Investors file UK lawsuit against social housing firm Home REIT

By Kirstin Ridley

LONDON, Oct 1 (Reuters) - More than 800 investors are suing London-listed Home REIT alleging they were misled about the security of the social housing company's rental income, its financial strength and its stated social impact, their lawyer said on Thursday.

Home REIT, which also faces a £300 million ($396 million) fraud and bribery investigation, declined to comment on the £120 million-plus lawsuit which law firm Harcus Parker said was lodged at London's High Court on Wednesday.

"The company cannot comment any further at this stage and a further announcement will be made at the appropriate time," it said in a statement.

"Home REIT was presented to investors as offering financial returns while helping to tackle homelessness," Harcus Parker partner Nate Barber said.

"Our case is that what investors were told did not reflect the reality," Barber added.

Home REIT's share price plunged in 2022 after activist Viceroy Research raised concerns about its tenants, rental income, property transactions and valuation. 

Home REIT, whose shares were suspended for three years, said at the time that the allegations were "without substance".

The company raised more than £850 million in three years, promising to buy property that would be let to publicly funded charities and community groups to house vulnerable people, while producing rental income.

Its property portfolio has since been sold and its four wholly-owned subsidiaries are in liquidation. Home REIT says on its website that it is in a managed wind-down.

In April, its listing was restored and properties sold. It has forecast significant costs defending the company and former directors from potential shareholder-related litigation.  

The UK Serious Fraud Office opened an investigation into suspected fraud and bribery in January and six people were arrested in Britain and Italy. The Financial Conduct Authority opened an investigation in 2024, the company has said.

($1 = 0.7568 pounds) 

(Reporting by Kirstin Ridley; Editing by Alexander Smith)