Press Release

ERES REIT Completes C$167 Million Public Offering

Company Release - 9/24/2019 8:27 AM ET

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

TORONTO, Sept. 24, 2019 /CNW/ - European Residential Real Estate Investment Trust (TSX-V:ERE.UN, "ERES" or the "REIT") announced today that it has completed its previously announced issue and sale of 40,185,000 trust units of ERES (the "Units") for $4.15 per Unit for aggregate gross proceeds of $166,767,750, which includes the exercise in full of the over-allotment option (the "Offering"). The Offering was sold through a syndicate of underwriters led by RBC Capital Markets and Scotiabank.

ERES intends to use the net proceeds from the Offering to partially finance the previously announced portfolio acquisitions described in ERES' September 16, 2019 press release (the "Acquisitions"), to repay the approximately €22.5 million outstanding balance on ERES' existing credit facility, to fund future acquisitions, and for general trust purposes. The Offering and Acquisitions are expected to result in ERES' Debt to Gross Book Value ratio being approximately 48%.

CAPREIT's Ownership

As a part of the Offering, Canadian Apartment Properties Real Estate Investment Trust (TSX:CAR.UN, "CAPREIT") acquired 4,820,000 Units for $4.15 per Unit. As a result, CAPREIT beneficially owns, controls or exercises direction over 4,820,000 Units and 140,903,682 class B limited partnership units of ERES Limited Partnership (the "Class B LP Units"), a subsidiary of ERES, representing approximately 73.4% of the issued and outstanding Units, assuming all Class B LP Units are exchanged for 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 140,903,682 Class B LP Units, representing approximately 89% the issued and outstanding Units and Class B LP Units. Subject to the terms set out in the investor rights agreement dated March 29, 2019 between CAPREIT and ERES, CAPREIT may seek to sell or otherwise dispose of some or all of ERES' securities (which may include, but is not limited to, transferring some or all of such securities to its affiliates) from time to time, and/or may seek to acquire additional securities of ERES (which may include rights or securities exercisable or convertible into securities of ERES) from time to time, in each case, in  open market or private transactions, block sales or acquisitions or otherwise. 

After closing of the Acquisitions, which is expected to occur by September 30, 2019, CAPREIT's ownership is expected to increase to approximately 74% of the issued and outstanding Units (assuming all Class B LP Units are exchanged for Units), as a result of the approximately C$5.0 million of Class B LP Units that will be issued to CAPREIT as partial consideration, at a price per Class B LP Unit equal to the weighted average trading price of the trust units on the TSX Venture Exchange (the "TSX-V") for the five trading days immediately preceding the closing of the Acquisitions, subject to TSX-V rules.

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' profile on the SEDAR website at www.sedar.com.

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 currently owns a portfolio of 88 multi-residential properties, comprised of 3,859 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 62,645 suites and sites across Canada, the Netherlands and Ireland. It owns 59,023 residential units, comprising of 47,346 residential suites and 72 manufactured home communities comprising 11,677 land leases sites located in and near major urban centres across Canada and The Netherlands. 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 which can be found under our profile 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' 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", "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' 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.

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 or the Offering 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 in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. persons absent registration or pursuant to applicable exemption from registration.

SOURCE European Residential Real Estate Investment Trust

ERES, Mr. Phillip Burns, Chief Executive Officer, (416) 354-0167, p.burns@eresreit.com; ERES, Mr. Scott Cryer, Chief Financial Officer, (416) 861-5771, s.cryer@eresreit.com; CAPREIT, Mr. Mark Kenney, President & CEO, (416) 861-9404, m.kenney@capreit.net

Contact Us

11 Church Street, Suite 401
Toronto, Ontario, Canada
M5E 1W1

Phillip Burns
Chief Executive Officer
p.burns@eresreit.com
+1 416 354 0167

Scott Cryer
Chief Financial Officer
s.cryer@eresreit.com
+1 416 861 5771