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European Residential Real Estate ate Investment Trust (TSE:ERE.UN)
TSX:ERE.UN
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European Residential Real Estate ate Investment Trust (ERE.UN) AI Stock Analysis

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TSE:ERE.UN

European Residential Real Estate ate Investment Trust

(TSX:ERE.UN)

Rating:44Neutral
Price Target:
C$2.50
▲(2.88% Upside)
The overall stock score is primarily impacted by weak financial performance, characterized by declining revenue, high leverage, and poor cash flow management. Technical analysis indicates bearish momentum, further weighing on the score. While the high dividend yield is a positive aspect, it is overshadowed by the company's financial instability and negative P/E ratio.

European Residential Real Estate ate Investment Trust (ERE.UN) vs. iShares MSCI Canada ETF (EWC)

European Residential Real Estate ate Investment Trust Business Overview & Revenue Model

Company DescriptionEuropean Residential Real Estate Investment Trust (ERE.UN) is a growth-oriented real estate investment trust focused on acquiring and managing a diversified portfolio of high-quality, multi-residential properties across Europe. With a strong emphasis on urban centers, ERE.UN aims to deliver long-term value to its investors by leveraging its expertise in property management and residential real estate markets.
How the Company Makes MoneyEuropean Residential Real Estate Investment Trust generates revenue primarily through rental income from its residential property portfolio. The company focuses on acquiring properties in desirable urban locations across Europe, where demand for housing is high, thus securing stable and recurring rental income. ERE.UN also benefits from property appreciation, which can contribute to increased asset values and potential capital gains upon property sales. Additionally, the company may engage in strategic partnerships and joint ventures to optimize its property management operations and expand its portfolio, further enhancing its revenue streams.

European Residential Real Estate ate Investment Trust Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q3-2024)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong rent growth and significant asset sales, which are expected to enhance liquidity and reduce debt. However, increased vacancies, decreased NOI margin, and a decline in FFO per unit indicate challenges in maintaining operational efficiency. Overall, the strategic initiatives seem poised to maximize unitholder value, but the execution of these strategies and market conditions will be critical moving forward.
Q3-2024 Updates
Positive Updates
Strong Rent Growth
Average monthly rent increased by 8.4% to EUR 11.41 across all occupied suites by September 30, 2024.
Significant Asset Sales
Announced agreements for the sale of 3,179 residential suites in the Netherlands for approximately EUR 739 million, expected to close by early Q1 2025.
Fair Value Gain
Recognized a fair value gain of EUR 39.4 million, with diluted NAV per unit increasing slightly to EUR 3.01.
Debt Reduction
Debt-to-market value ratio decreased to 53% from 58% at the previous year-end, achieved through redeployment of net disposition proceeds.
Improved Liquidity
Available liquidity increased to nearly EUR 90 million at period end.
Negative Updates
Increased Vacancies
Vacancy rate increased with 95.1% of residential suites occupied at period end, as part of the strategic disposition program.
Decreased Same-Property NOI Margin
Same-property NOI margin decreased to 76.7% from 78.4% compared to the prior year quarter.
Decline in Diluted FFO per Unit
Diluted FFO per unit decreased by 4.8% to EUR 0.04 for the third quarter, primarily due to lower total NOI from dispositions.
Increased Property Operating Costs
Property operating costs increased as a percentage of operating revenues.
Company Guidance
In the third-quarter 2024 earnings call for European Residential Real Estate Investment Trust (ERES), the company provided detailed guidance on its ongoing strategic initiatives. The average monthly rent saw an increase of 8.4% to EUR 11.41, despite a slight rise in vacancies to 95.1% as part of a value maximization strategy. ERES announced agreements to sell 3,179 residential suites in the Netherlands for approximately EUR 739 million, representing about half of its total portfolio. This is expected to close by early Q1 2025, with the proceeds aimed at reducing debt and funding a special cash distribution for unitholders. Year-to-date, ERES also disposed of properties worth EUR 116 million and generated EUR 23 million from selling individual suites. The REIT recorded a fair value gain of EUR 39.4 million this quarter, with the diluted NAV per unit slightly increasing to EUR 3.01. Despite these transactions, the same-property NOI margin dropped to 76.7%, and diluted FFO per unit decreased by 4.8% to EUR 0.04. The debt-to-market value ratio improved, falling to 53% from 58% due to the redeployment of disposition proceeds. Looking forward, ERES plans to use part of the proceeds from upcoming sales to further pay down debt, enhancing its financial stability.

European Residential Real Estate ate Investment Trust Financial Statement Overview

Summary
The company's financial performance is challenged by declining revenues and net losses, high leverage, and negative return on equity. Despite these issues, stable operating cash flows provide some liquidity support.
Income Statement
60
Neutral
The company's income statement shows declining revenue and profitability. The TTM (Trailing-Twelve-Months) revenue dropped compared to the previous annual period. Additionally, the net profit margin is negative due to significant net losses, and there is a notable decrease in EBIT and EBITDA margins. However, the gross profit margin remains relatively stable, indicating consistent cost management.
Balance Sheet
55
Neutral
The balance sheet reflects high leverage with a debt-to-equity ratio indicating significant reliance on debt financing. The equity ratio has decreased over time, signaling reduced financial stability. Negative return on equity suggests inefficiency in generating profits from shareholders’ equity. There is a concerning downward trend in stockholders' equity.
Cash Flow
65
Positive
The cash flow statement reveals relatively stable operating cash flows, although there is a drop in free cash flow growth. The company maintains positive operating cash flow to net income ratio, suggesting better cash generation than accounting earnings indicate. However, free cash flow to net income ratio is strained due to negative net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue80.35M92.97M95.68M89.25M76.87M69.88M
Gross Profit60.85M72.87M75.13M68.98M59.52M53.27M
EBITDA81.78M141.51M-128.84M142.19M49.93M43.51M
Net Income-124.28M-64.29M-114.23M116.42M96.14M118.66M
Balance Sheet
Total Assets755.40M865.37M1.72B1.94B1.89B1.50B
Cash, Cash Equivalents and Short-Term Investments7.80M7.77M6.89M10.89M10.35M10.72M
Total Debt265.61M343.89M992.49M964.87M885.33M710.24M
Total Liabilities532.86M604.35M1.30B1.39B1.45B1.15B
Stockholders Equity222.53M261.02M427.25M550.15M441.76M353.72M
Cash Flow
Free Cash Flow34.73M44.09M35.23M34.82M34.70M30.32M
Operating Cash Flow43.66M54.88M55.21M58.81M54.12M41.26M
Investing Cash Flow957.76M881.24M-14.79M-113.01M-191.22M-78.39M
Financing Cash Flow-1.00B-935.24M-44.42M54.74M136.72M36.54M

European Residential Real Estate ate Investment Trust Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price2.43
Price Trends
50DMA
2.49
Negative
100DMA
2.48
Negative
200DMA
2.41
Positive
Market Momentum
MACD
-0.03
Negative
RSI
46.63
Neutral
STOCH
31.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERE.UN, the sentiment is Neutral. The current price of 2.43 is below the 20-day moving average (MA) of 2.44, below the 50-day MA of 2.49, and above the 200-day MA of 2.41, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 46.63 is Neutral, neither overbought nor oversold. The STOCH value of 31.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ERE.UN.

European Residential Real Estate ate Investment Trust Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
C$2.17B3.8719.03%3.99%5.82%83.08%
68
Neutral
C$991.96M10.584.86%3.99%3.93%-29.40%
64
Neutral
C$500.54M7.185.89%3.81%-0.69%
63
Neutral
$7.06B14.07-0.50%6.96%4.08%-25.24%
56
Neutral
C$1.87B-7.49%2.94%1.56%-9446.15%
52
Neutral
C$680.15M-10.24%4.50%-1.10%61.83%
44
Neutral
C$564.73M-43.99%65.84%-20.65%-629.60%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ERE.UN
European Residential Real Estate ate Investment Trust
2.43
0.86
54.78%
TSE:IIP.UN
InterRent REIT Un
13.38
1.18
9.67%
TSE:KMP.UN
Killam Apartment REIT Un
17.97
-1.27
-6.60%
TSE:MRG.UN
Morguard NA REIT UN
18.96
1.64
9.47%
TSE:HOM.UN
BSR Real Estate Investment Trust
17.43
0.13
0.75%
TSE:MI.UN
Minto Apartment Real Estate Investment Trust
13.57
-2.50
-15.56%

European Residential Real Estate ate Investment Trust Corporate Events

DividendsBusiness Operations and Strategy
ERES Announces Final Monthly Distribution Amid Strategic Shift
Negative
Aug 15, 2025

European Residential Real Estate Investment Trust (ERES) has declared its final regular monthly distribution for August 2025, marking a significant shift in its financial strategy. This decision follows the board’s announcement to cease regular distributions pending certain asset dispositions, potentially impacting stakeholders and signaling a strategic pivot in ERES’s operations.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.00 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
European Residential REIT Reports Q2 2025 Results Amid Strategic Property Sales
Neutral
Aug 6, 2025

European Residential REIT has reported its second quarter 2025 results, highlighting significant strategic initiatives including the sale of multiple residential and commercial properties in the Netherlands, Belgium, and Germany. These transactions are part of a broader strategy to optimize their portfolio and potentially distribute proceeds to Unitholders. Despite a decrease in occupancy rates and net operating income due to intentional vacancies for value maximization, the REIT has achieved rental growth. However, financial performance has been impacted by a decrease in funds from operations due to property dispositions, although this was partially offset by reduced interest costs.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
European Residential REIT Announces Strategic Property Dispositions and Financial Results for Q2 2025
Negative
Aug 6, 2025

ERES reported its second quarter 2025 results, highlighting significant strategic initiatives, including the sale of multiple properties in the Netherlands and Belgium, with further sales agreements in place for properties in Germany. These transactions are part of a broader strategy to maximize value through asset disposition, leading to a potential special distribution to unitholders. The REIT’s operational metrics showed a decrease in occupancy rates and net operating income margins due to intentional vacancies and higher repair costs, while financial performance saw a notable decline in funds from operations due to reduced portfolio size.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

M&A TransactionsDividendsBusiness Operations and Strategy
ERES Announces Strategic Dispositions and Distribution Update
Neutral
Jul 31, 2025

ERES announced updates on its strategic dispositions, including the sale of residential suites in the Netherlands and commercial properties in Belgium and Germany, totaling approximately €52.8 million. The company plans to cease its regular monthly distributions and intends to declare a special distribution, contingent on the completion of these sales. These moves are part of ERES’s strategy to optimize its portfolio and maximize returns for stakeholders, although there are no assurances on the completion of these transactions.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Hold with a C$3.90 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

DividendsBusiness Operations and Strategy
ERES Announces July 2025 Monthly Distribution
Positive
Jul 15, 2025

ERES has declared a July 2025 monthly cash distribution of €0.005 per Unit and Class B LP Unit, equivalent to €0.06 per Unit annualized, payable on August 15, 2025. This distribution, denominated in Euros, will be converted to Canadian dollars for payment, with registered Unitholders having the option to receive it in Euros. ERES continues its commitment to regular monthly distributions, reflecting its stable financial positioning and ongoing strategy to provide consistent returns to its stakeholders.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

DividendsBusiness Operations and Strategy
ERES Announces June 2025 Cash Distribution
Positive
Jun 16, 2025

European Residential Real Estate Investment Trust (ERES) has announced a June 2025 monthly cash distribution of €0.005 per Unit and Class B LP Unit, equivalent to €0.06 annualized. This distribution, payable on July 15, 2025, will be in Canadian dollars, with an option for registered Unitholders to elect payment in Euros. This announcement underscores ERES’s commitment to regular monthly distributions, reflecting its stable financial operations and strategic focus on European real estate.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
ERES Secures Strong Support at 2025 Annual Meeting
Positive
Jun 4, 2025

At the 2025 Annual Meeting, European Residential Real Estate Investment Trust (ERES) announced that all items of business were approved by a significant majority of votes. The election of trustees and the re-appointment of auditors were confirmed, with nominees receiving over 96% of votes in favor. This strong support reflects confidence in ERES’s strategic direction and management, reinforcing its position in the European real estate market.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 20, 2025