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REIT cuts ties with lessee after rent problems
Triple Point, the social housing real estate investment trust (REIT), has effectively ended its relationship with one of its lessees with the transfer of 38 properties to another provider.
REIT cuts ties with lessee after rent problems #UKhousingA social housing real estate investment trust has effectively ended its relationship with one of its lessees with the transfer of 38 properties to another provider #UKhousingThe transfer from Parasol Homes to Westmoreland Supported Housing was finalised on Monday, the listed firm said in a filing.
Triple Point first announced plans for the transfer in May after it emerged that Parasol had missed rent payments in the second half of 2022.
Watford-based Parasol, which operates specialised supported housing, represented 9.7% of the REIT’s rent roll. Parasol was found non-compliant with the English regulator’s standards in 2021.
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Triple Point said that up until the transfer, Parasol had “continued to pay rent in accordance with the existing creditor’s agreement, being 60% of full lease rent”.
The REIT said it now expects rent collection to increase to between 75% to 85% of existing full repairing and insuring (FRI) leases during “an initial stabilisation period” of around 12 months, then up to 90% after that.
Westmoreland, which manages 950 specialised supported housing homes, is also non-compliant with the Regulator of Social Housing (RSH)’s standards with grades of G4/V3 for governance and financial viability.
It was handed a G4 in 2019 after temporarily entering the regulator’s insolvency process. The provider was also found non-compliant with the RSH’s Rent Standard in 2020.
In its filing, Triple Point said that Westmoreland’s current management team was appointed in 2020 and has “successfully restructured” the provider.
Chris Phillips, chair of Triple Point, said: “Having successfully completed the transfer of properties, we look forward to working closely with Westmoreland to ensure that rent collection is increased and good services continue to be delivered to the properties’ residents.”
Steve Fensom, chief executive of Westmoreland, said he was “delighted” the transfer had been confirmed.
He added: “The transfer has been undertaken following an extensive period of preparation and detailed consultation with customers and other stakeholders.
“It supports Westmoreland’s strategic aims and represents another significant step forward in our journey back to full regulatory compliance.”
Specialised supported housing is a type of exempt accommodation that has become popular with lease-based providers. The sub-sector has been dogged by controversy in recent years.
Earlier this month, Fitch Ratings downgraded its long-term outlook on Triple Point to negative due to “prolonged rent arrears” involving Parasol and another of its non-compliant lessees, My Space.
Parasol has been contacted for comment.
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