European Residential closes property sales

Executive Summary

• European Residential Real Estate Investment Trust (ERE) has closed on the sale of its commercial properties in Brussels, Belgium, and Landshut, Germany, and the residential suites in the Netherlands, generating significant net proceeds.
• The Board of Trustees declared a special cash distribution of 0.90 euros per unit (approx. $1.46 CAD) to unitholders, payable on September 25, 2025, funded by the proceeds from these dispositions.
• Concurrently, the REIT has ceased its regular monthly cash distributions, citing the disposition of approximately two-thirds of its portfolio and the ongoing strategy to maximize returns through further asset sales.

Key Details

• Netherlands Disposition: Closed on the disposition of entities owning 1,446 residential suites in the Netherlands.
  • Net Proceeds: Approximately 336 million euros (net of deferred taxes and other adjustments).
• Belgium Disposition: Closed on the sale of commercial property in Brussels, Belgium.
• Germany Disposition: Closed on the sale of commercial property in Landshut, Germany.
  • Gross Proceeds: Approximately 31 million euros.
• Special Distribution Details:
  • Amount: 0.90 euros per unit.
  • Record Date: September 22, 2025.
  • Payment Date: September 25, 2025.
  • Currency: Paid in Canadian dollars based on the exchange rate on the payment date (estimated at $1.46 CAD/unit based on Sept 12 rate of 1.62). Registered unitholders may elect to receive in euros; beneficial unitholders receive CAD.
  • Tax Characterization (Canada): Estimated 55-70% Return of Capital, 30-40% Capital Gain, and 0-5% Ordinary Income.
• Cessation of Monthly Distributions:
  • The regular monthly cash distribution is ceased effective immediately following the final regular distribution.
  • Final Regular Distribution: 0.809 Canadian cents per unit.
  • Record Date for Final Regular Distribution: August 29, 2025.
  • Payment Date for Final Regular Distribution: September 12, 2025 (stated as "expected today" in the release).
• Future Sale Process:
  • The REIT is continuing to work with advisers to sell the remaining portfolio.
  • Potential alternatives include additional individual asset dispositions or a larger portfolio disposition.
  • One additional 110-suite property in Rotterdam is expected to close by the end of September 2025.
  • Proceeds from future sales will be distributed to unitholders after deducting costs, taxes, and wind-up expenses.
• Portfolio Status (Pro Forma):
  • As of June 30, 2025, the REIT owned 2,592 residential suites (1,556 classified as held for sale) and ancillary retail space in the Netherlands, plus commercial properties in Germany and Belgium.
  • Total fair value was approximately 709.8 million euros (including ~366.0 million euros of assets held for sale).

Notable Quotes

• "The REIT has made the decision in line with its commitment to maximize returns for unitholders, with a view to executing on this objective through its value-surfacing disposition strategy and prudent financial management." (Regarding the cessation of monthly distributions)