Home REIT blames adviser for social housing debacle

Scandal ridden Home REIT has blasted its former investment adviser alvarium for trying to hide information on business arrangements.

The property company has been locked in crisis since november when short-selling firm Viceroy Research published a critical report on the business, questioning its accounts and financial stability.

The sheltered housing group’s shares have been suspended since January while the results for last year remain unpublished amid an audit by its accountant BdO.

The debacle has harmed the Home REIT’s reputation following a blockbuster float in 2020 when it touted itself as a socially conscious housing provider.

citing a damning report from forensic accountants alvarez & Marsal, the company said it had uncovered evidence alleging its former adviser alvarium, which cut ties earlier this year, had made little effort to monitor the group’s tenants after they had signed leases.

‘There was limited evidence of detailed ongoing monitoring of tenants being undertaken by the Investment adviser,’ a spokesman for the group said.

Home REIT alleged that alvarium had not alerted its board of directors to agreements made with several corporate tenants and developers regarding refurbishment work on its properties or settlements made over the payment of outstanding rents.

The company said in november it had ‘no overdue arrears’ for rent due before the end of last august.

But the probe had revealed ‘a number of different methods’ it claims were used by alvarium to ‘offset or clear outstanding rent arrears’. This appeared to show payments were being settled in a normal manner but they had not come from ‘sustainable cashflow sources and were not paid or collected in the form of rent.’

Home REIT also claimed that alvarium had provided ‘inaccurate’ information to The Good Economy (TGE), a consultancy that analyses organisations which are looking to boost their sustainability and ethical credentials.

TGE’s report into Home REIT was key to attracting many backers to the firm as it touted its business as offering housing for the most vulnerable in society.

Home Reit said the investigation had also uncovered ‘potential outside business interests and undeclared potential conflicts of interest’ between people linked to alvarium and other parties that had not been flagged to its board of directors.

Following the allegations coming to light, Viceroy Research boss Fraser Perring called on Home REIT to ‘apologise’ for previously branding his firm’s report as ‘baseless and misleading’. He added that yesterday’s announcement on the findings was still ‘lacking transparency’ and was ‘an insult to investors.’ Home REIT and alvarium are also facing the prospect of several lawsuits from disgruntled shareholders.

Jennifer Morrissey, a partner at london law firm Harcus Parker, which is building a case against Home REIT, said the allegations showed the company had ‘misrepresented how it was operating its business and how it was performing’.

‘Shareholders suffered losses because they were presented with a false picture of the state that the properties were in, how much rent was being collected, and how the portfolio was monitored,’ she added. One investor told the Mail the company’s board ‘just need to go’ saying the revelations showed the firm had made several ‘really bad commercial agreements’.

last week, Home REIT announced it had appointed property giant aEW as its investment adviser. It also said it planned to sell part of its portfolio to boost its cash reserves and pay down debt, raising fears that those living in the properties, including domestic abuse victims, could be relocated.

The firm also attracted criticism earlier this month when prospective bidder Bluestar Group walked away from discussions saying the company’s board had refused to engage with proposals.

‘Presented with a false picture’