REG - Home REIT PLC - Monthly Update

Home ReitAnnouncement

14/10/2024 07:00

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RNS Number : 9675H  Home REIT PLC  14 October 2024

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14 October 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 September
2024.

Monthly Summary

·    As announced on 30 September 2024, 201 properties exchanged for sale
at auction for a total of £36.9m. The gross proceeds were 4.8% above the
draft August 2023 values.

·      Repayment of £21.8m of debt was made to the Company's lender in
September comprising a cash repayment of £19.5m and net break gains of £2.3m
applied to loan principal. Total borrowings were reduced to £72.0m as at 30
September 2024.

·      Total gross income received for the month was £1.1m.

·      The Company's audited results for the year ended 31 August 2022
were published on 11 October 2024.

 

Cessation of future monthly updates

The Company introduced monthly updates to provide greater information to
shareholders during the 'Stabilisation Period' which followed the adoption of
a revised investment policy on 21 August 2023, however, this position has now
changed with the subsequent adoption of a Managed Wind-Down strategy on 16
September 2024. The Company will continue to provide updates to shareholders
through the Managed Wind-Down, but this will be driven by events (such as in
respect of material disposals and consequential reductions in borrowings)
rather than part of a fixed monthly timetable.

 

Portfolio and Financial Highlights

 Financial Position (Unaudited)                                  As at                 As at

                                                                 31 August 2023        30th September 2024
 Valuation:
 Draft August 2023 Valuation                                     £412.9m               £238.0m(1)

 Number of properties                                            2,473                 1,263
 Cash and Borrowings:
 Unrestricted Cash                                               £0.8m                 £7.6m
 Total Cash                                                      £13.5m                £19.2m
 Borrowings                                                      £220.0m               £72.0m
 Net debt                                                        £206.5m               £52.7m
 Income:
 Annual Contracted Operating Lease Rent                          £53.9m                £12.7m
 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 September 2024 to 30 September 2024

                                                                 30 September 2024
 Investment Activity:
 Properties sold in the period                                   £164.0m               £16.5m
 Number of properties sold in period                             1,210                 112
 Properties exchanged in period/not yet completed                £52.7m                £36.9m
 Number of properties exchanged not yet completed at period end  282                   201(4)
 Rent Collection:
 Operating lease rent collection                                 £4.6m                 £0.5m
 Operating lease rent collection(5) %                            12%                   46%
 Management agreement income collection                          £3.1m                 £0.6m(6)
 Total income collected                                          £7.7m                 £1.1m

(1) Proforma value at 30 September 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)Two properties were sold as one lot in the Auction.

(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 ASTs.

 

 

 

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, 112 properties completed during September for   a total of £16.5m.

·      As announced on 30 September 2024, 201 properties exchanged for
sale at auction for a total of £36.9m.

·   Since August 2023, the Company has completed on the sale of 1,210
properties and exchanged on a further 282 properties. The gross proceeds from
properties sold and exchanged totals £216.7m, which in aggregate is in line
with the September 2023 draft valuation.

Financial Position and Related Matters

·     The Company had a cash balance of £19.2m as at 30 September 2024
of which £7.6m is unrestricted.

·     The Company repaid £21.8m of debt to the Company's lender in
September comprising a cash repayment of £19.5m and a net break gain of
£2.3m also being applied in repayment of the debt. A total of £148.0m of
debt has been repaid since the Company entered the stabilisation in August
2023.

·   As at 30 September 2024, the Company has total borrowings of £72.0m,
comprising of an 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 were
published on 11 October 2024.

·    The audited results for the year ended 31 August 2023, along with the
interim results for the periods to 28 February 2023 and 29 February 2024
respectively, have been prepared in parallel (the "Historical Accounts"). The
Group intends to publish Historical Accounts before the end of 2024 and the
audited annual results for the year ended 31 August 2024 will follow as soon
as is practicable thereafter. 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

·    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 September was
£0.5m, representing 46% 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 September from
properties under management agreements was £0.6m. The income reported is
gross income and includes arrears from underlying occupier tenants on private
rented ASTs.

·      Total income collected for the month of September was £1.1m.

 

Portfolio and tenant breakdown

 Geographic Region         Number  of Properties   Number of Properties (%)

 As at 30 September 2024
 North West                306                     24.2%
 North East                302                     23.9%
 Yorkshire and the Humber  166                     13.1%
 East Midlands             135                     10.7%
 West Midlands             125                     9.9%
 South West                80                      6.3%
 London                    69                      5.5%
 South East                51                      4.0%
 East of England           18                      1.5%
 Wales                     11                      0.9%
 Total                     1,263                   100.0%

 

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

 As at 30 September 2024
  One (Housing & Support) CIC(1)           109                   32.3%
  LTG Vision CIC                           171                   15.7%
  Mears Ltd                                177                   15.1%
  Community Restore CIC                    46                    7.9%
  Lifeline (NW) CIC                        19                    4.7%
  Complete Homes NW CIC(1)                 4                     4.3%
  Concept Housing Association CIC          20                    4.3%
  Marigold Housing(1)                      15                    3.3%
  Elemel 2018 Community Interest Company   6                     3.2%
  Bloom Social Housing CIC                 8                     2.1%
 Total                                     575                   92.9%

(1) In liquidation or administration. Tenants in liquidation (One (Housing
& Support) CIC, Complete Homes NW CIC, Supportive Homes CIC, Ashwood
Housing Solutions CIC and Marigold Housing) account for 41% of the annual
contracted rent as at 30 September 2024.

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