ERES REIT Kick Starts 2021 Growth With Two Multi-Residential Acquisitions in the Netherlands for Combined €47MM
TORONTO, June 25, 2021 (GLOBE NEWSWIRE) — European Residential Real Estate Investment Trust (TSX:ERE.UN, “ERES” or the “REIT”) announced today that it has entered into purchase agreements to acquire two multi-residential properties in the Netherlands.
The first property, located at the Velperweg, east of the city centre of Arnhem (the “Villa Property”), is comprised of 104 residential units, each with a corresponding parking space, as well as ancillary commercial space. The Villa Property, which is 100% owned and currently 98% leased at an occupied Average Monthly Rent (“AMR”) of €922, will be purchased for €28.5 million (approximately C$41.9 million) (excluding transaction costs and fees). Approximately 97% of the residential units are liberalized, of which the large majority are leased in the mid-market sector and provide potential organic rental growth. Almost all remaining regulated units are eligible for liberalization upon turnover, providing potential for incremental uplift of rents upon conversion.
The Villa Property is well-located at a walking distance of only 10 minutes from the city centre, with excellent proximity to restaurants, local shops, highways and the Velperpoort train station. It is situated near three other properties already owned by ERES throughout Arnhem, allowing for operational synergies with the Villa Property which will be managed by ERES’s existing asset and property manager already established in the region. As it was recently renovated in 2019, the Villa Property is not expected to require significant capital expenditure in the near future.
The second property is a newly built multi-residential property located in Amsterdam (the “De Horizon Property”), comprised of 33 residential units, and will be 100% owned by the REIT. The De Horizon Property will be purchased for €18.48 million (approximately C$27.1 million) (excluding transaction costs and fees).
The De Horizon Property is located in the Oostenburg district of Amsterdam, a growing new neighbourhood within the city centre characterized by an attractive mix of residential homes, recreational spaces, hospitality and office space. It is situated next to the beautiful waterfront, within a short walking distance to the tram, a 10 minute bike ride to Amsterdam Central Station, and provides easy access to major highways. As it was recently completed in November 2020, the De Horizon Property is not expected to require significant capital expenditure in the near future. The De Horizon Property is also strategically well-located near a significant proportion of ERES’s existing Amsterdam portfolio, allowing for operational efficiency and synergies.
The two acquisitions are expected to close on or around June 30, 2021. The aggregate purchase price of €47 million (approximately C$69.0 million), which represents an estimated blended forward capitalization rate of 3.3%, will be initially financed from existing sources of liquidity via the REIT’s credit facility, to be thereafter replaced in part by long term mortgage financing.
“We are pleased to announce our first two acquisitions of the year with these high-quality multi-residential properties in the Netherlands, each of which will complement and accretively add value to our existing portfolio of assets,” commented Phillip Burns, CEO of ERES. “The Villa Property and De Horizon Property are both optimally located, in excellent physical condition and have advantageous market metrics, reflecting the breadth of attractive opportunities which the Dutch multi-residential market continues to offer. The transactions represent a strong start to ERES’s growth this year.”
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. ERES owns a portfolio of 139 multi-residential properties, comprised of 6,047 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
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent ERES’s intentions, plans, expectations and beliefs and 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.sedar.com.
For further information
|Mr. Phillip Burns||Mr. Stephen Co|
|Chief Executive Officer||Chief Financial Officer|
|[email protected]||[email protected]|