Home REIT faces High Court claims from over 800 shareholders

More than 800 current and former shareholders of Home REIT have initiated High Court proceedings against the property firm and its directors. The investors are seeking compensation for losses they attribute to misleading statements and omissions regarding the company’s business model and property portfolio. The legal action also names former investment adviser Alvarium Home REIT Advisors and former alternative fund manager Alvarium Fund Managers, alongside other individuals involved with the company.

The claims include statutory securities allegations concerning misleading reports and accounts, as well as accusations of deceit and negligent misrepresentation. The investors contend that the housing firm presented a distorted view of the security of its rental income, the quality of the tenant experience, and the valuation of its assets. These factors were described as fundamental to their decision to invest. During its first three years, Home REIT raised over 850 million pounds from investors. The company stated that capital would be used to acquire accommodation for vulnerable and homeless people while generating returns from rental income. Shareholders were further informed that properties would be leased on long-term agreements to organisations providing such accommodation, with rental income supported by government-funded housing benefit.

Nate Barber, a partner at Harcus Parker and the lead lawyer for the claim, stated that the information provided to investors did not reflect reality. He noted that the allegations concern the security of the firm’s income, the financial strength of its tenants, its stated social impact, and the acquisition, use and valuation of its property portfolio. Home REIT, which floated in 2020, has faced a series of crises since the end of 2022. This period began when short seller Viceroy Research published a report questioning the make-up of its tenants. Subsequent reporting in 2023 revealed that several major tenants had collapsed, forcing the company to sell parts of its portfolio to raise cash and settle debts.

Shares in the business were suspended in January 2023 after it failed to publish annual accounts by a regulatory deadline. It was also discovered that some properties were marketed to students and holiday makers. The Serious Fraud Office launched a major investigation into the firm’s past management earlier this year, identifying up to 300 million pounds in suspected fraud and bribery. A series of raids and arrests were conducted in January, with searches carried out at properties in Maidenhead, Altrincham and London. Barber added that the company’s property portfolio has since been sold and its four wholly owned subsidiaries are in liquidation. He asserted that investors who were misled are entitled to seek compensation from those responsible. Home REIT said it noted the announcement and would not comment further, adding that an announcement would be made at an appropriate time.