ERES Announces Approximately €748 Million in Strategic Dispositions

TORONTO, Sept. 16, 2024 (GLOBE NEWSWIRE) -- European Residential Real Estate Investment Trust (TSX:ERE.UN) (“ERES” or the “REIT”) announced today the following transactions (all amounts disclosed herein exclude transaction costs and other customary adjustments):

1. ERES Limited Partnership (“ERES LP”) and certain other subsidiaries of ERES have entered into an agreement (the “Disposition Agreement”) with an entity owned by a consortium of parties that includes TPG Angelo Gordon, Dream Unlimited Corporation, Stadium Capital Partners, and several co-investment partners (the “Purchaser”), to sell certain entities owning 2,947 residential suites in the Netherlands for proceeds, net of certain estimated adjustments, of approximately €695 million (“Residential Disposition I”).
2. Certain other subsidiaries of ERES have entered into a separate agreement to sell 232 residential suites in the Netherlands for gross proceeds of approximately €44 million (“Residential Disposition II”, and together with Residential Disposition I, the “Residential Dispositions”).
3. ERES’s German subsidiary has also completed the disposition of one commercial building in Germany for gross proceeds of approximately €9 million (the “Commercial Disposition”).
   

Residential Dispositions

The aggregate price for the Residential Dispositions, which represents a premium to previously reported IFRS fair value, will be paid in cash, with proceeds to be used by ERES and its subsidiaries in part to repay approximately €421 million in associated mortgage principal outstanding. The associated mortgages currently have a weighted average term to maturity of approximately 1.9 years, and a weighted average effective interest rate of approximately 2.0%.

Remaining net proceeds from the Residential Dispositions are intended to be used for: (i) the repayment of amounts outstanding on the revolving credit facility; (ii) the prepayment of certain mortgages maturing in the near term; and (iii) the payment of a special cash distribution of an estimated €0.75 per Unit and ERES LP’s exchangeable Class B LP Unit (equivalent to an estimated C$1.13 based on the foreign exchange rate of 1.51 on September 13, 2024) payable to holders of the REIT’s Units and ERES LP’s Class B LP Units (collectively, the “Unitholders”) of record at a date to be determined (the “Special Distribution”, and together with the Residential Dispositions, the “Transactions”).