CAPREIT Closes on $279M Dutch Multifamily Sale

The Canadian REIT’s portfolio acquisition creates Canada's first Europe-focused multifamily REIT. A second bundle of residential assets valued at $110.6 million will change hands in August.
Amsterdam. Image courtesy of Pixabay

Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) has closed on its €232 million ($278.7 million) sale of a 26-property Dutch multifamily portfolio to European Residential Real Estate Investment Trust (ERES), a deal that gives the Canadian REIT majority ownership and control of the European trust.

Announced in April, the deal for the 1,257-unit portfolio creates Canada’s first European-focused multifamily REIT. CAPREIT also agreed to sell a bundle of 21 properties totaling 511 residential suites in the Netherlands to ERES, a transaction that is expected to close by late August. The market value of the second portfolio was estimated at approximately €98.6 million ($110.6 million).

Following the transaction, CAPREIT now owns about 88 percent of the issued and outstanding units of the European residential REIT, which has already changed its name from European Commercial Real Estate Investment Trust to reflect its new focus.

The deal boosts the value of ERES’s investment properties from around €530 million ($591 million) to approximately €770 million ($859 million), comprising 3,348 multifamily suites across 67 properties. The portfolio also includes three commercial properties with about 400,000 square feet of gross leasable office area.

Canadian trust grows in Europe

CAPREIT—not to be confused with the U.S. multifamily company by the same name—is one of Canada’s largest residential landlords, with interests in 56,042 residential units in and around major urban centers across Canada and the Netherlands.

The Toronto Stock Exchange-listed REIT more than doubled its Dutch portfolio in June 2017 by acquiring 19 properties with 849 residential suites in a single transaction. CAPREIT set up a regional office in the country at the same time.

The trust further boosted its presence in the Netherlands last December by scooping up a 13-property portfolio with 535 residential suites for €107.5 million ($120.4 million) and acquiring 225 single-family rental homes and 120 multifamily rental suites across six properties for €55 million ($61.6 million).

A number of multifamily investors from Canada are heading overseas to grow their portfolios in markets including the U.S. and Europe. Toronto-based Starlight Investments is an active buyer of Class A multifamily assets in the American Sun Belt—in April, the company acquired a Class A 282-unit multifamily property in Atlanta.