TORONTO, Sept. 30, 2019 /CNW/ - European Residential
Real Estate Investment Trust (TSX-V:ERE.UN, "ERES") and
Canadian Apartment Properties Real Estate Investment Trust
(TSX:CAR.UN, "CAPREIT") are pleased to announce the closing
of the previously announced acquisition by ERES from CAPREIT (the
"Eagle Acquisition") of a portfolio comprised of 18
properties, representing an aggregate of 942 residential suites in
seven urban centres in the
Netherlands (the "Eagle Portfolio"), as more
particularly described in ERES' prospectus supplement dated
September 17, 2019 (the
"Prospectus Supplement"). Further, ERES is pleased to
announce the closing of the previously announced acquisition by
ERES from an arm's-length institutional owner based in the Netherlands (the "Additional
Acquisition" and together with the Eagle Acquisition, the
"Acquisitions") of a portfolio comprised of 16 properties,
representing an aggregate of 315 residential suites in eight
municipalities in the Netherlands
(the "Additional Portfolio"), also as more particularly
described in the Prospectus Supplement.
The approximately €170.5 million (including transaction costs)
purchase price for the Eagle Portfolio, which is subject to certain
post-closing purchase price adjustments, was satisfied by a
combination of:
(i)
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approximately €68.6
million in cash raised pursuant to ERES' recently closed equity
offering (the "ERESOffering");
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(ii)
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a bridge promissory
note (the "ERES Promissory Note") provided by ERES Limited
Partnership ("ERES LP"), a subsidiary of ERES, to CAPREIT in
the principal amount of €98.5 million carrying an interest rate of
1.35% per annum with a six-month term to maturity, which ERES can
repay without penalty at any time and intends to replace with
mortgage financing expected to be provided by a third-party lender
for a seven-year term and at a stated interest rate that
approximates the ERES Promissory Note; and
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(iii)
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the issuance of
1,137,139 class B limited partnership units of ERES LP (the
"Class B LP Units") to CAPREIT at $4.40 per Class B LP Unit.
The Class B LP Units are convertible on a one-to-one basis into
trust units of ERES (the "Units")
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The approximately €64.8 million (including transaction costs)
purchase price for the Additional Portfolio was satisfied by a
combination of:
(i)
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approximately €11.0
million in cash raised pursuant to the ERES Offering;
and
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(ii)
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mortgage funding of
approximately €53.8 million (inclusive of upfront and agent fees)
for a seven-year term at a stated interest rate of 1.45% which
encumbers the Additional Portfolio, as well as an existing
portfolio of ERES which was previously unencumbered
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As a result of the Acquisitions, the value of ERES' investment
properties has increased from approximately €880.9 million, at
June 30, 2019, to over €1.1
billion. ERES' portfolio consists of 5,116 multi-residential
suites in 122 properties and approximately 400,000 square feet of
gross leasable office area in three office properties. ERES' market
capitalization has also increased significantly, with the number of
Units outstanding (including Class B LP Units) increasing from
approximately 158.2 million, at June 30,
2019, to approximately 199.6 million currently (including
Class B LP Units issued for the Eagle Portfolio). Upon completion
of the Acquisitions, ERES' Debt to Gross Book Value ratio will be
approximately 48%, which is within its target Debt to Gross Book
Value range of 45% to 50%.
About ERES
ERES is an unincorporated, open-ended real estate investment
trust. ERES' Units are listed on the TSX-V under the symbol ERE.UN.
ERES is Canada's only
European-focused multi-residential REIT, with an initial focus on
investing in high-quality multi-residential real estate properties
in the Netherlands. ERES owns a
portfolio of 122 multi-residential properties, comprised of 5,116
suites located in the Netherlands,
and owns two office properties in Germany and one office property in
Belgium.
ERES' 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.
About CAPREIT
As one of Canada's largest
residential landlords, CAPREIT is a growth-oriented investment
trust managing 63,478 suites and sites across Canada, the
Netherlands and Ireland. It
owns, directly in Canada and
indirectly in Netherlands through
its investment in ERES, a total of 59,844 residential units,
comprising 48,167 residential suites and 72 manufactured home
communities comprising 11,677 sites located in and near major urban
centres.
CAPREIT's registered and principal business office is located at
11 Church Street, Suite 401, Toronto,
Ontario M5E 1W1.
For more information about CAPREIT, its business and its
investment highlights, please refer to their website at
www.caprent.com or www.capreit.net and our public disclosure, which
can be found under our profile at www.sedar.com.
Cautions Regarding Future Plans and
Forward-Looking Information
Certain statements contained in this press release constitute
forward-looking statements within the meaning of applicable
Canadian securities laws which reflect ERES' 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", "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. Such forward-looking
statements are based on a number of assumptions that may prove to
be incorrect.
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' views as of any date
subsequent to the date of this press release. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on
forward-looking statements.
Investors are cautioned that, except as disclosed in the
Prospectus Supplement, any information released or received with
respect to the Acquisitions may not be accurate or complete and
should not be relied upon.
Neither the TSX-V nor its Regulation Services Provider (as that
term is defined in the policies of the TSX-V) have in no way
passed upon the merits of the Acquisitions and have neither
approved nor disapproved the contents of this news release.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities of ERES.
SOURCE European Residential Real Estate Investment Trust