REG - Home REIT PLC - Surrender of leases and transfer of sub-leases

Home ReitAnnouncement

22/09/2023 07:00

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RNS Number : 2794N  Home REIT PLC  22 September 2023

FOR IMMEDIATE RELEASE

 

22 September 2023

Home REIT plc

 

("Home REIT" or the "Company")

 

Surrender of leases and transfer of sub-leases

Further to its announcement on 2 August 2023 regarding Redemption Project CIC
("Redemption") entering into creditors voluntary liquidation, the Company now
announces that Redemption has agreed to surrender its leases on 146 properties
(the "Properties") equating to c.6% of the Company's portfolio by number of
properties. Redemption has not paid rent to the Company for 2023.

 

Mears Limited, guaranteed by Mears Group PLC, the housing and social care
provider, has been occupying 77 of the Properties on sub-leases from
Redemption. These sub-leases will now transfer to Home REIT, with Mears
Limited becoming a direct tenant for the remaining lease term of 8 years with
an initial contracted rental income of £732,720 per annum. The annual
contracted rent due from Redemption for these 77 properties was £1,139,151 as
at 31 August 2023.

 

The surrender agreement allows the Company to receive a sustainable income
stream from a strong tenant covenant and is expected to generate higher rent
collection than has previously been received from Redemption in relation to
the Properties. Following the transaction, the Company's direct exposure to
Mears Limited increases to 177 properties and £1,623,875 million per annum of
contracted rent.

 

For the remaining 69 properties, the Company has agreed flexible leases with
the Community Accommodation Group, a Charitable Incorporated Organisation and
a provider of social housing and care, for a term for 5 years and appointed
Myshon Limited, a specialist intensive housing manager with a specific focus
on specialist supported housing, supported housing and affordable housing, to
manage the properties, also on a flexible agreement. Myshon Limited was
previously providing management services in relation to the properties and
thus retaining continuity of service will limit any disruption to existing
occupants and support services.

 

This transaction completely removes the Company's exposure to Redemption,
which accounted for 11% of the Company's annual contracted rent as at 31
August 2023.

 

The transaction is in line with AEW's strategy as Investment Manager to
stabilise the Company's portfolio and allows AEW to carry out further asset
management initiatives as soon as possible with the aim of improving rent
collection. The current occupiers of the Properties will not be impacted as a
result of this transaction.

 

The person responsible for arranging the release of this announcement on
behalf of the Company is FTI Consulting.

 

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

 FTI Consulting (Communications Adviser)  HomeREIT@fticonsulting.com

 Dido Laurimore                           +44 (0)20 3727 1000

 Eve Kirmatzis

 Ellie Perham-Marchant

 Oliver Harrison

 

The Company's LEI is: 213800A53AOVH3FCGG44.

 

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

 

 

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