Home Reit Share Discussion Threads

[essentialinvestor] 05/12/2022 15:14

spec, sent you a PM - no reply needed.

[spectoacc] 05/12/2022 15:11

@wskill - I reckoned 40% of last NAV, less a 20% discount on that number, in a post above.

But depends if there's a viable business model - no confidence in the "charity" lessees due to many of the people behind them, no confidence CapEx was done (EPC point made by others), nor proof maintenance is being kept up with now.

Despite that, HOME isn't geared enough for wipeout - the properties have a value, even if at least some of that value was set by the c.£900m HOME splurged.

[bondholder] 05/12/2022 15:07

It certainly is devastating !

[wskill] 05/12/2022 14:57

There must be some value here but at what price I am thinking less than 50% of the latest so called valuation then we need some sort of discount factored in due to poor quality properties .

[spectoacc] 05/12/2022 14:48

Ha ha nice to see it reference our posts #183 & #184.

Agree it looks more or less right, eg:

"...The obvious corollary of this is that Home REIT shareholders have paid someone 18–42% above the potential cost had the company purchased the properties itself and managed any associated development or refurbishment."

And pointing out that that's the unlevered profit.


Also the point about the contracts with LA's often not being long-term at all - often for individuals (Point 9).

Difficult to read all that and imagine a fresh set of faces would make much difference. The money's been spent. Changes at the operational end need to happen within the lessees.

[74tom] 05/12/2022 14:29

The Boatman Capital piece is spot on in my opinion…

[williamcooper104] 05/12/2022 12:45

Yep; Boatman will likely have a tiny stake, but that doesn't matter, often an activist is speaking out for institutional shareholders who don't want to get hands dirty with a public fight

[hortonpond] 05/12/2022 12:31

Re Boatman Long Position - remember you need to be long to requisition a EGM or to speak / vote at an AGM.

Think basically Boatman saying the board goes or we will make sure it goes. But be aware that the valuation is under the microscope.

[williamcooper104] 05/12/2022 11:24

Nothing wrong with SUPR

[george stobart] 05/12/2022 11:22

HOME must avoid the Attrato management team.

They are even worse than Alvarium and scammy

[williamcooper104] 05/12/2022 11:13

Note - Boatman are long HOME, with a view to increasing their position This might read like a short hit piece; but it's not

[williamcooper104] 05/12/2022 11:12

Good report; and the way forward here Change the external manager, and engage with the public sector to create a sustainable model

[tradez4dayz] 05/12/2022 10:46

Who are boatman? Never heard of them before

[hortonpond] 05/12/2022 10:26

Boatman out with a report on Home REIT today saying board must go. Mention of the work of this thread in the footnotes (footnote 8).

hxxps://theboatmancapital.com/2022/12/05/home-reit-time-to-change-the-board/

[george stobbart] 05/12/2022 07:30

Is Lynne Fennah being investigated by the Met Police for criminal negligence?

The HOME collapse is due to her incompetence.

Lynne Fennah destroyed Empiric shareholders whilst grabbing massive fees

[williamcooper104] 05/12/2022 07:19

I'm struggling to think of a REIT whose share price has collapsed which hasn't been because of high leverage (ok bad assets too - eg shopping centres, but it's the leverage that's the killer) Whatever else we can probably assume that the developers/vendors to HOME didn't overpay, so that ought to give a value floor

[spectoacc] 05/12/2022 06:58

Yes - does the business model work, when the "charities" are often newly set up, by many dubious characters, some also involved in extracting value from HOME via the property co's (that's surely undeniable). And when this end of the housing market is intensely capital-intensive. And when HOME get 1-4% (currently 4%) annual rent increases, which the charities don't from LA payments. And when costs (repair, labour, utilities) have rocketed.

At best, there's gross naivety from HOME Board, Alvarium, BDO, Knight Frank. Find it hard to believe any/all are doing something dodgy, but then couldn't you say the same about every corporate collapse?

Not that HOME needs be a collapse - it has assets, not too much debt.

[williamcooper104] 04/12/2022 17:30

Don't really care about NAV - it'll be written down 5-15 percent - doesn't really tell us anything - unless we get more clarity through it on likelihood of leases being restructured/extent of over-renting Current share price has discontinued that; so it's really all about IMO - are the properties fit for purpose; or is there a massive capex liabilityBDO will be freaking out; but there's still not that many issues to work through

[tradez4dayz] 04/12/2022 17:10

For me the only issue left is the valuation.The pre funding for leases was disclosed jb the prospectus. I think as specto says if its 1 happy days but 2 is the issue. We need clarity on nav.The other issues are all just noise and detracting from the issues. I rate alvarium and what they have done on lxi and home. They are a huge wealth manager they aren't going to be bothered doing a ponzi scheme. BDO as all accountants will be spooked by these allegations and spend weeks with their knickers in a twist, I don't think the delay is a warning sign just auditors with layers of useless governance

[williamcooper104] 04/12/2022 15:52

With such shabbiness it's hard not to reach for malevolent explanations - though personally on Alveriums part I think it's more likely driven by getting AUM up as quick as possible; spend equity and get to the next equity raise - it's remarkable how quickly they raised and deployed capital One question that kept getting asked was would the BoD sue VR The BoD ought to consider having a go at Alvarium - whether the rents are over-rented is going to be hard to substantiate - but if the refurbs didn't happen and Alvarium didn't do the most basic checks then that looks like basic negligence, and would be very easy to prove fault and damages

[williamcooper104] 04/12/2022 15:44

As it's 31 August; it's going to be easy to argue that the yields hadn't really moved much But of course if the properties haven't been refurbished then that would hit values as at 31 August The only explanation I can think of for quick timing between buying and flip to HOME is that the refurbs were started when the vendor bought, and then finished whilst HOME owned the properties - but then how come HOME hasn't a clue for most of its assets what was actually spent??? Also a rolling refurb while the properties are partially occupied!!!

[spectoacc] 04/12/2022 15:37

The conclusion has to be that they've done it this way (kept the initial purchasing at arms-length) to enable the "bung" (the 12 month rent equivalent paid to the new charity) to be hidden and off HOME's books.

Without VR & Circle's admin, would we ever have known?

Yet the cost to shareholders has been a multiple of that - massive profits to those doing the middlemanning.

[williamcooper104] 04/12/2022 15:34

Actually it's nuts Alverium could legitimately charge a development management fee on all capex (3.5-5%) and then sub-contract out the project management taking a decent profit for themselves That would be win/win - more fees for Alvarium, and development profits for HOME The - it's too difficult argument - nope it's not - it takes too long - nope didn't take the vendors long at all to build up portfolios

[spectoacc] 04/12/2022 15:30

That they've no idea on refurb is damning, as is the fact some of the flipping happened over weeks, so likely no refurbs whatsoever.

The only get-out for what are often comical valuations on purchase (and upgraded once on the books!) are:

(a) The valuations aren't in as what they paid, perhaps in as what they paid less the 12 month rent gift to the lessees? But how does that tie in with where the NAV is now? Seems too high.

(b) The valuations are based mainly on the income stream/long lease, which is the more likely.


If it is (b), they're stuffed - many of the lessees are ridiculously dubious IMO. HOME claim their rent is only 45% of the LA payments, but with the 1-4% annual increase, rocketing utility bills, voids, loads of repairs/maintenance, and bizarrely under-capitalised new charities (bizarre because, didn't they all get a year of rent up front?), the notion 25-30 year leases is laughable. Only the "bung" keeps the show on the road.

But I'm going over the same ground. Yes - the accounts will be interesting, BDO have had some shockers and will want to avoid another. Perhaps a 20p NAV mark-down and a "nothing more to see".

[williamcooper104] 04/12/2022 15:29

Note that KN haven't viewed any of the properties Have Alvarium/QS working for????? Given that the properties would have been let up/partially let up by sub-tenants, and a lot of properties were bought quickly; my guess is they probably haven't Cannot see any reason why HOME can't assemble/refurbish properties themselves/pay an external developer a DM fee to do so