European Residential REIT Announces Strong Third Quarter 2021 Results TORONTO, Nov. 04, 2021 (GLOBE NEWSWIRE) -- European Residential Real Estate Investment Trust ("ERES" or the "REIT") (TSX: ERE.UN) announced today its results for the three and nine months ended September 30, 2021. ERES’s unaudited consolidated financial statements and management's discussion and analysis ("MD&A") for the three and nine months ended September 30, 2021 can be found at www.eresreit.com or under ERES's profile at www.sedar.com . HIGHLIGHTS Business Update On June 30, 2021, the REIT closed on two acquisitions in the Netherlands for a combined purchase price of €47.0 million (excluding transaction costs and fees), representing an aggregate 137 residential units. On September 29, 2021, the REIT secured mortgage financing on its June 30, 2021 acquisition properties, combined with refinancing of certain existing properties, in the total principal amount of €91.75 million, bearing a six-year term to maturity with a weighted average interest rate of 1.12% over the term of the mortgage. This lowered the REIT's weighted average effective interest rate to 1.53%. On March 10, 2021, the REIT extended its €165 million Pipeline Agreement with CAPREIT for an additional two-year period ending on March 29, 2023, under the same terms and conditions. On February 23, 2021, the Board of Trustees approved an increase of 4.8% to the REIT's monthly distribution from its previous rate of €0.00875 per Unit (equivalent to €0.105 per Unit annualized) to €0.00917 per Unit (equivalent to €0.110 per Unit annualized). Outperforming Operating Metrics Strong operating results continued for the three months ended September 30, 2021, fueled by accretive acquisitions and ongoing strong rental growth, with a 3.6% increase in stabilized Occupied Average Monthly Rent ("AMR"), from €895 as at September 30, 2020, to €927 as at September 30, 2021. Turnover was 3.5% for the three months ended September 30, 2021, with rental uplift on turnover of 16.3% for the period, compared to turnover of 3.2% and rental uplift on turnover of 8.2% in the comparable prior year period. Occupancy for commercial properties remained stable at 100.0% as at September 30, 2021, while occupancy for the residential properties also remained strong at 98.2% as at September 30, 2021, compared to 98.4% as at September 30, 2020. A significant proportion of residential vacancy in the current period is due to renovation, which will provide further rental uplifts once the suites are leased out again. Net Operating Income ("NOI") increased by 13% for the three months ended September 30, 2021, primarily driven by contribution from accretive acquisitions as well as the aforementioned higher monthly rents and lower property operating costs as a percentage of revenues, in aggregate supporting a strong increase in NOI margin to 77.9% compared to 75.6% for the three months ended September 30, 2020. Consistent Fair Value Appreciation on Portfolio The fair value of the REIT's property portfolio increased to €1.64 billion as at September 30, 2021, consisting of €1.54 billion in multi-residential properties and €0.10 billion in commercial properties, resulting in a significant gain of €76.9 million for the three months ended September 30, 2021. The increase in market value was driven by steady and strong portfolio fundamentals resulting in a compression of capitalization rates, the successful execution of the REIT's value-adding capital expenditure program and the REIT's exceptional operating metrics, including its continually increasing rental revenues and consistently high occupancy. Accretive Financial Performance FFO per Unit increased significantly by 15% to €0.039 for the three months ended September 30, 2021, compared to €0.034 in the prior year period, predominantly due to the positive impact of accretive acquisitions. AFFO per Unit similarly increased significantly by 13% to €0.034 for the three months ended September 30, 2021, compared to €0.030 in the three months ended September 30, 2020. Distributions Declared per Unit increased by 4.8% to €0.028 for the three months ended September 30, 2021, up from €0.026 in the prior year period, due to an increase in the REIT's monthly distribution effective March 2021 onward. AFFO Payout Ratio was 80.4% for the three months ended September 30, 2021, at the lower end of the REIT's long-term target range and down from 87.6% in the comparative prior year period. Strong Financial Position with Ample Liquidity Liquidity and leverage remain strong, supported by the REIT's staggered mortgage profile with a four-year weighted average term to maturity and a weighted average effective interest rate of 1.53%. The REIT has immediately available liquidity of €98 million as at September 30, 2021, and its total debt to gross book value is 47.2%. Subsequent Events In the subsequent period to November 4, 2021, the REIT's recently acquired newly built property was fully leased at rental levels exceeding the REIT's business plan. On October 1, 2021, the REIT repaid a portion of the draw on its Revolving Credit Facility and Bridge Credit Facility in the amount of €48,200, leaving a balance of €15,223 outstanding on the credit facilities at that time. Subsequently, on October 29, 2021, the REIT amended and renewed its existing Revolving Credit Facility with the same two Canadian chartered banks, providing up to €100,000 for a three-year period ending on October 29, 2024, which resulted in (i) combining the credit facility and bridge facility into one facility; (ii) lower interest rates and fees, (iii) certain modifications to CAPREIT's financial covenants; and (iv) a negative pledge of an unencumbered property pool provided by CAPREIT, such that it represents 1.50x the facility amount of €100,000. On October 29, 2021, the REIT entered into a purchase agreement to acquire a multi-residential property comprised of 63 suites located in Rotterdam, the Netherlands, for a purchase price of €19.1 million (excluding transaction costs and fees). "ERES has proven its ability to consistently deliver both value and growth via operational performance and an accretive strategy that remains robustly successful even in adverse circumstances, as we have repeatedly reaffirmed and evidenced to date," commented Phillip Burns, Chief Executive Officer. "These strong performance fundamentals continue to showcase ERES's value-creation strategy throughout the Netherlands, fueled by a host of attractive opportunities that characterize markets which are very conducive to ERES's operational and strategic initiatives. Ultimately, ERES has and will continue to excel at execution of its strategy, and we remain optimistic about its near term future, and long-run prospects." OPERATING METRICS CONTINUE TO STRENGTHEN Total Portfolio Suite Count Net AMR/ABR Occupied AMR/ABR Occupancy % As at September 30, 2021 2020 2021 2020 AMR 2021 2020 AMR 2021 2020 € € % Change € € % Change Residential Properties 6,183 5,752 912 882 3.4 928 895 3.7 98.2 98.4 Commercial Properties 1 17.6 17.6 — 17.6 17.6 — 100.0 100.0 1 Represen ts 450,911 square fe et of commercial gross leas able area. Stabilized Portfolio Suite Count 1 Net AMR/ABR Occupied AMR/ABR Occupancy % As at September 30, 2021 2020 AMR 2021 2020 AMR 2021 2020 € € % Change € € % Change Residential Properties 5,751 913 882 3.5 927 895 3.6 98.5 98.4 Commercial Properties 2 17.6 17.6 — 17.6 17.6 — 100.0 100.0 1 Represents all properties owned by the REIT continuously since September 30, 2020 , and therefore excludes 9 residential properties (432 suites) acquired in the subsequent period to date. 2 Represents 450,911 square feet of commercial gross leasable area. Net and Occupied AMR for the total multi-residential portfolio increased by 3.4% and 3.7%, respectively, while Net and Occupied AMR for the stabilized portfolio increased by 3.5% and 3.6%, respectively, compared to the prior year period. The increases were driven by increased rents on annual indexation, turnover and conversion of regulated suites to liberalized suites. Weighted Average Turnovers 2021 2020 Change in Monthly Rent Turnovers Change in Monthly Rent Turnovers € % % € % % For the three months ended September 30, 137 16.3 3.5 71 8.2 3.2 For the nine months ended September 30, 129 15.5 10.9 79 9.1 10.8 Total Portfolio Performance Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Operating Revenues (000s) € 19,277 € 17,562 € 56,843 € 51,863 NOI (000s) € 15,015 € 13,269 € 43,878 € 39,378 NOI Margin 77.9 % 75.6 % 77.2 % 75.9 % Weighted Average Number of Suites 6,184 5,671 6,094 5,645 Operating revenues increased by 10% for both the three and nine months ended September 30, 2021, primarily due to accretive acquisitions since the prior year periods and an increase in AMR on the stabilized portfolio, as described above. NOI increased by 13% and 11% for three and nine months ended September 30, 2021, respectively, likewise driven by contribution from acquisitions since the prior year periods as well as higher monthly rents on stabilized properties. This was complemented by a decrease in property operating costs as a percentage of operating revenues, predominantly due to the recognition of a non-recurring rebate from the government for landlord levies. In aggregate, total portfolio NOI margin increased to 77.9% and 77.2% for the three and nine months ended September 30, 2021, compared to 75.6% and 75.9% in the comparable prior year periods. Excluding the impact of the landlord levy rebate, NOI margin on the total portfolio still increased to 77.1% and 76.4% for the three and nine months ended September 30, 2021, respectively. Stabilized Portfolio Performance Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Operating Revenues (000s) € 17,877 € 17,449 € 53,400 € 51,648 NOI (000s) € 13,939 € 13,185 € 41,201 € 39,270 NOI Margin 78.0 % 75.6 % 77.2 % 76.0 % Stabilized Number of Suites 1 5,631 5,631 5,631 5,631 1 Includes all properties owned by the REIT continu ously since December 31, 2019, and therefore does not take into account the impact of acquisitions or dispositions completed durin g 2020 or 2021. The increases in stabilized NOI contribution by 5.7% and 4.9% for the three and nine months ended September 30, 2021, compared to the prior year periods, were primarily driven by higher operating revenues from increased AMR, as well as a reduction in operating expenses as a percentage of operating revenues, predominantly due to the recognition of the landlord levy rebate. Excluding the impact of the landlord levy rebate, stabilized NOI margin still increased to 77.2% and 76.3% for the three and nine months ended September 30, 2021, respectively. Financial Performance Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 FFO € 8,933 € 7,753 € 25,943 € 23,106 FFO per Unit – Basic € 0.039 € 0.034 € 0.112 € 0.100 FFO payout ratio 71.2 % 78.1