NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
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 31 August 2023 | As at 30th September 2024 |
| Valuation: |
|
|
| Draft August 2023 Valuation
| £412.9m | £238.0m1 |
| 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 1 September 2023 to 30 September 2024 | Month 1 September 2024 to 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 | 2014 |
| Rent Collection: | | |
| Operating lease rent collection | £4.6m | £0.5m |
| Operating lease rent collection5 % | 12% | 46% |
| Management agreement income collection | £3.1m | £0.6m6 |
| 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
4Two 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) Dido Laurimore Bryn Woodward | +44 (0)20 3727 1000 |
The Company's LEI is: 213800A53AOVH3FCGG44.
For more information, please visit the Company's website: 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 As at 30 September 2024 | Number of Properties | Number of Properties (%) |
| 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 As at 30 September 2024 | Number of Properties | % of portfolio annual contracted rent |
| One (Housing & Support) CIC1 | 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 CIC1 | 4 | 4.3% |
| Concept Housing Association CIC | 20 | 4.3% |
| Marigold Housing1 | 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.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
