Home REIT gives notice to investment manager ahead of formal wind-down

Home REIT has served its investment manager, AEW, a formal termination notice as it launches cost-cutting measures ahead of its formal wind-down. The termination notice, which is valid for six months, comes as the company is in the process of liquidating all its properties and subsidiaries. In its latest trading update, Home REIT revealed that its board has commenced a search for a more cost-effective fund manager specializing in corporate liquidation.

In response to AEW's contract expiration in April 2027, the company has already reduced its advisory fees from a monthly rate of £480,000 to £120,000. The fees will further decrease to £42,000 per month from January 2027. The board aims to slash costs from £4.7m per year to between £2.5m and £2m per year. Home REIT's share price plummeted after it was hit by a damning report from short-seller Viceroy Research in late 2022, which exposed concerns about the quality of its tenant base.

The firm's shares were suspended following the company's failure to publish its annual accounts in the wake of Viceroy's allegations. Despite the legal battle, the company has disposed of 853 property assets, generating £138.8m, and is planning to return capital to shareholders. However, the Serious Fraud Office is still investigating the firm, and over 800 former shareholders have brought High Court proceedings against the company, alleging misleading statements and omissions about its business model and portfolio.

Despite these challenges, Home REIT has decided to retain its listing on the London Stock Exchange, stating that savings from listing fees were not significant enough to trigger cancellation of shares or going private.