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Just two months after the departure of its CEO, Toronto-based European Residential Real Estate Investment Trust (ERES) is embarking on a strategic review of its business. Teaming up with CBRE as its financial and real...

Toronto Developers

Just two months after the departure of its CEO, Toronto-based European Residential Real Estate Investment Trust (ERES) is embarking on a strategic review of its business. Teaming up with CBRE as its financial and real estate advisor, ERES aims to evaluate its operations and explore potential changes. While the review has no set timeline and no decisions have been made, it highlights the commitment of ERES to ensuring its sustained success.

A history of ERES REIT

ERES has a close connection with Canadian Apartment Properties Real Estate Investment Trust (CAPREIT), which is its major shareholder. In 2019, ERES was created from the former European Commercial REIT (ECREIT) when CAPREIT sold a $634-million portfolio of 41 multiresidential properties in the Netherlands to ERES. Since then, ERES has focused on European-focused multiresidential properties, primarily in the Netherlands.

Q1 2023 financial results

Despite the challenges posed by the pandemic and global financial uncertainties, ERES achieved significant milestones in Q1 2023. Key highlights include an increase in occupied average monthly rents by 5.9% compared to Q1 2022, a growth of 9.4% in NOI, a residential occupancy of 98.7%, and a $36 million improvement in liquidity. These achievements underscore the resilience and potential of ERES in the rapidly evolving real estate market.

Dutch apartment regulatory changes

While ERES experienced robust growth in rents, recent regulatory changes in the Dutch market have introduced stricter controls on rent increases in the mid-market sector. Although a quarter of ERES' portfolio may be affected by these regulations, the trust remains optimistic about its overall portfolio performance. ERES expects to continue achieving rent growth within or above its target range of 3% to 4%.

ERES Office

The strategic review conducted by ERES exemplifies the company's dedication to adapt and excel in an ever-changing real estate landscape. As a prominent player in the European-focused multiresidential market, ERES, along with its partnership with CAPREIT, continues to demonstrate its commitment to providing exceptional real estate investment opportunities.

Please note that no further developments regarding the strategic review will be disclosed unless deemed necessary or appropriate. As of December 31, 2022, CAPREIT owns a diverse portfolio of approximately 67,000 residential apartment suites, townhomes, and manufactured home community sites across Canada and the Netherlands, with a total of approximately $17 billion in investment properties in Canada and Europe.

Image Source: Saigon Intela

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