CAPREIT Announces That ERES Has Agreed to Sell Over $1 Billion of European Properties
This news release constitutes a “designated news release” for the purposes of CAPREIT’s prospectus supplement dated February 22, 2024, to its short form base shelf prospectus dated May 9, 2023.
TORONTO, Sept. 16, 2024 (GLOBE NEWSWIRE) -- Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX:CAR.UN) announced today that certain subsidiaries of European Residential Real Estate Investment Trust (TSX:ERE.UN) (“ERES”) have entered into agreements to sell 3,179 residential suites in the Netherlands (the “Residential Dispositions”) and have closed on the disposition of one commercial building in Germany for aggregate proceeds, net of certain adjustments, of approximately $1.1 billion. Amounts disclosed herein exclude transaction costs and other customary adjustments, and are presented in Canadian dollars based on a Euro foreign exchange rate of 1.51 on September 13, 2024.
In connection with the Residential Dispositions, ERES announced that a portion of the net proceeds from the sales are expected to be used to fund the payment of a special cash distribution of an estimated $1.13 per ERES Unit and ERES Limited Partnership’s exchangeable Class B LP Unit (together, the “ERES Units”), payable to holders of the ERES Units of record at a date to be determined (the “Special Distribution”, and together with the Residential Dispositions, the “Transactions”). Based on CAPREIT’s effective interest in ERES of approximately 65%, CAPREIT expects to receive approximately $172 million from the Special Distribution following the closing of the Residential Dispositions.
In connection with and following completion of the Residential Dispositions, ERES also announced that it intends to reduce its monthly rate of distribution by approximately 50%.
The Residential Dispositions are in part subject to compliance with the Dutch Competition Act, as well as other closing conditions. Subject to the receipt of all regulatory approvals and satisfaction of closing conditions for each of the Residential Dispositions, ERES announced that closings are anticipated by, or before, early Q1 2025. There can be no assurance that all conditions of closing will be obtained, satisfied or waived. Further details of the Transactions have been provided by ERES in its press release dated September 16, 2024.