ERE.UN European Residetial Real Estate Investment Trust

European Residential Real Estate Investment Trust ("ERES" or the "REIT") (TSX: ERE.UN) announced today its results for the three months ended March 31, 2025.

ERES’s unaudited condensed consolidated interim financial statements and management's discussion and analysis ("MD&A") for the three months ended March 31, 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 three months ended March 31, 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 €90.0 million.
• 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 €337.3 million. The proceeds will be paid in cash, with a portion to be used to repay associated mortgage principal outstanding and amounts outstanding on the Revolving Credit Facility. Remaining net proceeds will be used for the payment of a special cash distribution of an estimated €0.80 per Unit. Subject to the receipt of any regulatory approvals and satisfaction of closing conditions, the announced disposition is anticipated to close between early August and mid-September 2025.
• Furthermore, the REIT is currently working with CBRE and Rubens Capital Partners, as financial and real estate advisors, to advise the REIT in connection with the launch of a bid process for the balance of the portfolio, whether in part or in full. Proposals are due to be received in the third quarter of 2025, and the Board, with assistance from its advisors, will determine which proposal(s), if any, achieve the objective of uncovering the maximum value of the REIT's remaining portfolio, and distributing the proceeds, net of wind-up costs, to Unitholders.

Operating Metrics

• Strong operating results continued into 2025, fuelled by strong rental growth. Same property portfolio Occupied Average Monthly Rents ("Occupied AMR") increased by 6.2%, from €1,175 as at March 31, 2024, to €1,248 as at March 31, 2025, demonstrating the REIT's continued achievement of rental growth.
• Same property turnover was 1.4% for the three months ended March 31, 2025, with rental uplift on turnover of 19.5%, compared to rental uplift of 17.6% on same property turnover of 3.7% for the three months ended March 31, 2024.
• Same property occupancy for the residential properties decreased to 93.6% as at March 31, 2025, compared to 99.0% as at March 31, 2024, primarily related to suites intentionally held vacant to maximize value. Same property occupancy for commercial properties decreased to 91.3% as at March 31, 2025, from 100.0% as at March 31, 2024, due to the expiration of one of the commercial leases.        
• Same property Net Operating Income ("NOI") margin decreased by 1.4% for the three months ended March 31, 2025, compared to the same period last year, primarily driven by increases in R&M costs and property management fees and decrease in revenue from investment properties due to higher vacancy.

Financial Performance

• Diluted Funds From Operations ("FFO") per Unit for the three months ended March 31, 2025 decreased by 53.8%, compared to the same period last year, primarily due to lower total portfolio NOI as a result of dispositions, partially offset by lower interest costs being incurred following repayment of debt using proceeds from dispositions.
• Diluted Adjusted Funds From Operations ("AFFO") per Unit for the three months ended March 31, 2025 decreased by 54.1%, compared to the same period last year, due to the same reasons mentioned above for the decrease in diluted FFO per Unit.

Financial Position and Liquidity

• Liquidity remained strong at €121.3 million, compared to €132.8 million as at prior year end. The slight decrease from prior year end was related to drawings from the Revolving Credit Facility to repay matured mortgages.
• During the three months ended March 31, 2025, the REIT repaid €90.1 million of mortgages payable with a weighted average effective interest rate of 1.73%, including €63.0 million resulting from dispositions.
• Debt coverage metrics are within covenant thresholds, with interest and debt service coverage ratios of 3.2x and 2.7x, respectively, and adjusted debt to gross book value ratio standing at 35.2%.
• As at March 31, 2025, the REIT's mortgage profile had a weighted average term to maturity of 2.6 years and a weighted average effective interest rate of 2.46%.

"So far this year, we have completed the sale of a total of 415 residential suites in the Netherlands for combined consideration of around €90 million, and we have entered into an agreement to sell a further 1,446 suites for aggregate proceeds, net of estimated adjustments, of approximately €337 million, with closing anticipated in the third quarter of 2025," commented Mark Kenney, Chief Executive Officer. "Subject to completion, what we have remaining is an attractive, predominantly urban-located European portfolio which we have expressly indicated we are seeking to sell, in order to ultimately return a maximum amount of net equity to the REIT's investors. Both the Board of Trustees and management are fully aligned on achieving this strategic wind-up in the near term, consistent with recent amendments made to the REIT's Declaration of Trust, and we're cohesively determined to take all steps as may be necessary or advisable to execute on this objective in the most accretive and punctual way possible."

"In the meantime, as we pursue various disposition and/or dissolution opportunities, our balance sheet remains strong and continues to support the exploration of our strategic options," added Jenny Chou, Chief Financial Officer. "Incremental mortgage principal was repaid during the period using net proceeds from dispositions, and our adjusted debt to gross book value ratio decreased further to 35.2% as of March 31, 2025. On the earnings front, ongoing vacancies associated with our strategic dispositions offset robust 6.2% growth in same property Occupied AMR, and operating revenues accordingly decreased by 0.7% versus the comparative period for the same property portfolio. That was exacerbated by higher operating costs due to elevated repairs and maintenance and property management fees, and our same property NOI margin was down to 75.0% for the current quarter. Due to significant disposition activities, partly offset by lower interest costs, our diluted FFO per Unit was also down to €0.018 for the period."

"In line with our firm commitment to value maximization, we are also announcing today that ERES is working with its financial and real estate advisors in connection with the launch of a bid process for the balance of the REIT's portfolio, whether in part or in full," said Gina Parvaneh Cody, Chair of the Board of Trustees. "The Board, with assistance from its advisors, will diligently and exhaustively evaluate all proposals, due to be received in the third quarter of 2025, and determine which proposal(s), if any, are in the best interests of the REIT and its investors. There is no assurance that the engagement of advisors or the bid process itself will result in any transaction(s), nor the potential terms or timing thereof, and we plan to disclose further developments regarding or arising from the bid process, if and when deemed necessary and/or appropriate. That all said, we can reaffirm that we are dedicated to moving this forward in a proficient, responsible and sufficiently prompt manner."

OPERATING RESULTS

Rental Rates

Total Property Portfolio	Suite Count		Occupied AMR/ABR1			Occupancy %
As at March 31,	2025	2024	2025	2024	AMR	2025	2024
			€	€	% Change
Residential Properties	2,594	6,862	1,248	1,068	16.9	93.6	98.5
Commercial Properties2			18.1	17.6	2.8	91.3	100.0

1 Average In-Place Base Rent ("ABR").2 Represents 392,904 square feet ("sq. ft.") of commercial gross leasable area ("GLA") as at March 31, 2025 (March 31, 2024 — 450,911 sq. ft.).

Same Property Portfolio	Suite Count1	Occupied AMR/ABR			Occupancy %
As at March 31,		2025	2024	AMR	2025	2024
		€	€	% Change
Residential Properties	2,594	1,248	1,175	6.2	93.6	99.0
Commercial Properties2		18.1	18.0	0.6	91.3	100.0

1 Same property suite count includes all suites owned by the REIT as at both March 31, 2025 and March 31, 2024, and excludes properties and suites disposed of as at March 31, 2025. 2 Includes 392,904 sq. ft. of same property commercial GLA, which excludes commercial GLA disposed of since March 31, 2024.

Occupied AMR for the same property portfolio as at March 31, 2025 increased by 6.2%, compared to €1,175 as at March 31, 2024, mainly driven by indexation and turnover. The REIT's achievement of strong growth in rental revenues demonstrates its ability to consistently operate in a complex and fluid regulatory regime. The Occupied ABR for the commercial properties for the same property portfolio increased from €18.0 as at March 31, 2024 to €18.1 as at March 31, 2025, driven by indexation.

Suite Turnovers

Total Portfolio Turnover

For the Three Months Ended March 31,	2025		2024
	Change in Monthly Rent	Turnovers2	Change in Monthly Rent	Turnovers2
	%	%	%	%
Weighted average turnovers1	19.5	1.3	15.6	3.1
Weighted average turnovers excluding service charge income	21.5	1.3	16.2	3.1

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 March 31,	2025		2024
	Change in Monthly Rent	Turnovers2	Change in Monthly Rent	Turnovers2
	%	%	%	%
Weighted average turnovers1	19.5	1.4	17.6	3.7
Weighted average turnovers excluding service charge income	21.5	1.4	18.6	3.7

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.

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%, which excludes the impact of the proposed temporary rent freeze on the Low Rent segment. 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 no lease renewal in the REIT's commercial portfolio during the three months ended March 31, 2025 and March 31, 2024.

Total Portfolio Performance

For the Three Months Ended March 31,	2025			2024
Operating Revenues (000s)	€	11,825		€	24,439
NOI (000s)	€	8,840		€	19,113
NOI Margin1		74.8	%		78.2	%
Weighted Average Number of Suites		2,846			6,874

1 Excluding service charge income and expense, the total portfolio NOI margin for the three months ended March 31, 2025 was 82.7% (three months ended March 31, 2024 — 83.5%).

Total portfolio operating revenues and NOI decreased by 51.6% and 53.7%, respectively, for the three months ended March 31, 2025, compared to the same period last year, 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 March 31, 2024.

For the three months ended March 31, 2025, the NOI margin on the total portfolio decreased to 74.8% compared to 78.2% for the same period last year (excluding service charges, total portfolio NOI margin decreased to 82.7% from 83.5% for the same period last year), which was primarily driven by increases in R&M costs and property management fees as a percentage of total operating revenues. Service charge expenses are fully recoverable from tenants via service charge income and therefore have a net nil 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 months ended March 31, 2025 and March 31, 2024.

(€ Thousands)
For the Three Months Ended March 31,	2025		2024
Same property NOI	€	8,542	€	8,757
NOI from dispositions and assets held for sale	298		10,356
Total NOI	€	8,840	€	19,113

Same Property Portfolio Performance1

For the Three Months Ended March 31,	2025			2024
Same Property Operating Revenues (000s)	€	11,386		€	11,462
Same Property NOI (000s)	€	8,542		€	8,757
Same Property NOI Margin2		75.0	%		76.4	%

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. For the three months ended March 31, 2025 and March 31, 2024, same property portfolio includes 2,594 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 months ended March 31, 2025 was 83.1% (three months ended March 31, 2024 — 84.7%).

Same property NOI for the three months ended March 31, 2025 decreased by 2.5% compared to the same period last year. Same Property NOI margin decreased to 75.0% for the three months ended March 31, 2025 compared to 76.4% for the same period last year (excluding service charges, same property NOI margin decreased to 83.1% compared to 84.7% for the same period last year). The decreases in same property NOI and NOI margins were primarily driven by increase in R&M costs and property management fees and decrease in revenue from investment properties due to higher vacancy.

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 Restricted Unit Rights ("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:

(€ Thousands, except per Unit amounts)
For the Three Months Ended March 31,	2025			2024
Net (loss) income and comprehensive (loss) income for the period	€	(37,168	)	€	22,821
Adjustments:
Net movement in fair value of investment properties and assets held for sale	20,022				2,310
Net movement in fair value of Class B LP Units	10,930				(19,265	)
Fair value adjustments of Unit-based compensation liabilities	(295		)		1,178
Interest expense on Class B LP Units	2,131				4,261
Deferred income tax expense (recovery)	2,927				(670	)
Foreign exchange (gain) loss	(26		)		214
Net gain on derivative financial instruments	(65		)		(638	)
Transaction costs on dispositions	1,194				125
Tax related to dispositions and tax authority reassessments1	3,788				389
Mortgage repayment costs2	354				—
Amortization related to accelerated vesting of RURs3	400				—
Gain from Unit Options forfeited on senior management termination4	—				(1,552	)
FFO	€	4,192		€	9,173
FFO per Unit – diluted5	€	0.018		€	0.039
Total monthly distributions declared6	€	3,517		€	7,012
FFO payout ratio6	83.9		%		76.4	%

1 Included in current income tax expense in the consolidated interim statements of net (loss) income and comprehensive (loss) income.2 Relate to repayment penalties and write-off of deferred financing costs and fair value adjustment related to mortgages repaid.3 Related to accelerated vesting of RURs on January 7, 2025.4 Represents Unit-based compensation financial liabilities written off during the three months ended March 31, 2024 due to Unit Options forfeited as a result of senior management termination.5 Includes Class B LP Units and the dilutive impact of unexercised Unit Options and RURs. 6 Includes interest on Class B LP Units.

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

(€ Thousands, except per Unit amounts)
For the Three Months Ended March 31,	2025			2024
FFO	€	4,192		€	9,173
Adjustments:
Actual non-discretionary capital investments	(22		)	(372		)
Leasing cost reserve1	(110		)	(127		)
AFFO	€	4,060		€	8,674
AFFO per Unit – diluted2	€	0.017		€	0.037
Total monthly distributions declared3	€	3,517		€	7,012
AFFO payout ratio3	86.6		%	80.8		%

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

Diluted FFO per Unit and Diluted AFFO per Unit for the three months ended March 31, 2025 decreased from the same period 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.

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:

(€ Thousands, except per Unit amounts)
As at	March 31, 2025			December 31, 2024			March 31, 2024
Unitholders' equity	€	222,534		€	261,024		€	447,774
Class B LP Units	230,442			219,512			231,289
Unit-based compensation financial liabilities	805			623			53
Net deferred income tax liability1	13,952			11,025			14,201
Net derivative financial asset2	(4,829		)	(5,925		)	(16,539		)
NAV	€	462,904		€	486,259		€	676,778
NAV per Unit – diluted3	€	1.97		€	2.07		€	2.89
NAV per Unit – diluted (in C$)3,4	C$	3.06		C$	3.09		C$	4.23

1  Represents deferred income tax liabilities of €14,006 net of deferred income tax assets of €54 as at March 31, 2025 (December 31, 2024 — deferred income tax liabilities of €18,925 net of deferred income tax assets of €7,900; March 31, 2024 — deferred income tax liabilities of €28,457 net of deferred income tax assets of €14,256).2  Represents non-current derivative financial assets of €4,829 as at March 31, 2025 (December 31, 2024 — non-current and current derivative financial assets of €5,904 and €21, respectively; March 31, 2024 — non-current and current derivative financial assets of €16,021 and €518, 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 1.5533 on March 31, 2025 (foreign exchange rate of 1.4929 and 1.4616 on December 31, 2024 and March 31, 2024, respectively).

Other Financial Highlights

For the Three Months Ended March 31,	2025	2024
Weighted Average Number of Units – Diluted (000s)1	234,812	233,754

        

As at	March 31, 2025		December 31, 2024		March 31, 2024
Closing Price of REIT Units2, 3	€	1.62	€	2.55	€	1.63
Closing Price of REIT Units (in C$)3	C$	2.52	C$	3.80	C$	2.38
Market Capitalization (millions)2, 3, 4	€	380	€	597	€	381
Market Capitalization (millions in C$)3, 4	C$	591	C$	891	C$	556

1  Includes Class B LP Units and the dilutive impact of unexercised Unit Options and RURs. 2  Based on the foreign exchange rate of 1.5533 on March 31, 2025 (foreign exchange rate of 1.4929 on December 31, 2024 and 1.4616 on March 31, 2024). 3  The December 31, 2024 closing price of REIT Units and market capitalization did not reflect the €1.00 per Unit special distribution paid on the same date with the ex-distribution date of January 2, 2025.4  Includes Class B LP Units.

FINANCIAL POSITION AND LIQUIDITY

As at	March 31, 2025			December 31, 2024			March 31, 2024
Ratio of Adjusted Debt to Gross Book Value1	35.2		%	39.7		%	57.3		%
Debt Service Coverage Ratio (times)1,2	2.7		x	2.6		x	2.4		x
Interest Coverage Ratio (times)1,2	3.2		x	3.2		x	2.9		x
Weighted Average Mortgage Effective Interest Rate3	2.46		%	2.27		%	2.22		%
Weighted Average Mortgage Term (years)	2.6			2.5			2.7
Available Liquidity (000s)4	€	121,346		€	132,770		€	36,531

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 €7.8 million and unused credit facility capacity of €113.6 million as at March 31, 2025 (cash and cash equivalents of €7.8 million and unused credit facility capacity of €125.0 million as at December 31, 2024; cash and cash equivalents of €9.5 million and unused credit facility capacity of €27.0 million as at March 31, 2024).

For the three months ended March 31, 2025, ERES's liquidity remained strong at €121.3 million, compared to €132.8 million as at the prior year end. The slight decrease from prior year end was related to drawings from the Revolving Credit Facility to repay matured mortgages. The REIT's immediately available liquidity of €121.3 million as at March 31, 2025 excludes the €25.0 million accordion feature on the Revolving Credit Facility. As at March 31, 2025, the REIT's mortgage profile had a weighted average term to maturity of 2.6 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 2.7x and 3.2x, respectively, and adjusted debt to gross book value ratio well within its target range at 35.2%.

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 renewed credit agreement dated June 19, 2024 between the REIT and three Canadian chartered banks, providing access to up to €125.0 million with an accordion feature to increase the limit a further €25.0 million upon satisfaction of conditions set out in the agreement and the consent of applicable lenders (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 months ended March 31, 2025, the REIT declared monthly distributions of €0.005 per Unit (being equivalent to €0.06 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 months ended March 31, 2024 — €0.010 per Unit (being equivalent to €0.12 per Unit annualized)).

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, May 8, 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 708115.

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 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 March 31, 2025, ERES owned 2,594 residential suites 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 €729.1 million.

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 ("€"), the functional currency of the REIT. The REIT's unaudited condensed consolidated interim financial statements and the notes thereto for the three months ended March 31, 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 months ended March 31, 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 months ended March 31, 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:

(€ Thousands)
As at	March 31, 2025			December 31, 2024			March 31, 2024
Mortgages payable1	€	254,424		€	344,181		€	889,270
Revolving Credit Facility2	11,186			(290		)	97,785
Total Debt	€	265,610		€	343,891		€	987,055
Fair value adjustment on mortgages payable	(69		)	(92		)	(716		)
Adjusted Total Debt as Defined by Declaration of Trust	€	265,541		€	343,799		€	986,339
Gross Book Value3	€	755,397		€	865,374		€	1,722,474
Ratio of Adjusted Debt to Gross Book Value	35.2		%	39.7		%	57.3		%

1  Represents non-current and current mortgages payable of €247,889 and €6,535, respectively, as at March 31, 2025 (December 31, 2024 — non-current and current mortgages payable of €310,682 and €33,499, respectively; March 31, 2024 — non-current and current mortgages payable of €698,107 and €191,163, 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:

(€ Thousands)
For the Three Months Ended	Q1 25			Q4 24			Q3 24			Q2 24			Q1 24			Q4 23			Q3 23			Q2 23
Net (loss) income and comprehensive (loss) income	€	(37,168	)	€	(52,390	)	€	(52,126	)	€	17,407		€	22,821		€	(35,917	)	€	24,784		€	3,252
Adjustments:
Net movement in fair value of investment properties and assets held for sale	20,022			(13,873		)	(39,352		)	(11,107		)	2,310			35,337			24,768			45,398
Net movement in fair value of Class B LP Units	10,930			(86,511		)	80,240			(5,506		)	(19,265		)	8,218			(39,339		)	(31,964		)
Fair value adjustments of Unit-based compensation liabilities	(295		)	362			203			(226		)	1,178			(194		)	(463		)	(513		)
Net loss (gain) on derivative financial instruments	(65		)	3,088			4,480			198			(638		)	6,304			640			(728		)
Foreign exchange (gain) loss	(26		)	—			—			228			214			224			213			210
Interest expense on Class B LP Units	2,131			146,302			4,261			4,261			4,261			4,261			4,261			4,261
Interest on mortgages payable	1,681			3,301			4,373			4,832			4,558			4,608			4,607			3,843
Interest on Revolving Credit Facility	253			528			734			1,210			1,335			1,422			1,336			1,237
Interest on promissory notes	—			—			—			—			—			—			—			70
Amortization	173			621			176			138			144			246			150			202
Transaction losses	1,194			2,567			1,547			380			125			58			19			—
Costs associated with repayment of mortgages	354			1,306			1,206			—			—			—			—			—
Income tax expense (recovery)	7,664			8,796			10,481			5,253			1,308			(8,143		)	(5,081		)	(9,647		)
Adjusted EBITDAFV	€	6,848		€	14,097		€	16,223		€	17,068		€	18,351		€	16,424		€	15,895		€	15,621
Cash taxes	(4,737		)	(4,400		)	(1,756		)	(2,436		)	(1,978		)	(2,395		)	(1,251		)	(1,235		)
Tax related to dispositions and tax authority reassessments	3,788			3,124			277			731			389			234			80			—
Adjusted EBITDAFV less cash taxes	€	5,899		€	12,821		€	14,744		€	15,363		€	16,762		€	14,263		€	14,724		€	14,386

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.

(€ Thousands)
As at	March 31, 2025		December 31, 2024		March 31, 2024
Principal amortization repayments1	€	1,332	€	1,776	€	2,093
Interest on mortgages payable1	14,187		17,064		17,616
Interest on Revolving Credit Facility1	2,725		3,807		5,330
Interest on promissory notes1	—		—		70
Debt service payments	€	18,244	€	22,647	€	25,109
Adjusted EBITDAFV less cash taxes1	€	48,827	€	59,690	€	60,135
Debt Service Coverage Ratio (times)	2.7x		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.

(€ Thousands)
As at	March 31, 2025		December 31, 2024		March 31, 2024
Interest on mortgages payable1	€	14,187	€	17,064	€	17,616
Interest on Revolving Credit Facility1	2,725		3,807		5,330
Interest on promissory notes1	—		—		70
Interest expense	€	16,912	€	20,871	€	23,016
Adjusted EBITDAFV1	€	54,236	€	65,739	€	66,291
Interest Coverage Ratio (times)	3.2x		3.2x		2.9x

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