European Residential Real Estate Investment Trust

Good day. My name is Karen and I'll be your conference operator today. At this time, I'd like to welcome everyone to the European Residential Real Estate Investment Trust second quarter 2023 results conference call. All lines have been placed on mute to prevent any background noise. After the speakers, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star and one again. Thank you. I would now like to turn the call over to Nicole Dolan, Investor Relations. Nicole, please go ahead.

Thank you, Operator, and good morning, everyone. Before we begin, let me remind everyone that during our conference call this morning, we may include forward-looking statements about expected future events and the financial and operating results of eRIS, which are subject to certain risks and uncertainties. We direct your attention to slide 3 and our other regulatory filings for important information about these statements. I will now turn the call over to Mark Kenney, Chief Executive Officer.

Thanks, Nicole, and good morning, everyone. Joining me this morning is Jenny Chow, our Chief Financial Officer, and Karim Farooq, our Managing Director. Let's begin with our operational results. On slide five, you can see that strong performance continued in Q2. We achieved 6% growth in our occupied average monthly rents and residential occupancy remained high at 98.6%. This excludes the impact of 2023 lease renewals, which become effective on July 1st of every year. Rental increases Due to indexation beginning this past July 1, 2023, we served tenant notices to 97% of our residential portfolio, and the average rental increase was 4%. This is up from 3% in the prior year period, which we will see positively impact next quarter's operational results. Slide 6 provides our quarterly update. In June, we secured 76.5 million euros in mortgage financing, which carries a fixed interest rate of 4.66% for a six-year term to maturity. On our investment properties, fair value decreased by 2.3% to 1.74 billion euros. Higher forward NOI was offset by an expansion in the portfolio's capitalization rate This was a result of ongoing inflationary and interest rate pressures, as well as heightened regulatory uncertainty. On the latter, the Dutch government recently dissolved, making the proposed regulation of the mid-market rental sector even more uncertain at this time. Parliament is expected to provide clarity on its enactment by mid-September. The depreciation of our portfolio contributed to the decrease in our diluted NAV per unit to €3.15 at June 30, 2023. This remains above the price of our units in the market, which offers value in addition to providing one of the highest distribution yields in our peers' universe, currently at around 6%. We also recently announced that we are undergoing a strategic review process in line with our active commitment to maximizing value for e-residence unit holders. This remains in progress as we continue to explore every possible avenue to achieve that. I will now turn things over to Jenny to go through our financial results in detail.