As at 31 August 2024
 North East                347                     25.2%
 North West                317                     23.1%
 Yorkshire and the Humber  181                     13.2%
 East Midlands             149                     10.8%
 West Midlands             139                     10.1%
 South West                92                      6.7%
 London                    69                      5.0%
 South East                51                      3.7%
 East of England           18                      1.3%
 Wales                     12                      0.9%
 Total                     1,375                   100.0%

 

 Operating Leases - Top 10 Tenants         Number of Properties  % of portfolio annual contracted rent

 As at 31 August 2024
  One (Housing & Support) CIC              109                   32.3%
  LTG Vision CIC                           171                   15.7%
  Mears Ltd                                177                   15.4%
  Community Restore CIC                    46                    7.9%
  Lifeline (NW) CIC                        10                    4.7%
  Complete Homes NW CIC                    4                     4.3%
  Concept Housing Association CIC          20                    4.3%
  Marigold Housing                         15                    3.2%
  Elemel 2018 Community Interest Company   6                     3.1%
  Bloom Social Housing CIC                 8                     2.1%
 Total                                     566                   93.0%

(1) In liquidation or administration. Tenants in liquidation (One (Housing
& Support) CIC, and Marigold Housing) account for 36% % of the annual
contracted rent as at 31 August 2024.

 

 

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