Last checked at 
(Alliance News) - Home REIT PLC on Wednesday confirmed that its tenant, Lotus Sanctuary CIC, has failed to pay rent on difficulties gaining "exempt status" from local authorities.
The London-based real estate investment trust told investors that while Lotus finally paid for the August quarter in October, it has yet to pay rent for the quarter to November 30.
Lotus is a Wolverhampton, England-based company, which provides over 2,000 beds to vulnerable people.
As at August 31, Lotus represented 12% of Home REIT's overall rent roll, providing 939 beds, predominantly to vulnerable women. As at December 31, the company's properties let to Lotus were 55% occupied, inclusive of properties undergoing refurbishment.
Home REIT said it was working constructively with Lotus to solve the operational issues, including through the provision of advice from Simpact Group.
Simpact is a specialist social housing manager, which oversees a housing portfolio across 100 local authorities in England and Wales.
Last week on Thursday, Home REIT said that Simpact had been appointed by its investment adviser, Alvarium Home REIT Advisors Ltd, to accelerate a detailed ongoing review of the company's portfolio.
Simpact is also due to give advice to tenant partners on reducing the approval period for exempt housing benefit applications.
Home REIT on Wednesday said that Lotus is currently struggling to decrease the time delays for these applications.
However, it also noted that payments from local authorities are typically backdated to the initial date of the claim following approval, including the amount due for rent.
Should Lotus not be viable as a going concern, Home REIT intends to assign leases to alternative providers.
Discounting Lotus, the real estate investment trust has already seen a deterioration in its rent collection position over the past month.
On January 12, the company told investors that both Big Help Group and Noble Tree Foundation had disputed their rental obligations, and failed to pay for the three months to November 30.
In its update on Wednesday, Home REIT said that its investment adviser would be establishing the reasons behind this deterioration.
Previously, the company attributed the deterioration to a short-selling report published by Viceroy Research in November.
Described by Home REIT as "inaccurate and misleading", the report accused executives of short-selling.
The law firm Harcus Parker was subsequently appointed in December to lead a case establishing whether Home REIT had misled shareholders, including in relation to its social impact.
The firm said that public evidence proved Home REIT properties "have been found by local authorities to be unsuitable for housing vulnerable individuals".
Home REIT's shares have been temporarily suspended from trading in London, after the company failed to publish its annual financial report for the year ended August 31.
By Holly Beveridge; Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
