European Residential Real Estate Investment Trust

Good morning all and welcome to the European Residential Real Estate Investment Trust fourth quarter 2023 results conference call. All lines have been placed on mute during the presentation portion of the call with an opportunity for question and answer at the end. If you would like to ask a question, please press start followed by one on your telephone keypad. I would now like to turn this conference call over to our host, Nicole Dolan from the Investor Relations team. 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 eRES, which are subject to certain risks and uncertainties. We direct your attention to slide two 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 get started with slide four. Our operational performance remained strong in 2023. Occupancies were held as high as possible throughout the year, with 98.5% of residential suites occupied on December 31st, 2023. relatively consistent with 98.4% occupancy as of December 31, 2022. We've always maintained a minor and ongoing level of vacancy, and this is the result of our operational strategy. At any given time, the majority of our vacancy relates to suites that we intentionally keep offline upon turnover in order to perform value-adding renovation work. which will drive further rent growth once the suites are relapsed. We're also keeping certain suites vacant upon turnover and listing these for sale as part of our portfolio optimization and capital recycling objectives. Occupied AMR grew by 7.2% to €1,063 as of year-end. This is once again well above our target range of 3-5%. This reflects the increasingly robust rental market fundamentals we are still experiencing in the Netherlands, with record growth of the Dutch population continuing to outstrip the pace of new housing supply. It also demonstrates the merits of our rent growth strategy and our ability to efficiently maneuver within a complex and ever-changing regulatory framework. Our strategy is comprised of uplifts on indexation and turnover and the conversion of regulated suites to liberalized. This year, our indexation was 4% and our weighted average increase on turnover was 20.4%. This compares to an indexation of 3% in 2022 and an uplift on turnover of 22%. Turning to slide five, I'll provide a brief update on the fourth quarter. On December 20th, we announced the conclusion of the strategic review process. The strategic review was first announced back in June 2023 and was undertaken to evaluate all value-enhancing alternatives available to eRIS to ultimately ensure you're actively maximizing value for our unit holders in every way that we can. Following the review, it was determined there was no proposal which achieved the objective of maximizing value as compared to our current strategy. As such, our focus remains on the execution of our proven operational platform, although we'll continue to explore additional liquidity-enhancing opportunities. That includes the potential divestiture of certain non-core suites or properties where lucrative and most accretive to net asset value exists. We only recently started to test the viability of this value surfacing strategy, and so we're pleased to have completed an additional 10 sales in the fourth quarter for 3.7 million euro in gross proceeds, which represents a significant premium to IFRS value. That brings the total individual suite sales to 14 residential units this year, And we're excited to see this accelerate on our progress on this initiative as we go through 2024. Our investment portfolio fair value decreased by 1.9% during the quarter to $1.68 billion as of December 31st, 2023. This was primarily due to persistent inflationary and interest rate pressures. as well as ongoing political and regulatory uncertainty in the Netherlands, partially offset by higher forward NOI. With this decrease in fair value, our NAV per diluted unit decreased to €2.90 as of year end. I'll now turn things over to Jenny to walk through our financial performance.