TORONTO, Dec. 20, 2023 (GLOBE NEWSWIRE) — European Residential Real Estate Investment Trust (“ERES” or the “REIT”) (TSX: ERE.UN) announced today its Board of Trustees (the “Board”) has concluded the REIT’s strategic review process, first announced on June 16, 2023.
The strategic review involved the evaluation of various value-maximizing alternatives, including, but not limited to, a possible sale of the REIT. Pursuant to this process, a number of transaction proposals were received from potential strategic and financial counterparties. The Board, with assistance from its legal and financial advisors, assessed each proposal and determined that insufficient consideration was offered relative to the intrinsic value of the REIT and the other opportunities currently available for value creation. Accordingly, the Board concluded that under prevailing financial market conditions, proceeding with any of the proposed sale transactions would not be in the best interest of the REIT’s unitholders at this time.
“Following a thorough review and evaluation of each submission, the Board agreed that there was no proposal which achieved the objective of maximizing value,” commented Mark Kenney, Chief Executive Officer. “The bids were impacted by challenging macroeconomic headwinds, including an increasingly difficult financing environment. In light of this, ERES will continue to focus on creating unitholder value through other available avenues, with key strategic and liquidity-enhancing initiatives in place to further improve margins, reduce leverage and strengthen the balance sheet.”
Gina Parvaneh Cody, Chair of the Board, said, “Although the strategic review process has come to an end, the Board, as always, remains committed to maximizing value and will continue to actively assess potential opportunities to enhance unitholder value in the near- and long-term. The Board will remain open to the possibility of a strategic transaction in the future, subject to changing market conditions.”
As one of the leading providers of multi-residential housing in the Netherlands, ERES has deep sector expertise underpinned by a best-in-class operating platform, which has resulted in a consistent track record of robust operational performance. Since inception, the REIT has achieved strong growth in rental revenues while maintaining vacancies at a structural minimum. This reflects the increasingly tight rental market in the Netherlands, driven by unprecedented population growth and chronically undersupplied housing stock. Additionally combined with the REIT’s cost control initiatives alongside its inherent insulation from inflationary pressures, ERES has historically recognized solid margin expansion, and the platform currently produces one of the highest operating margins in its peer universe.
Going forward, the REIT will continue to execute on the core pillars of its proven operational strategy, with a view to advancing the trajectory of its strong organic growth, as it has effectively demonstrated to date. This primary operational program, in conjunction with the REIT’s active debt management and financing objectives, will fortify ERES’s platform and its ability to continue driving value for all unitholders.
ABOUT ERES
ERES is an unincorporated, open-ended real estate investment trust. ERES’s Units are listed on the TSX under the symbol ERE.UN. ERES is Canada’s only European-focused multi-residential REIT, with a current initial focus on investing in high-quality, multi-residential real estate properties in the Netherlands. As at September 30, 2023, ERES owns a portfolio of 158 multi-residential properties, comprised of approximately 6,900 suites and ancillary retail space located in the Netherlands, and owns one office property in Germany and one office property in Belgium.
ERES’s registered and principal business office is located at 11 Church Street, Suite 401, Toronto, Ontario M5E 1W1.
For more information, please visit our website at www.eresreit.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release, including statements with respect to creating unitholder value, key strategic and liquidity-enhancing initiatives, improvements to margins and leverage, strengthening the balance sheet, future market conditions and potential transaction opportunities or initiatives, constitute forward-looking statements within the meaning of applicable Canadian securities laws which reflect ERES’s current expectations and projections about future results. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intent”, “estimate”, “anticipate”, “believe”, “consider”, “should”, “plans”, “predict”, “estimate”, “forward”, “potential”, “could”, “likely”, “approximately”, “scheduled”, “forecast”, “variation” or “continue”, or similar expressions suggesting future outcomes or events. The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Any number of factors could cause actual results to differ materially from these forward-looking statements. Although ERES believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward looking statements in this press release are subject to certain risks and uncertainties that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR+ at www.sedarplus.ca.
Except as specifically required by applicable Canadian securities law, ERES does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. These forward-looking statements should not be relied upon as representing ERES’s views as of any date subsequent to the date of this press release.
| For more information, please contact: | |
| ERES | ERES |
| Mr. Mark Kenney | Ms. Jenny Chou |
| Chief Executive Officer | Chief Financial Officer |
| 416.861.9404 | 416.354.0188 |
| m.kenney@capreit.net | j.chou@capreit.net |
