ERES Unitholders to Vote on CAPREIT's $1.19 All-Cash Buyout

TORONTO, ON – April 01, 2026 – European Residential Real Estate Investment Trust (TSX: ERE.UN), known as ERES, has taken a definitive step toward its acquisition by Canadian real estate giant CAPREIT. The company announced today it has filed its management information circular for a special meeting of unitholders, scheduled to take place virtually on April 27, 2026.

At the heart of the meeting is a crucial vote on a proposed all-cash transaction that would see an affiliate of Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) acquire all outstanding ERES units it does not already own. The consideration for unitholders is set at $1.19 per unit, marking the final stage of a significant strategic shift for both entities.

This move represents the culmination of ERES's planned wind-down as Canada’s only European-focused multi-residential REIT and a tactical consolidation for CAPREIT, which already holds a majority stake in the trust.

The Terms of the Arrangement

The transaction is structured as a plan of arrangement, detailed in an agreement dated March 2, 2026, and amended on March 20, 2026. For the deal to proceed, it requires substantial support from investors. The arrangement resolution must be approved by no less than two-thirds (66 2/3%) of the votes cast by all unitholders—including trust units and special voting units—voting together as a single class. Furthermore, it must secure a simple majority of the votes cast by public unitholders, excluding CAPREIT and its affiliates.

In a strong signal of confidence, the ERES Board of Trustees is unanimously recommending that public unitholders vote FOR the arrangement. This recommendation follows the unanimous endorsement of a special committee composed of independent trustees. The committee, supported by independent financial and legal advisors, conducted a thorough review and concluded that the arrangement is in the best interests of the REIT and that the $1.19 consideration is fair from a financial perspective.

Underscoring this assessment, a formal valuation conducted by Haywood Securities placed the fair market value of ERES units in a range between $1.05 and $1.25. The $1.19 offer sits comfortably within this valuation, a point that will likely feature heavily in unitholder considerations. Further fairness opinions were also provided by BMO Capital Markets and Haywood Securities, bolstering the board's position.

Unitholders of record as of March 16, 2026, will be eligible to vote. The proxy voting deadline is 10:00 a.m. (Toronto time) on April 24, 2026. Following the unitholder vote, the company anticipates seeking a final court order on April 29, 2026. If all conditions are met, the transaction is expected to close in the second quarter of 2026.

A Strategic Pivot for CAPREIT

While the acquisition brings ERES's European portfolio fully under CAPREIT's control, the move is less about aggressive European expansion and more about a strategic consolidation and eventual exit. CAPREIT, Canada’s largest publicly traded apartment landlord, spun off its European assets to create ERES in 2019, choosing to retain a significant stake while focusing on its domestic portfolio.

Since then, CAPREIT has signaled a clear intention to reduce its "non-core European exposure." Taking ERES private is the logical conclusion of this strategy. It grants CAPREIT full control over the remaining assets, streamlining the management and disposition process without the complexities of a publicly traded subsidiary. Management commentary from CAPREIT indicates that this consolidation will allow it to determine the future of the remaining assets in alignment with its long-term objectives, which are centered on its Canadian operations.

The ultimate goal appears to be the repatriation of capital. By gaining full control and managing the final wind-down of the Dutch portfolio, CAPREIT can efficiently unlock the remaining equity and reinvest it back into its core, pan-Canadian residential apartment market. For CAPREIT, this transaction is about tidying up its corporate structure and sharpening its focus on its primary market.

Value and Volatility in the Dutch Market

The ERES portfolio, valued at approximately €310.1 million as of year-end 2025, is concentrated in the Netherlands—a market defined by both opportunity and increasing regulatory pressure. The Dutch residential market is grappling with a severe structural housing shortage, estimated to be as high as 410,000 homes. This fundamental imbalance has fueled strong demand and significant price appreciation, with house prices climbing around 8.5% in 2025.

However, this attractive backdrop is complicated by a shifting regulatory landscape aimed at improving tenant affordability and security. The Affordable Rent Act, effective mid-2024, expanded rent controls to the mid-market segment, impacting over 300,000 homes. Simultaneously, the Fixed Rental Contracts Act made indefinite leases the default, limiting landlord flexibility.

These measures, while socially driven, have cooled investor sentiment and contributed to a "sell-off wave" as some private landlords exit the market. For institutional investors like ERES, this evolving environment introduces long-term risk and operational complexity. Against this backdrop of regulatory uncertainty, the all-cash offer from CAPREIT provides a clear and certain exit for ERES unitholders, de-risking their investment from the volatility of the Dutch rental market.

The Final Chapter for ERES Unitholders

For ERES investors, the upcoming vote is not just about the $1.19 per unit offer; it is the final chapter in a multi-year value enhancement strategy designed to systematically dissolve the trust and return capital to its backers. The board has framed this transaction as the "natural and constructive ending" to that process.

Viewed in isolation, the $1.19 price aligns with independent valuations. However, its true significance emerges when combined with previous distributions. Since 2024, ERES has returned approximately €1.90 per unit (equivalent to about C$2.96) to its investors through a series of special distributions from asset sales.

When added to the proposed $1.19 buyout price, the total capital returned to unitholders amounts to approximately $4.15 per unit. This figure represents a roughly 32% premium over the closing price of $3.15 on November 6, 2024, before the final phase of the wind-down strategy was initiated. This context transforms the vote from a simple assessment of a single offer to an endorsement of the entire strategic liquidation, which has successfully unlocked substantial value from the company's Dutch assets. The decision now rests with unitholders to formally approve this final, definitive step.