European Residential REIT Reports Second Quarter 2025 Results

European Residential REIT Reports Second Quarter 2025 Results

GlobeNewswire

August 06, 2025

TORONTO, Aug. 06, 2025 (GLOBE NEWSWIRE) — European Residential Real Estate Investment Trust (“ERES” or the “REIT”) (TSX: ERE.UN) announced today its results for the three and six months ended June 30, 2025.

ERES's unaudited condensed consolidated interim financial statements and management's discussion and analysis (“MD&A”) for the three and six months ended June 30, 2025 can be found at www.eresreit.com or under ERES's profile at SEDAR+ at www.sedarplus.ca.

SIGNIFICANT EVENTS AND HIGHLIGHTS

Strategic Initiatives Update

During the six months ended June 30, 2025, through a number of transactions, the REIT disposed of ten residential properties in the Netherlands, which included the assets held for sale as at December 31, 2024, for total gross proceeds of EUR90.0 million.
During the six months ended June 30, 2025, the REIT disposed of two individual residential suites in the Netherlands for gross proceeds of EUR0.9 million.
In addition, the REIT has sold its Belgian commercial property on July 31, 2025, and also entered into agreements to sell its German commercial property and one of the residential properties in the Netherlands, which are expected to close in the third quarter of 2025, for approximately EUR52.8 million in aggregate gross proceeds.
On April 2, 2025, the REIT announced that it has entered into an agreement to sell entities owning 1,446 residential suites in the Netherlands for gross proceeds, net of estimated adjustments, of approximately EUR337.3 million. Subject to the satisfaction of closing conditions, the announced disposition is expected to close on September 15, 2025. There can be no assurance that all requirements for closing will be obtained, satisfied or waived.
Subject to the completion of certain pending dispositions in accordance with the terms and timing disclosed, the REIT has announced an intention to declare a special distribution to Unitholders of an estimated EUR0.90 per Unit, payable in cash in September 2025. The special distribution has not yet been declared and there can be no assurance as to the timing or quantum of such a distribution. The REIT also announced its intention to cease its regular monthly cash distributions. Subject to completion of the pending dispositions, the anticipated final regular monthly distribution is to be declared in August 2025, with payment in September 2025. Please refer to the REIT's press releases dated April 2, 2025 and July 31, 2025 for more information.
Furthermore, as previously announced, the REIT has launched a sale process for all or a portion of the balance of the REIT's portfolio. There can be no assurance that this process will result in the successful completion of the sale of any portion of the remaining portfolio or that such sales will be completed at, or above, reported IFRS fair value. It is anticipated that the proceeds of any such sales will be distributed to Unitholders after deducting transaction expenses, taxes, wind-up costs and other costs and expenses (which could be significant).

Operating Metrics

Same property portfolio Occupied Average Monthly Rents (“Occupied AMR”) increased by 6.8%, from EUR1,220 as at June 30, 2024 to EUR1,303 as at June 30, 2025, demonstrating the REIT's continued achievement of rental growth.
Same property turnover was 2.6% for the three months ended June 30, 2025, with rental uplift on turnover of 3.6%, compared to rental uplift of 9.1% on same property turnover of 3.9% for the same quarter last year. Same property turnover was 6.1% for the six months ended June 30, 2025, with rental uplift on turnover of 13.4%, compared to rental uplift of 9.5% on same property turnover of 8.3% for the same period last year.
Same property occupancy for the residential properties decreased to 92.9% as at June 30, 2025, compared to 98.2% as at June 30, 2024, primarily related to suites intentionally held vacant to promote value maximization in the context of the REIT's disposition strategy. Same property occupancy for commercial properties decreased to 89.1% as at June 30, 2025 from 91.3% as at June 30, 2024, due to a reduction in leased area after renewal of one of the commercial leases.
Same property Net Operating Income (“NOI”) margin decreased by 2.9% and 2.8%, respectively, for the three and six months ended June 30, 2025, compared to the same periods last year, primarily driven by decrease in revenue from investment properties due to suites intentionally held vacant to promote value maximization in the context of the REIT's disposition strategy, along with higher R&M costs.

Financial Performance

Diluted Funds From Operations (“FFO”) per Unit for the three and six months ended June 30, 2025 decreased by 48.7% and 51.3%, respectively, compared to the same periods last year, predominantly due to lower total portfolio NOI as a result of dispositions, partially offset by lower interest costs being incurred following repayment of debt with net disposition proceeds received.
Diluted Adjusted Funds From Operations (“AFFO”) per Unit for the three and six months ended June 30, 2025 decreased by 48.6% and 50.0%, respectively, compared to the same periods last year, due to the same reasons mentioned above for diluted FFO per Unit and partially offset by decreases in actual non-discretionary capital investments.

Financial Position and Liquidity

On June 23, 2025, the REIT amended its Revolving Credit Facility to reduce the availability from EUR125 million to EUR20 million to better align with the liquidity needs of the REIT and save on standby fees. As a result, liquidity decreased to EUR23.1 million, compared to EUR132.8 million as at prior year end.
During the six months ended June 30, 2025, the REIT repaid EUR90.6 million of mortgages payable with a weighted average effective interest rate of 1.72%, including EUR63.6 million resulting from dispositions.
Debt coverage metrics are within covenant thresholds, with interest and debt service coverage ratios of 3.5x and 2.9x, respectively, and adjusted debt to gross book value ratio standing at 35.8%.
As at June 30, 2025, the REIT's mortgage profile had a weighted average term to maturity of 2.4 years and a weighted average effective interest rate of 2.46%.

“Over the past few months, we've continued to make progress on our value-maximizing liquidation strategy,” commented Mark Kenney, Chief Executive Officer. “We kicked off this second quarter by announcing that we had entered an agreement to sell 1,446 residential suites in the Netherlands for aggregate proceeds, net of estimated adjustments, of approximately EUR337 million, and we've announced another EUR31 million in commercial dispositions. Subject to closing on the disclosed terms and timing, these transactions together are intended to fund a special distribution of an estimated EUR0.90 per Unit, payable in cash in September 2025, consistent with our stated commitment to surface the value of the platform and distribute the net proceeds to Unitholders. In line with that objective, we are continuing to work with our financial and real estate advisors on a sale process for the balance of the portfolio. The Board of Trustees and the management team remain united in our determination to execute on this strategic mission in the best financial interests of all Unitholders, and we will provide a further update on our progress as soon as practicable.”

“The REIT also announced that it has entered into an agreement to dispose of another 110-suite residential property in the Netherlands for approximately EUR22 million in gross proceeds, with closing expected by the end of the third quarter of 2025,” added Jenny Chou, Chief Financial Officer. “Following this, we will have a remaining portfolio of 1,036 high-quality residential suites in the Netherlands which are up for sale. Across this same property portfolio, rent growth remains robust, with Occupied AMR having increased by 6.8% to EUR1,303 at current period end. However, with elevated vacancies associated with our disposition strategy along with higher repairs and maintenance costs, our same property NOI margin was down to 73.6% for the three months ended June 30, 2025. That being said, our balance sheet continues to hold strong with an adjusted debt to gross book value ratio at 35.8% as of June 30, 2025. We also have only EUR7 million in mortgages maturing over the remainder of 2025, and no maturities in 2026. This provides us with the financial flexibility that we need to achieve our strategic objectives.”

OPERATING RESULTS

Rental Rates

Total Property Portfolio	Suite Count		Occupied AMR/ABR¹			Occupancy %
As at June 30,	2025	2024	2025	2024	AMR	2025	2024
			EUR	EUR	% Change
Residential Properties	2,592	6,743	1,245	1,072	16.1	91.0	97.7
Commercial Properties²			18.2	17.4	4.6	89.1	92.1

¹	Average In-Place Base Rent (“ABR”).
²	Represents 392,904 square feet (“sq. ft.”) of commercial gross leasable area (“GLA”) as at June 30, 2025 (June 30, 2024 — 450,911 sq. ft.).

Same Property Portfolio	Suite Count¹	Occupied AMR/ABR			Occupancy %
As at June 30,		2025	2024	AMR	2025	2024
		EUR	EUR	% Change
Residential Properties	1,036	1,303	1,220	6.8	92.9	98.2
Commercial Properties²		18.2	17.8	2.2	89.1	91.3

¹	Same property suite count includes all suites owned by the REIT as at both June 30, 2025 and June 30, 2024, and excludes properties and suites disposed of or classified as assets held for sale as at June 30, 2025.
²	Includes 392,904* sq. ft. of same property commercial GLA, which excludes commercial GLA disposed of since June 30, 2024.*

Occupied AMR for the same property residential portfolio as at June 30, 2025 increased by 6.8%, compared to EUR1,220 as at June 30, 2024, mainly driven by indexation and turnover. The Occupied ABR for the same property commercial portfolio increased from EUR17.8 as at June 30, 2024 to EUR18.2 as at June 30, 2025, driven by indexation.

Suite Turnovers

Total Portfolio Turnover

For the Three Months Ended June 30,	2025		2024
	Change in Monthly Rent	Turnovers²	Change in Monthly Rent	Turnovers²
	%	%	%	%
Weighted average turnovers¹	3.6	1.0	17.3	1.9
Weighted average turnovers excluding service charge income	3.6	1.0	18.4	1.9

¹	Represents the percentage increase in monthly rent inclusive of service charge income.
²	Percentage of suites turned over during the period based on the weighted average number of total residential suites held during the period.

For the Six Months Ended June 30,	2025		2024
	Change in Monthly Rent	Turnovers²	Change in Monthly Rent	Turnovers²
	%	%	%	%
Weighted average turnovers¹	13.4	2.3	16.3	5.0
Weighted average turnovers excluding service charge income	14.7	2.3	17.0	5.0

¹	Represents the percentage increase in monthly rent inclusive of service charge income.
²	Percentage of suites turned over during the period based on the weighted average number of total residential suites held during the period.

Same Property Turnover

For the Three Months Ended June 30,	2025		2024
	Change in Monthly Rent	Turnovers²	Change in Monthly Rent	Turnovers²
	%	%	%	%
Weighted average turnovers¹	3.6	2.6	9.1	3.9
Weighted average turnovers excluding service charge income	3.6	2.6	9.7	3.9

¹	Represents the percentage increase in monthly rent inclusive of service charge income.
²	Percentage of suites turned over during the period based on the weighted average number of same property residential suites held during the period.

For the Six Months Ended June 30,	2025		2024
	Change in Monthly Rent	Turnovers²	Change in Monthly Rent	Turnovers²
	%	%	%	%
Weighted average turnovers¹	13.4	6.1	9.5	8.3
Weighted average turnovers excluding service charge income	14.7	6.1	10.0	8.3

¹	Represents the percentage increase in monthly rent inclusive of service charge income.
²	Percentage of suites turned over during the year based on the weighted average number of same property residential suites held during the year.

The percentage of suites turned over for the same property portfolio during the three and six months ended June 30, 2025 has decreased to 2.6% and 6.1%, respectively, compared to 3.9% and 8.3%, respectively for the comparable periods last year, primarily as a result of suites held vacant to to promote value maximization in the context of the REIT's disposition strategy.

Suite Renewals

Lease renewals generally occur on July 1 for residential suites. For the rental increases due to indexation beginning July 1, 2025, the REIT served tenant notices to 85% of its residential suites, across which the average rental increase due to indexation and household income adjustments is 4.0%. On July 1, 2024, the REIT renewed leases for 94% of its residential suites, to which the average rental increase due to indexation and household income adjustments is 5.5%.

There was one lease renewal in the REIT's commercial portfolio during the six months ended June 30, 2025 (six months ended June 30, 2024 – no lease renewal).

Total Portfolio Performance

Three Months Ended,

Six Months Ended

June 30,

2025

2024

2025

2024

Operating Revenues (000s)

EUR

11,890

EUR

24,456

EUR

23,715

EUR

48,895

NOI (000s)

EUR

8,846

EUR

19,333

EUR

17,686

EUR

38,446

NOI Margin¹

74.4

79.1

74.6

78.6

Weighted Average Number of Suites

2,594

6,811

2,719

6,842

¹	Excluding service charge income and expense, the total portfolio NOI margin for the three and six months ended June 30, 2025 was 82.7% and 82.7%, respectively (three and six months ended June 30, 2024 — 84.3% and 83.9%, respectively).

Total portfolio operating revenues decreased by 51.4% and 51.5%, respectively, for the three and six months ended June 30, 2025, compared to the same periods last year. Total portfolio NOI decreased by 54.2% and 54.0%, respectively, from the same periods last year. The decreases in total portfolio operating revenues and NOI were primarily due to decrease in revenue from investment properties as a result of strategic dispositions of over 60% of the REIT's residential portfolio since June 30, 2024 and loss in revenues due to disposition-related vacancies, partially offset by the increases in revenues from indexation and turnover.

For the three months ended June 30, 2025, the NOI margin on the total portfolio decreased to 74.4% from 79.1% for the comparable prior year quarter (excluding service charges, total portfolio NOI margin decreased to 82.7% from 84.3% for the comparable prior year quarter). For the six months ended June 30, 2025, the NOI margin on the total portfolio decreased to 74.6% from 78.6% for the prior year period (excluding service charges, total portfolio NOI margin decreased to 82.7% from 83.9% for the comparable prior year period). The decrease in the NOI margins was predominantly due to increases in R&M costs and realty taxes as a percentage of total operating revenues. Service charge expenses are fully recoverable from tenants via service charge income and therefore have a nil net impact on NOI.

The following table reconciles same property NOI and NOI from dispositions and assets held for sale to total NOI, for the three and six months ended June 30, 2025 and June 30, 2024.

(EUR Thousands)

Three Months Ended

Six Months Ended

June 30,

2025

2024

2025

2024

Same property NOI

EUR

4,348

EUR

4,704

EUR

8,781

EUR

9,353

NOI from dispositions and assets held for sale

4,498

14,629

8,905

29,093

Total NOI

EUR

8,846

EUR

19,333

EUR

17,686

EUR

38,446

Same Property Portfolio Performance¹

Three Months Ended,

Six Months Ended

June 30,

2025

2024

2025

2024

Operating Revenues (000s)

EUR

5,909

EUR

6,149

EUR

11,886

EUR

12,201

NOI (000s)

EUR

4,348

EUR

4,704

EUR

8,781

EUR

9,353

NOI Margin²

73.6

76.5

73.9

76.7

¹	Same property portfolio includes all properties and suites continuously owned by the REIT since December 31, 2023, and excludes properties, buildings and suites disposed of since December 31, 2023 and properties classified as assets held for sale as at June 30, 2025. For the three and six months ended June 30, 2025 and 2024, same property portfolio includes 1,036 residential suites and 392,904 sq. ft. of commercial GLA.
²	Excluding service charge income and expense, the same property portfolio NOI margin for the three and six months ended June 30, 2025 was 84.2% and 84.2%, respectively (three and six months ended June 30, 2024 — 86.2% and 86.3%, respectively).

For the three and six months ended June 30, 2025, the same property NOI decreased by 7.6% and 6.1%, respectively, compared to the prior year periods. For the three months ended June 30, 2025, the NOI margin on the same property portfolio decreased to 73.6% from 76.5% for the comparable prior year quarter (excluding service charges, same property NOI margin decreased to 84.2% from 86.2% for the comparable prior year quarter). For the six months ended June 30, 2025, the NOI margin on the same property portfolio decreased to 73.9%, compared to 76.7% for the prior year period (excluding services charges, same property NOI margin decreased to 84.2% compared to 86.3% for the prior year period). The decreases in the same property NOI and NOI margins were primarily driven by decrease in revenue from investment properties due to suites intentionally held vacant to promote value maximization in the context of the REIT's disposition strategy, along with an increase in R&M costs.

FINANCIAL PERFORMANCE

Funds from Operations and Adjusted Funds from Operations

FFO is a measure of operating performance based on the funds generated by the business before reinvestment or provision for other capital needs. AFFO is a supplemental measure which adjusts FFO for costs associated with non-discretionary capital expenditures and leasing costs. FFO and AFFO as presented are in accordance with the most recent recommendations of the Real Property Association of Canada (“REALpac”), with the exception of certain adjustments made to the REALpac defined FFO, which relate to (i) gain from Unit Options forfeited on senior management termination, (ii) mortgage repayment costs, (iii) amortization related to the accelerated vesting of RURs, and (iv) tax related to tax authority reassessments. FFO and AFFO may not, however, be comparable to similar measures presented by other real estate investment trusts or companies in similar or different industries. Management considers FFO and AFFO to be important measures of the REIT's operating performance. Please refer to “Basis of Presentation and Non-IFRS Measures” within this press release for further information.

A reconciliation of net (loss) income and comprehensive (loss) income to FFO is as follows:

(EUR Thousands, except per Unit amounts)	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2025				2024				2025				2024
Net (loss) income and comprehensive (loss) income for the period	EUR	(7,918	)		EUR	17,407			EUR	(45,086	)		EUR	40,228
Adjustments:
Net movement in fair value of investment properties and assets held for sale		19,318				(11,107	)			39,340				(8,797	)
Net movement in fair value of Class B LP Units		(8,953	)			(5,506	)			1,977				(24,771	)
Fair value adjustments of Unit-based compensation liabilities		(99	)			(226	)			(394	)			952
Interest expense on Class B LP Units		2,130				4,261				4,261				8,522
Deferred income tax (recovery) expense		(2,038	)			2,817				889				2,147
Foreign exchange (gain) loss		(8	)			228				(34	)			442
Net loss (gain) on derivative financial instruments		856				198				791				(440	)
Transaction costs on dispositions¹		724				380				1,918				505
Tax related to dispositions and tax authority reassessments²		132				731				3,920				1,120
Mortgage repayment costs³		23				(38	)			377				(38	)
Amortization related to accelerated vesting of RURs⁴		513				—				913				—
Gain from Unit Options forfeited on senior management termination⁵		—				—				—				(1,552	)
FFO	EUR	4,680			EUR	9,145			EUR	8,872			EUR	18,318
FFO per Unit – diluted⁶	EUR	0.020			EUR	0.039			EUR	0.038			EUR	0.078

Total monthly distributions declared⁷	EUR	3,523			EUR	7,018			EUR	7,040			EUR	14,030
FFO payout ratio⁷		75.3		%		76.7		%		79.4		%		76.6		%

¹	Includes EUR715 transaction costs on pending dispositions for the three and six months ended July 30, 2025 (three and six months ended June 30, 2024 — nil).
²	Included in current income tax expense in the consolidated interim* statements of net (loss) income and comprehensive (loss) income.*
³	Relate to repayment penalties and write-off of deferred financing costs and fair value adjustment related to mortgages repaid.
⁴	Related to the accelerated vesting of the REIT's RURs vested on May 20, 2025 and January 7, 2025.
⁵	Represents Unit-based compensation financial liabilities written off during the six months ended June 30, 2024, due to Unit Options forfeited as a result of senior management termination.
⁶	Includes Class B LP Units and the dilutive impact of unexercised Unit Options and RURs.
⁷	Includes interest on Class B LP Units.

Diluted FFO per Unit for the three and six months ended June 30, 2025 decreased by EUR0.019 (48.7%) and EUR0.040 (51.3%), respectively, from the same periods last year, primarily due to lower total portfolio NOI as a result of dispositions, partially offset by lower interest costs being incurred following the repayment of debt with net disposition proceeds received.

The table below illustrates a reconciliation of the REIT's FFO and AFFO:

(EUR Thousands, except per Unit amounts)

Three Months Ended

Six Months Ended

June 30,

2025

2024

2025

2024

FFO

EUR

4,680

EUR

9,145

EUR

8,872

EUR

18,318

Adjustments:

Actual non-discretionary capital investments

—

(359

)

(22

)

(731

)

Leasing cost reserve¹

(110

)

(128

)

(220

)

(255

)

AFFO

EUR

4,570

EUR

8,658

EUR

8,630

EUR

17,332

AFFO per Unit – diluted²

EUR

0.019

EUR

0.037

EUR

0.037

EUR

0.074

Total monthly distributions declared³

EUR

3,523

EUR

7,018

EUR

7,040

EUR

14,030

AFFO payout ratio³

77.1

81.1

81.6

80.9

¹	Leasing cost reserve is based on annualized 10-year forecast of external leasing costs on the commercial properties.
²	Includes Class B LP Units and the dilutive impact of unexercised Unit Options and RURs.
³	Includes interest on Class B LP Units.

Diluted AFFO per Unit for the three and six months ended June 30, 2025 decreased by EUR0.018 (48.6%) and EUR0.037 (50.0%), respectively, from the same periods last year, due to the same reasons mentioned above for diluted FFO per Unit, partially offset by decreases in actual non-discretionary capital investments, mainly caused by the change in property management during the first quarter of 2025, which resulted in delays in capital investment projects, and the REIT's dispositions.

Net Asset Value

Net Asset Value (“NAV”) represents total Unitholders' equity per the REIT's consolidated balance sheets, adjusted to include or exclude certain amounts in order to provide what management considers to be a key measure of the residual value of the REIT to its Unitholders as at the reporting date. NAV is therefore used by management on both an aggregate and per Unit basis to evaluate the net asset value attributable to Unitholders, and changes thereon based on the execution of the REIT's strategy. While NAV is calculated based on items included in the consolidated financial statements or supporting notes, NAV itself is not a standardized financial measure under IFRS and may not be comparable to similarly termed financial measures disclosed by other real estate investment trusts or companies in similar or different industries. Please refer to the “Basis of Presentation and Non-IFRS Measures” section within this press release for further information.

A reconciliation of Unitholders' equity to NAV is as follows:

(EUR Thousands, except per Unit amounts)
As at		June 30, 2025			December 31, 2024			June 30, 2024
Unitholders' equity	EUR	214,396		EUR	261,024		EUR	462,785
Class B LP Units		221,489			219,512			225,783
Unit-based compensation financial liabilities		42			623			81
Net deferred income tax liability¹		1,286			11,025			17,016
Net derivative financial asset²		(3,973	)		(5,925	)		(16,341	)
NAV	EUR	433,240		EUR	486,259		EUR	689,324
NAV per Unit – diluted³	EUR	1.84		EUR	2.07		EUR	2.94
NAV per Unit – diluted (in C$)^3,4	C$	2.95		C$	3.09		C$	4.31

¹	Represents deferred income tax liabilities of EUR1,338 net of deferred income tax assets of EUR52 as at June 30, 2025 (December 31, 2024 — deferred income tax liabilities of EUR18,925 net of deferred income tax assets of EUR7,900; June 30, 2024 — deferred income tax liabilities of EUR30,522 net of deferred income tax assets of EUR13,506).
²	Represents non-current derivative financial assets of EUR3,973 as at June 30, 2025 (December 31, 2024 — non-current and current derivative financial assets of EUR5,904 and EUR21, respectively; June 30, 2024 — non-current and current derivative financial assets of EUR15,985 and EUR356, respectively).
³	Includes Class B LP Units and the dilutive impact of unexercised Unit Options and RURs.
⁴	Based on the foreign exchange rate of 1.6033 on June 30, 2025 (foreign exchange rate of 1.4929 and 1.4658 on December 31, 2024 and June 30, 2024, respectively).

Other Financial Highlights

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2025	2024	2025	2024
Weighted Average Number of Units – Diluted (000s)¹	234,975	234,225	234,894	233,989

As at		June 30, 2025		December 31, 2024		June 30, 2024
Closing Price of REIT Units^{3, 4}	EUR	1.56	EUR	2.55	EUR	1.59
Closing Price of REIT Units (in C$)⁴	C$	2.50	C$	3.80	C$	2.33
Market Capitalization (millions)^{2, 3, 4}	EUR	367	EUR	597	EUR	371
Market Capitalization (millions in C$)^{2, 4}	C$	588	C$	891	C$	544

¹	Includes Class B LP Units and the dilutive impact of unexercised Unit Options and RURs.
²	Includes Class B LP Units.
³	Based on the foreign exchange rate of 1.6033* on June 30, 2025 (foreign exchange rate of 1.4929 and 1.4658 on December 31, 2024 and June 30, 2024, respectively).*
⁴	The December 31, 2024 closing price of REIT Units and market capitalization did not reflect the EUR1.00 per Unit special distribution paid on the same date with the ex-distribution date of January 2, 2025.

FINANCIAL POSITION AND LIQUIDITY

As at		June 30, 2025			December 31, 2024			June 30, 2024
Ratio of Adjusted Debt to Gross Book Value¹		35.8	%		39.7	%		56.2	%
Debt Service Coverage Ratio (times)^1,2		2.9	x		2.6	x		2.4	x
Interest Coverage Ratio (times)^1,2		3.5	x		3.2	x		2.8	x
Weighted Average Mortgage Effective Interest Rate³		2.46	%		2.27	%		2.21	%
Weighted Average Mortgage Term (years)		2.4			2.5			2.5
Available Liquidity (000s)⁴	EUR	23,080		EUR	132,770		EUR	54,704

¹	Please refer to the “Basis of Presentation and Non-IFRS Measures” section of this press release for further information.
²	Based on trailing four quarters.
³	Includes impact of deferred financing costs, fair value adjustment and interest rate swaps.
⁴	Includes cash and cash equivalents of EUR10.5 million and unused credit facility capacity of EUR12.6 million as at June 30, 2025 (cash and cash equivalents of EUR7.8 million and unused credit facility capacity of EUR125.0 million as at December 31, 2024; cash and cash equivalents of EUR8.5 million and unused credit facility capacity of EUR46.3 million as at June 30, 2024).

As at June 30, 2025, ERES's available liquidity decreased to EUR23.1 million, compared to EUR132.8 million as at the prior year end, due to the amendment to the REIT's Revolving Credit Facility agreement, which reduced the availability from EUR125.0 million to EUR20.0 million to better align with the liquidity needs of the REIT and save on standby fees. As at June 30, 2025, the REIT's mortgage profile had a weighted average term to maturity of 2.4 years and fixed interest payment terms for substantially all of its mortgages at a weighted average effective interest rate of 2.46%. This is further reinforced by compliant debt coverage metrics, with debt and interest service coverage ratios of 2.9x and 3.5x, respectively, and adjusted debt to gross book value ratio well within its target range at 35.8%.

Management aims to maintain an optimal degree of debt to gross book value of the REIT's assets, depending on a number of factors at any given time. Capital adequacy is monitored against investment and debt restrictions contained in the REIT's sixth amended and restated declaration of trust dated January 7, 2025 (the “Declaration of Trust”) and the amended and restated credit agreement dated June 23, 2025 between the REIT and one Canadian chartered bank, providing access to up to EUR20.0 million with an accordion feature to increase the limit a further EUR25.0 million upon satisfaction of conditions set out in the agreement (the “Revolving Credit Facility”).

The REIT manages its overall liquidity risk by maintaining sufficient available credit facility and available cash on hand to fund its ongoing operational and capital commitments and distributions to Unitholders.

DISTRIBUTIONS

During the three and six months ended June 30, 2025, the REIT declared monthly distributions of EUR0.005 per Unit (being equivalent to EUR0.06 per Unit annualized), which were paid to Unitholders of record on each record date, on or about the 15th day of the month following the record date (three and six months ended June 30, 2024 — EUR0.010 per Unit (being equivalent to EUR0.12 per Unit annualized)). Subject to the completion of certain pending dispositions in accordance with the terms and timing disclosed, the REIT has announced an intention to declare a special distribution to Unitholders of an estimated EUR0.90 per Unit, payable in cash in September 2025. The REIT also announced its intention to cease its regular monthly cash distributions. Subject to completion of the pending dispositions, the anticipated final regular monthly distribution is to be declared in August 2025, with payment in September 2025.

The REIT had a Distribution Reinvestment Plan (“DRIP”), which allowed holders of REIT Units or Class B LP Units (“Eligible Unitholders”) to choose to have all or a portion of the REIT's cash monthly distributions automatically reinvested in additional REIT Units. This DRIP was terminated on January 16, 2025 and as a result, the DRIP is not available for the REIT's monthly distributions paid on and after January 16, 2025.

CONFERENCE CALL

A conference call hosted by Mark Kenney, Chief Executive Officer and Jenny Chou, Chief Financial Officer, will be held on Thursday, August 7, 2025 at 9:00 am EST. The telephone numbers for the conference call are: Canadian Toll Free: +1 (833) 950-0062 / International Toll: +1 (929) 526-1599. The conference call access code is 173557.

The call will also be webcast live and accessible through the ERES website at www.eresreit.com — click on “Investor Info” and follow the link at the top of the page. A replay of the webcast will be available for one year after the webcast at the same link.

The slide presentation to accompany senior management's comments during the conference call will be available on the ERES website an hour and a half prior to the conference call.

ABOUT EUROPEAN RESIDENTIAL REAL ESTATE INVESTMENT TRUST

ERES is an unincorporated, open-ended real estate investment trust. ERES's REIT Units are listed on the TSX under the symbol ERE.UN. ERES is Canada's only European-focused multi-residential REIT, with a current portfolio of high-quality, multi-residential real estate properties in the Netherlands. As at June 30, 2025, ERES owned 2,592 residential suites, including 1,556 suites classified as assets held for sale, and ancillary retail space located in the Netherlands, and owned one commercial property in Germany and one commercial property in Belgium, with a total fair value of approximately EUR709.8 million, including approximately EUR366.0 million of assets held for sale.

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.

BASIS OF PRESENTATION AND NON-IFRS MEASURES

Unless otherwise stated, all amounts included in this press release are in thousands of Euros (“EUR”), the functional currency of the REIT. The REIT's unaudited condensed consolidated interim financial statements and the notes thereto for the three and six months ended June 30, 2025, are prepared in accordance with International Financial Reporting Standards (“IFRS”). Financial information included within this press release does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the REIT's unaudited condensed consolidated interim financial statements and MD&A for the three and six months ended June 30, 2025, which are available on the REIT's website at www.eresreit.com and on SEDAR+ at www.sedarplus.ca.

Consistent with the REIT's management framework, management uses certain financial measures to assess the REIT's financial performance, which are not in accordance with IFRS (“Non-IFRS Measures”). Since these Non-IFRS Measures are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. The REIT presents Non-IFRS Measures because management believes Non-IFRS Measures are relevant measures of the ability of the REIT to earn revenue, generate sustainable economic earnings, and to evaluate its performance and financial condition. The Non-IFRS Measures should not be construed as alternatives to the REIT's financial position, net income or cash flows from operating activities determined in accordance with IFRS as indicators of the REIT's performance or the sustainability of distributions. For full definitions of these measures, please refer to “Non-IFRS Measures” in Section I and Section IV of the REIT's MD&A for the three and six months ended June 30, 2025.

Where not otherwise disclosed, reconciliations for certain Non-IFRS Measures included within this press release are provided below.

Adjusted Debt and Adjusted Debt Ratio

The REIT's Declaration of Trust requires compliance with certain financial covenants, including the Ratio of Adjusted Debt to Gross Book Value. Management uses Adjusted Total Debt as defined by Declaration of Trust and the Ratio of Adjusted Debt to Gross Book Value as indicators in assessing if the debt level maintained is sufficient to provide adequate cash flows for distributions.

A reconciliation from total debt is as follows:

(EUR Thousands)
As at		June 30, 2025				December 31, 2024				June 30, 2024
Mortgages payable¹	EUR	253,930			EUR	344,181			EUR	880,794
Revolving Credit Facility²		7,412				(290	)			78,440
Total Debt	EUR	261,342			EUR	343,891			EUR	959,234

Fair value adjustment on mortgages payable		(46	)			(92	)			(570	)
Adjusted Total Debt as Defined by Declaration of Trust	EUR	261,296			EUR	343,799			EUR	958,664
Gross Book Value³	EUR	729,730			EUR	865,374			EUR	1,705,985
Ratio of Adjusted Debt to Gross Book Value		35.8		%		39.7		%		56.2		%

¹	Represents non-current and current mortgages payable of EUR247,411 and EUR6,519, respectively, as at June 30, 2025 (December 31, 2024 — non-current and current mortgages payable of EUR310,682 and EUR33,499, respectively; June 30, 2024 — non-current and current mortgages payable of EUR691,048 and EUR189,746, respectively).
²	Negative balance as at December 31, 2024 represents unamortized deferred loan costs.
³	Gross Book Value is defined by the REIT's Declaration of Trust as the gross book value of the REIT's assets as per the REIT's financial statements, determined on a fair value basis for investment properties and assets held for sale.

Adjusted Earnings Before Interest, Tax, Depreciation, Amortization and Fair Value

Adjusted Earnings Before Interest, Tax, Depreciation, Amortization and Fair Value (“EBITDAFV”) is calculated as prescribed in the REIT's Revolving Credit Facility for the purpose of determining the REIT's Debt Service Coverage Ratio and Interest Coverage Ratio, and is defined as net income (loss) attributable to Unitholders, reversing, where applicable, income taxes, interest expense, depreciation expense, amortization expense, impairment, adjustments to fair value, transaction gain (loss), costs associated with repayment of mortgages and other adjustments as permitted in the REIT's Revolving Credit Facility. Management believes Adjusted EBITDAFV is useful in assessing the REIT's ability to service its debt, finance capital expenditures and provide for distributions to its Unitholders.

A reconciliation of net (loss) income and comprehensive (loss) income to Adjusted EBITDAFV is as follows:

(EUR Thousands)
For the Three Months Ended		Q2 25			Q1 25			Q4 24			Q3 24			Q2 24			Q1 24			Q4 23			Q3 23
Net (loss) income and comprehensive (loss) income	EUR	(7,918	)	EUR	(37,168	)	EUR	(52,390	)	EUR	(52,126	)	EUR	17,407		EUR	22,821		EUR	(35,917	)	EUR	24,784
Adjustments:
Net movement in fair value of investment properties and assets held for sale		19,318			20,022			(13,873	)		(39,352	)		(11,107	)		2,310			35,337			24,768
Net movement in fair value of Class B LP Units		(8,953	)		10,930			(86,511	)		80,240			(5,506	)		(19,265	)		8,218			(39,339	)
Fair value adjustments of Unit-based compensation liabilities		(99	)		(295	)		362			203			(226	)		1,178			(194	)		(463	)
Net loss (gain) on derivative financial instruments		856			(65	)		3,088			4,480			198			(638	)		6,304			640
Foreign exchange (gain) loss		(8	)		(26	)		—			—			228			214			224			213
Interest expense on Class B LP Units		2,130			2,131			146,302			4,261			4,261			4,261			4,261			4,261
Interest on mortgages payable		1,555			1,681			3,301			4,373			4,832			4,558			4,608			4,607
Interest on Revolving Credit Facility		151			253			528			734			1,210			1,335			1,422			1,336
Interest on promissory notes		—			—			—			—			—			—			—			—
Amortization		263			173			621			176			138			144			246			150
Transaction losses		724			1,194			2,567			1,547			380			125			58			19
Costs associated with repayment of mortgages		23			354			1,306			1,206			—			—			—			—
Income tax (recovery) expense		(1,121	)		7,664			8,796			10,481			5,253			1,308			(8,143	)		(5,081	)
Adjusted EBITDAFV	EUR	6,921		EUR	6,848		EUR	14,097		EUR	16,223		EUR	17,068		EUR	18,351		EUR	16,424		EUR	15,895
Cash taxes		(917	)		(4,737	)		(4,400	)		(1,756	)		(2,436	)		(1,978	)		(2,395	)		(1,251	)
Tax related to dispositions and tax authority reassessments		132			3,788			3,124			277			731			389			234			80
Adjusted EBITDAFV less cash taxes	EUR	6,136		EUR	5,899		EUR	12,821		EUR	14,744		EUR	15,363		EUR	16,762		EUR	14,263		EUR	14,724

Debt Service Coverage Ratio

The Debt Service Coverage Ratio is defined as Adjusted EBITDAFV less cash taxes, divided by the sum of interest expense (including on mortgages payable, Revolving Credit Facility and promissory notes) and all regularly scheduled principal amortization repayments made with respect to indebtedness during the period (other than any balloon, bullet or similar principal payable at maturity or which repays such indebtedness in full). The Debt Service Coverage Ratio is calculated as prescribed in the REIT's Revolving Credit Facility, and is based on the trailing four quarters. Management believes the Debt Service Coverage Ratio is useful in determining the ability of the REIT to service the principal and interest requirements of its outstanding debt.

(EUR Thousands)
As at		June 30, 2025		December 31, 2024		June 30, 2024
Principal amortization repayments¹	EUR	888	EUR	1,776	EUR	1,988
Interest on mortgages payable¹		10,910		17,064		18,605
Interest on Revolving Credit Facility¹		1,666		3,807		5,303
Debt service payments	EUR	13,464	EUR	22,647	EUR	25,896
Adjusted EBITDAFV less cash taxes¹	EUR	39,600	EUR	59,690	EUR	61,112
Debt Service Coverage Ratio (times)		2.9x		2.6x		2.4x

¹	For the trailing 12 months ended.

Interest Coverage Ratio

The Interest Coverage Ratio is defined as Adjusted EBITDAFV divided by interest expense (including on mortgages payable, Revolving Credit Facility and promissory notes). The Interest Coverage Ratio is calculated as prescribed in the REIT's Revolving Credit Facility, and is based on the trailing four quarters. Management believes the Interest Coverage Ratio is useful in determining the REIT's ability to service the interest requirements of its outstanding debt.

(EUR Thousands)
As at		June 30, 2025		December 31, 2024		June 30, 2024
Interest on mortgages payable¹	EUR	10,910	EUR	17,064	EUR	18,605
Interest on Revolving Credit Facility¹		1,666		3,807		5,303
Interest expense	EUR	12,576	EUR	20,871	EUR	23,908
Adjusted EBITDAFV¹	EUR	44,089	EUR	65,739	EUR	67,738
Interest Coverage Ratio (times)		3.5x		3.2x		2.8x

¹	For the trailing 12 months ended.

FORWARD-LOOKING DISCLAIMER

Certain statements contained in this press release constitute forward-looking statements within the meaning of applicable Canadian securities laws which reflect the REIT's 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”, “intend”, “estimate”, “anticipate”, “believe”, “consider”, “should”, “plan”, “predict”, “forward”, “potential”, “could”, “would”, “should”, “might”, “likely”, “approximately”, “scheduled”, “forecast”, “variation”, “project”, “budget” or “continue”, or similar expressions suggesting future outcomes or events. Management's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. Although the forward-looking statements contained in this press release are based on assumptions and information that are available to management as of the date on which the statements are made in this press release, including current market conditions and management's assessment of disposition and other opportunities that are or may become available to the REIT, which are subject to change, management believes these statements have been prepared on a reasonable basis, reflecting the REIT's best estimates and judgement. However, 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 this press release. Accordingly, readers should not place undue reliance on forward-looking statements. For a detailed discussion of risks and uncertainties affecting the REIT, refer to Risks and Uncertainties in Section VI of the MD&A contained in the REIT's 2024 Annual Report.

Except as specifically required by applicable Canadian securities law, the REIT 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 the REIT's views as of any date subsequent to the date of this press release.

For further information:

Mark Kenney	Jenny Chou
Chief Executive Officer	Chief Financial Officer
Email: m.kenney@capreit.net	Email: j.chou@capreit.net

Category: Earnings