ERE.UN European Residetial Real Estate Investment Trust

/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/

TORONTO, Dec. 18, 2019 /CNW/ - European Residential Real Estate Investment Trust (TSX-V:ERE.UN, "ERES") announced today that it has closed its previously announced issue and sale of 30,915,400 trust units (the "Units") at a price of C$4.65 per Unit for aggregate gross proceeds of C$143,756,610 (the "Offering"), which includes the exercise in full of the over-allotment option. The Offering was sold through a syndicate of underwriters led by RBC Capital Markets on a bought-deal basis. Additionally, ERES announced the closing of its previously announced acquisition of a Netherlands property (the "Kameleon Property") for approximately €105 million (excluding transaction costs and other adjustments).

The Kameleon Property is a 17-storey property, consisting of 222 residential suites, approximately 9,900 square meters of ancillary retail space and 432 indoor parking spaces.  The property, which was built in 2012, is located in southeast Amsterdam, in close proximity to the city centre and has direct access to the city's extensive train network.

The acquisition of the Kameleon Property, which closed on December 16, 2019, was financed with: (i) a promissory note issued to CAPREIT (the "CAPREIT Promissory Note") in the principal amount of approximately €37 million; (ii) a draw on ERES's existing credit facility of approximately €20 million and (iii) a €50 million draw on a new one-year €50 million credit facility that ERES entered into with two Canadian chartered banks (the "New Credit Facility").

ERES intends to use the net proceeds of the Offering:

The Kameleon Property, the New Credit Facility, and the CAPREIT Promissory Note are described in more detail in ERES's press release dated December 9, 2019.

CAPREIT purchased 5,377,000 Units as a part the Offering, representing approximately C$25 million.  As a result, CAPREIT now holds an approximately 66% effective interest in ERES through its ownership of 10,197,000 Units and 142,040,821 class B limited partnership units of ERES Limited Partnership (the "Class B LP Units"), a subsidiary of ERES (assuming all the Class B LP Units are converted into trust units).  The Class B LP Units are convertible on a one-to-one basis into Units. Immediately before the completion of the Offering, CAPREIT owned, controlled or exercised direction over 142,040,821 Class B LP Units and 4,820,000 Units, representing approximately 74% of the then issued and outstanding Units and Class B LP Units.

As a result of the acquisition of the Kameleon Property and the closing of the Offering, ERES's total assets have grown to approximately €1.4 billion and its market capitalization has grown to approximately C$1.1 billion (assuming all the Class B LP Units are converted into Units).

This press release is issued pursuant to the early warning requirements of National Instrument 62-103, which also requires a report to be filed containing additional information with respect to the foregoing matters (the "Early Warning Report"). A copy of the Early Warning Report will appear under ERES's profile on the SEDAR website at www.sedar.com.

ABOUT ERES

ERES is an unincorporated, open-ended real estate investment trust. ERES's 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 currently owns a portfolio of 131 multi-residential properties, comprised of 5,632 suites and ancillary retail space located in the Netherlands, and owns two office properties 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.

ABOUT CAPREIT

Canadian Apartment Properties REIT ("CAPREIT") is one of Canada's largest real estate investment trusts managing approximately 64,000 residential rental apartment and townhouse suites and manufactured home community sites in major urban centres across Canada, the Netherlands, and Ireland. Since its Initial Public Offering in May 1997, CAPREIT has grown monthly cash distributions per Unit by 93%. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.caprent.com or www.capreit.net and our public disclosure at www.sedar.com.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements within the meaning of applicable Canadian securities laws which reflect ERES's current expectations and projections about future results, including but not limited to, the intended use of net proceeds of the Offering. 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. 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's 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 final short form base shelf prospectus of the REIT dated August 19, 2019 (the "Base Shelf Prospectus") or the prospectus supplement to the Base Shelf Prospectus dated December 11, 2019, any information released or received with respect to the Offering or the acquisition of the Kameleon Property 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 Kameleon Property acquisition or the Offering and have neither approved nor disapproved the contents of this news release.

SOURCE European Residential Real Estate Investment Trust