/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
TORONTO, Dec. 18, 2019 /CNW/ - European Residential Real
Estate Investment Trust (TSX-V:ERE.UN, "ERES") announced today that
it has closed its previously announced issue and sale of 30,915,400
trust units (the "Units") at a price of C$4.65 per Unit for aggregate gross proceeds of
C$143,756,610 (the "Offering"), which
includes the exercise in full of the over-allotment option. The
Offering was sold through a syndicate of underwriters led by RBC
Capital Markets on a bought-deal basis. Additionally, ERES
announced the closing of its previously announced acquisition of a
Netherlands property (the
"Kameleon Property") for approximately €105 million (excluding
transaction costs and other adjustments).
The Kameleon Property is a 17-storey property, consisting of 222
residential suites, approximately 9,900 square meters of ancillary
retail space and 432 indoor parking spaces. The property,
which was built in 2012, is located in southeast Amsterdam, in close proximity to the city
centre and has direct access to the city's extensive train
network.
The acquisition of the Kameleon Property, which closed on
December 16, 2019, was financed with:
(i) a promissory note issued to CAPREIT (the "CAPREIT Promissory
Note") in the principal amount of approximately €37 million; (ii) a
draw on ERES's existing credit facility of approximately €20
million and (iii) a €50 million draw on a new one-year €50 million
credit facility that ERES entered into with two Canadian chartered
banks (the "New Credit Facility").
ERES intends to use the net proceeds of the Offering:
i.
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to repay the €50
million drawn on the New Credit Facility;
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ii.
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to repay €23 million
drawn on ERES's existing credit facility (including €20 million
drawn to finance the acquisition of the Kameleon
Property);
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iii.
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to repay
approximately €22 million of the approximately €37 million CAPREIT
Promissory Note; and
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iv.
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the remainder, to
finance future acquisitions, to repay indebtedness, for
revenue-enhancing capital expenditures, and for general trust
purposes.
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The Kameleon Property, the New Credit Facility, and the CAPREIT
Promissory Note are described in more detail in ERES's press
release dated December 9, 2019.
CAPREIT purchased 5,377,000 Units as a part the Offering,
representing approximately C$25
million. As a result, CAPREIT now holds an
approximately 66% effective interest in ERES through its ownership
of 10,197,000 Units and 142,040,821 class B limited partnership
units of ERES Limited Partnership (the "Class B LP Units"), a
subsidiary of ERES (assuming all the Class B LP Units are converted
into trust 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
142,040,821 Class B LP Units and 4,820,000 Units, representing
approximately 74% of the then issued and outstanding Units and
Class B LP Units.
As a result of the acquisition of the Kameleon Property and the
closing of the Offering, ERES's total assets have grown to
approximately €1.4 billion and its market capitalization has grown
to approximately C$1.1 billion
(assuming all the Class B LP Units are converted into Units).
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's profile on the
SEDAR website at www.sedar.com.
ABOUT ERES
ERES is an unincorporated, open-ended real estate investment
trust. ERES's 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 131 multi-residential
properties, comprised of 5,632 suites and ancillary retail space
located in the Netherlands, and
owns two office properties in Germany and one office property in
Belgium.
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.
ABOUT CAPREIT
Canadian Apartment Properties REIT ("CAPREIT") is one of
Canada's largest real estate
investment trusts managing approximately 64,000 residential rental
apartment and townhouse suites and manufactured home community
sites in major urban centres across Canada, the
Netherlands, and Ireland.
Since its Initial Public Offering in May
1997, CAPREIT has grown monthly cash distributions per Unit
by 93%. 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 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's current expectations
and projections about future results, including but not limited to,
the intended use of net proceeds of the Offering. 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's 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.
Investors are cautioned that, except as disclosed in the final
short form base shelf prospectus of the REIT dated August 19, 2019 (the "Base Shelf
Prospectus") or the prospectus supplement to the Base Shelf
Prospectus dated December 11, 2019,
any information released or received with respect to the Offering
or the acquisition of the Kameleon Property may not be accurate or
complete and should not be relied upon.
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 Kameleon Property acquisition or the
Offering and have neither approved nor disapproved the contents of
this news release.
SOURCE European Residential Real Estate Investment Trust