Mr. Mark Kenney reports

ERES ANNOUNCES A FURTHER EUROS362 MILLION IN STRATEGIC DISPOSITIONS

European Residential Real Estate Investment Trust has provided the following update (all amounts disclosed herein exclude transaction costs and other adjustments):

1. A subsidiary of European Residential has entered into an agreement with an affiliate of Fortress Investment Group to sell entities owning 1,446 residential suites in the Netherlands for aggregate proceeds, net of an adjustment for deferred taxes and other adjustments, of approximately 337 million euros. The Fortress affiliate has represented to European Residential that an investor group which includes funds managed by affiliates of Fortress Investment Group will be the beneficiary of the acquisition.
2. Certain subsidiaries of European Residential have completed the sale of an entity owning one 104-suite property in the Netherlands for proceeds of approximately 25 million euros.
3. To date in 2025, other subsidiaries of European Residential have closed on the previously announced sales of a total of 311 residential suites in the Netherlands for combined consideration of approximately 65 million euros.

The pending disposition

The aggregate sale price for the pending disposition will be paid in cash, with proceeds to be used by European Residential and its subsidiaries in part to repay approximately 174 million euros in mortgage debt. Such mortgages currently have a weighted-average effective interest rate of approximately 2.2 per cent per annum.

The remaining net proceeds from the pending disposition are intended to finance: (i) the repayment of amounts outstanding on the revolving credit facility; and (ii) a special distribution to the REIT's unitholders of an estimated 0.80 euro per REIT unit (equivalent to an estimated $1.24 per unit based on the foreign exchange rate of 1.55 on April 1, 2025), with a corresponding distribution to be declared on the exchangeable Class B limited partnership units of ERES Limited Partnership, payable in cash to unitholders, and holders of the Class B LP units of record at a date to be determined.

European Residential has received a deposit in the amount of approximately 17 million euros in connection with the execution of the disposition agreement. Notwithstanding the deposit, there can be no assurance that the pending disposition will close.

Subject to the receipt of any regulatory approvals and satisfaction of closing conditions, the pending disposition is anticipated to close between early August and mid-September, 2025. There can be no assurance that all requirements for closing will be obtained, satisfied or waived.

The use of proceeds described in this press release, including the amount and timing of the special distribution, assumes the completion of the pending disposition on the time frame disclosed herein. European Residential will announce the timing and final amount of the special distribution at a later date, shortly following closing of the pending disposition, subject to the discretion of the board of trustees of the REIT.

The completed disposition

The completed disposition closed in March, 2025, and the sale price was settled in cash, with net proceeds redeployed in part to repay outstanding mortgage debt, which had an effective interest rate of approximately 1.3 per cent per annum for a remaining term to maturity of approximately 2.5 years.

Pro forma

The following table sets out consolidated financial metrics of the REIT as of the date of the latest financial statements and after adjusting as outlined below:

1. Dec. 31, 2024, after adjusting for the estimated effect of the completed dispositions;
2. Dec. 31, 2024, after adjusting for the estimated effect of the completed dispositions, the pending disposition and payment of the special distribution.

"We're pleased to continue to strategically and systematically dispose of our properties at strong pricing and surface significant additional liquidity that we're planning to distribute to unitholders directly through another special cash distribution," commented Mark Kenney, chief executive officer of European Residential. "After completion, our remaining portfolio will be comprised of an attractive collection of 10 multiresidential properties, the majority of which are located in the high-growth Randstad region in the Netherlands, along with two commercial properties."

Future outlook

The board has determined that, moving forward, it is in the best interests of the REIT and its unitholders to maximize the value of the remaining portfolio through continuing property or portfolio sales and/or a sale of the REIT, subject, where applicable, to unitholder approval. The board has therefore authorized the REIT to commence a process pursuant to which the REIT will explore all options available to surface the value of the remaining portfolio and distribute the proceeds, net of windup costs, to its unitholders. The costs associated with the windup, liquidation, dissolution, or any such similar action to terminate or sell the REIT after or as part of any property or portfolio sales will impact the net proceeds available for distribution and may be significant.

"Looking ahead, in line with our commitment to value maximization, the board considers it to be in the best interests of the REIT and its unitholders to uncover the residual value of the platform and return that net equity to investors," said Dr. Gina Parvaneh Cody, chair of the board. "Accordingly, consistent with the recent amendments to the REIT's declaration of trust, the board has authorized management to take all steps as may be necessary or advisable to execute on the continued disposition of the REIT's properties and/or effect a sale of the REIT, and we are confident in management's ability to action this in a responsible, disciplined and timely manner."

The description of the disposition agreement in this news release is a summary only and is qualified in its entirety by the terms of the disposition agreement. Pursuant to the disposition agreement, European Residential has made certain representations and warranties to the purchaser and has agreed to indemnify the purchaser in certain circumstances. Further details regarding the terms of the pending disposition are set out in the disposition agreement, which will be filed by the REIT on SEDAR+. European Residential encourages review of the full text of the disposition agreement.

About European Residential Real Estate Investment Trust

European Residential is an unincorporated, open-ended real estate investment trust. European Residential's units are listed on the Toronto Stock Exchange under the symbol ERE.UN. European Residential is Canada's only European-focused multiresidential REIT, with a current portfolio of high-quality, multiresidential real estate properties in the Netherlands. As at Dec. 31, 2024, European Residential owned 3,009 residential suites, including 311 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 838.7 million euros, including approximately 64.7 million euros of assets held for sale.

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