Mr. Mark Kenney reports

EUROPEAN RESIDENTIAL REAL ESTATE INVESTMENT TRUST ANNOUNCES CONCLUSION OF STRATEGIC REVIEW PROCESS

European Residential Real Estate Investment Trust has concluded the REIT's strategic review process, first announced on June 16, 2023.

The strategic review involved the evaluation of various value-maximizing alternatives, including, but not limited to, a possible sale of the REIT. Pursuant to this process, a number of transaction proposals were received from potential strategic and financial counterparties. The board, with assistance from its legal and financial advisers, assessed each proposal and determined that insufficient consideration was offered relative to the intrinsic value of the REIT and the other opportunities currently available for value creation. Accordingly, the board concluded that under prevailing financial market conditions, proceeding with any of the proposed sale transactions would not be in the best interest of the REIT's unitholders at this time.

"Following a thorough review and evaluation of each submission, the board agreed that there was no proposal which achieved the objective of maximizing value," commented Mark Kenney, chief executive officer. "The bids were impacted by challenging macroeconomic headwinds, including an increasingly difficult financing environment. In light of this, ERES will continue to focus on creating unitholder value through other available avenues, with key strategic and liquidity-enhancing initiatives in place to further improve margins, reduce leverage and strengthen the balance sheet."

Gina Parvaneh Cody, chair of the board, said: "Although the strategic review process has come to an end, the board, as always, remains committed to maximizing value and will continue to actively assess potential opportunities to enhance unitholder value in the near- and long-term. The board will remain open to the possibility of a strategic transaction in the future, subject to changing market conditions."

As one of the leading providers of multiresidential housing in the Netherlands, the REIT has deep sector expertise underpinned by a best-in-class operating platform, which has resulted in a consistent record of robust operational performance. Since inception, the REIT has achieved strong growth in rental revenues while maintaining vacancies at a structural minimum. This reflects the increasingly tight rental market in the Netherlands, driven by unprecedented population growth and chronically undersupplied housing stock. Additionally combined with the REIT's cost-control initiatives alongside its inherent insulation from inflationary pressures, the REIT has historically recognized solid margin expansion, and the platform currently produces one of the highest operating margins in its peer universe.

Going forward, the REIT will continue to execute on the core pillars of its proven operational strategy, with a view to advancing the trajectory of its strong organic growth, as it has effectively demonstrated to date. This primary operational program, in conjunction with the REIT's active debt management and financing objectives, will fortify its platform and its ability to continue driving value for all unitholders.

About European Residential Real Estate Investment Trust

European Residential is an unincorporated, open-ended real estate investment trust. The REIT is Canada's only European-focused multiresidential REIT, with a current initial focus on investing in high-quality multiresidential real estate properties in the Netherlands. As at Sept. 30, 2023, European Residential owns a portfolio of 158 multiresidential properties, comprising approximately 6,900 suites and ancillary retail space located in the Netherlands, and owns one office property in Germany and one office property in Belgium.

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