Welcome to the European Residential Real Estate Investment Trust first quarter 2024 results conference call. My name is Carla, and I'm going to be coordinating your call today. During the presentation, you can register to ask a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I would now like to hand you 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 results 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, Jenny Chou, our Chief Financial Officer, and Karim Farouk, our Managing Director. Let's turn to slide 4 and get started. Strong operational performance has steadily reinforced the ERES platform since inception, and we're pleased with another on-track quarter. Our residential suites were 98.5% occupied on March 31st, 2024. This is consistent with the previous period, as we're continuing to keep certain unoccupied suites offline to either enhance value through renovation or potentially sell as part of our optimization strategy. Our occupied average monthly rent was EUR 1,068 at current quarter end, representing an increase of 6.7% versus the same property portfolio on March 31st, 2023. Once again, this is above our target range of 3%-5%, reflecting the tight rental conditions in the Dutch housing market, which are showing no signs of softening, as well as ERES's ability to maneuver within its complex regulatory framework. Turning to slide five, I'll provide a brief update on investment activity during the first quarter. We're pleased to have closed on 24 single-suite dispositions during Q1 for combined gross proceeds of EUR 7.6 million, which represents a strong premium to the previously reported IFRS fair values. Subsequent to period end, we sold an additional 42 suites for an aggregate consideration of EUR 10.8 million, excluding transaction costs, which is again in excess of fair value. We're excited to be accelerating our progress on this strategic initiative, and we'll continue to ramp up our efforts in order to generate incremental capital, primarily to pay down our credit facility debt and strengthen our future financial position. On our investment portfolio, fair value decreased by 0.5% this quarter to EUR 1.67 billion. Persisting inflationary and interest rate pressures, alongside political and regulatory uncertainty in the Netherlands, drove up the portfolio's implied cap rate. However, this was offset by higher forward NOI. The residual change in fair value was due to individual unit sales. All in all, our diluted NAV per unit remained relatively stable at EUR 2.89 million at March 31st, 2024. I'll now turn things over to Jenny to walk through our financial performance. Thanks, Mark. Slide seven summarizes our financial performance for the first quarter of 2024 versus Q1 of 2023. Strong rent growth and high occupancy increased operating revenues by 4.5%. On the expense side, property operating costs decreased as a percentage of revenues, and together, our NOI grew by 7.1%, while our margin expanded by 190 basis points to 78.2%. The strong organic growth continues to mitigate the impact of higher interest rates that we're absorbing, and our diluted FFO per unit of EUR 0.039 was relatively flat versus EUR 0.040 in the comparative period, despite the elevated interest costs arising from our mortgage financing in June of 2023. Our annual rate of distribution was held steady at EUR 0.12 per unit, and our AFFO per payout ratio was 80.8% for the current quarter, which is within our long-term target range. Referring to slide eight, we continue to proactively and prudently manage our liquidity and leverage. Our adjusted debt-to-market value ratio was 58% as of March 31st, 2024, which is consistent with the previous quarter. In addition to our current debt service coverage ratio and interest coverage ratio of 2.4x and 2.9x, respectively, we remain in compliance with all of our covenant restrictions. On our mortgage portfolio, as displayed on slide nine, during the quarter, we renewed one of our commercial mortgages for an additional three-year period ending on March 27th, 2027, with EUR 18.7 million in principal and a fixed contractual interest rate of 4.7%. This increased our weighted average effective interest rate to 2.22% at period end, which remains low in comparison to current rates. This is due to the fact that at period end, 100% of our mortgages were financed with terms and arrangements that result in fixed interest payments. We also mitigate our interest expense volatility risk through staggering a renewal, as you can see on the slide. Moving forward, we'll continue to carefully and optimally manage our platform. financial structure and liquidity to enhance cash flow, maintain balance sheet flexibility, and mitigate the impact of future mortgage maturities. I'll turn things back to Mark to wrap up. Thank you, Jenny. On slide 11, we've summarized the ways in which we're currently enhancing returns for our unit holders. This includes our tried and tested rent growth strategy, comprised of uplifts on turnover, indexation, and the conversion of regulated suites to liberalized. This is augmented by the opportunity for suite-by-suite privatization, and we're evaluating the net present value of reletting an individual unit versus selling the units to end users. Beyond this, we're also continuing to explore additional opportunities to optimize our business and generate capital, with a view to ensuring we're ultimately maximizing value for our unit holders. That brings me to our investment highlights on slide 12. The end of the first quarter of 2024 marks the five-year anniversary of ERES. We're proud of the progress we've made to date, and we'd like to thank all stakeholders for their long-standing support. Looking ahead, we'll continue to execute our strategic, financial, and operational objectives as we reaffirm our active commitment to driving incremental value for our unit holders in all the ways we can. With that, I would like to thank you for your time this morning, and we would now be pleased to take any of your questions that you may have. Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. We will make a quick pause here for the questions to be registered. Our first question comes from Jonathan Kelcher from TD Cowen. Jonathan, your line is now open. Thanks. Good morning. Good morning, Jonathan. First, first question, looks like you picked up the pace of sales post a quarter, selling 44 versus 24 in Q1. Is that just seasonality, or what sort of volumes, roughly, do you think we can expect for the year? I think it's probably more attributed to the ramp-up of the program. You know, the offering to existing residents does take 90- to 120-day cycle to kind of come to light. I would say looking forward, we remain very focused on, you know, optimizing value in any way possible, whether it be unit sales or other, and we're happy with the progress we're making on unit sales. This will be a permanent part of the strategy, but it's not limited to individual unit privatization. We continue to be open to all means of surfacing value for ERES unit holders. Okay. I'll take that to mean you're also looking at selling buildings. Do you have any... Like, what's the market like right now? Do you have any listed for sale? Activity is still relatively low. I would say that not unlike North America, there was a burst of enthusiasm, followed by a pause when rates kind of went a bit wonky on the 10-year. But I would say the overall messaging we're hearing from brokers, we're hearing from appraisers, and we're hearing from peers on the street, is the outlook obviously is quite positive for lowering rates, and that will be extremely positive for apartment valuations and transaction volumes. Okay. And then just, lastly, the CapEx in Q1 was down quite a bit. Is that a timing issue or any change in strategy? No, there's... It's a change of strategy. The market has become so strong that we are really trying to find that delta difference between what the market gives you on a rent increase on turnover versus what you get with full renovation. And with the cost of our capital having risen so much and our focus on paying down debt, we're very pleased, actually, with the net result of what we're now doing. The team is working very hard to optimize those rents without the renovation program, and we have seen that, you know, just in the marketplace, unlike Canada, the Netherlands is just right in the middle of a housing crisis or perhaps at the beginning of a housing crisis, and it's just not necessary. Okay, but the math still works going from when you have the opportunity to go from regulated to liberalized, correct? Yeah, that strategy hasn't changed. Okay. So it's just, like less spend on, say, liberalized to go from tenants- Liberalized, yeah. That is- That's right. That's right. Okay. And is Q1 sort of a good run rate for CapEx? John, just to add, there is a slight timing issue, too, 'cause Q1 typically for our non in-suite is typically on the lower end, so it's two things combined. On our in-suite, I would say Q1 is probably a good run rate, but for the non in-suite, we should be seeing a higher number in- That is, that is the seasonal effect. Yeah. Okay. Thanks. I'll, I'll turn it back. Our next question comes from Kyle Smiley from Desjardins. Thanks. Morning, everyone. Just building on, John- Good morning, Kyle. -on a question in there. So just... So I just noticed, the uplift on turnover was a bit lower this quarter. So is that part of this strategy shift where, you know, like, specifically on the, the conversion to liberalized? You know, I think it was about 30, a 35% increase, which obviously is still fantastic, but a little, little lower. So is that just less investment or is that just suite mix? That's completely a result of less investment and reaping the rewards of just the strong market on the fundamentals of the strong market alone. Okay. You do the math. Yeah. Yeah. Yeah. No, I think that makes perfect sense. Then the other thing I was thinking about here, so the cadence of your mortgage maturities for the balance of the year, I think obviously pretty limited, but I'm just curious on the timing of those. Yeah. We have roughly EUR 14 million. That's the that we just lost that we've disclosed. And then the remainder of that is all in Q4. Okay. So very year-end weighted. Yeah. Okay. And then, the last one for me. So I think you gave some disclosure in your prepared remarks about how the disposition prices compared with IFRS, and they were at a premium. I think last quarter you mentioned maybe not comfortable disclosing that yet, but you would kind of going forward. So just curious if there's any update there or, you know, is, is this something that we can look for later in the year, maybe with-- for more disclosure? It's not something we are contemplating on the disclosure front, but I don't mind giving some color as to why. Sure. When you look at the IFRS values, it doesn't take into unique attribute of each individual suite. And so when we're selling to residents and selling individual units, it could be misleading in terms of the overall mark-to-market evaluation. But let's leave it to say it's very strong double digits beyond the valuation. Okay, perfect. I'll turn it back. Thanks very much. Our next question comes from Dean Wilkinson from CIBC. Your line is now open. Thanks. Morning. Morning. Just one question for me. One, one question for me, Mark. When, when you're... and this might be a hard one to answer. When you're selling one of these units to, to, to your residents, do you have a sense of what the average differential would, say, be from them to carry sort of a mortgage at some assumption versus rent? Trying to get a gauge of, you know, what that affordability gap is and, and how that could look going forward. No is the short answer. Because I think the decision by residents to buy is highly predicated on the value that they're buying the unit at versus what they perceive the value to be buying in the current market around them. So there is a differential between what they're able to buy for and what might be readily available in the market. But really, more, Dean, I think is playing into it, is obviously the convenience of not moving and staying in your own home, but also the, if you look at what's happening to housing prices in the Netherlands, it's not unlike Canada. They're just on a continual rise. There's no sign of slowing down. So I think folks are actually just saying: Look, I'm going to be here for the long run. I have a chance to buy my home. It's highly accretive for ERES to do a disposition, and probably a very good deal for the resident to not have to move and be able to buy something at, you know, perhaps what they see as a slightly discounted value in the local market. That's what we're hearing is that, yeah, they like the value, they can see the value, and both sides are happy. All right. Maybe asked another way, at, like, EUR 276,000 a door average, that you've just kind of done the 66 in the last two quarters, is that materially less than if, say, I was there and I just wanted to go out into the market and look for something, would that this be sort of a 20% differential, or is that another hard one to gauge because the product is very different? Well, the valuations take into consideration those market values, and it's a little bit crude how they do it, and they don't take into account the valuation for all units going to market. They take into the evaluation a privatization strategy of 10% of the units turning over. So that's already baked into the valuation. But like I said to Kyle, the-- what we're actually achieving above those valuations is well into double digits. And for... That's why for ERES, it's very attractive. And obviously, that it's for the residents buying their units or, or for those turnover units, also attractive valuation. They're selling quite quickly. And Dean, just to add to that, of all the units we've been selling, not all of them are to tenants. I would like, around half of them are actually vacant units that we sold to a third party, where we just put out in the market. So those would be at market price. Okay, interesting. But attractively priced to allow for a quick takeout. Yeah. Yeah. No, I, you kinda get the math, right? It looks like it's about a mid-teens premium to where you might be carrying them, maybe 20% to where sort of people are carrying the NAVs, and if we could buy homes in Canada for under CAD 300,000, all our problems would be solved. That's it for me. Thanks, Mark. Jenny? Thanks, Dean. Our next question comes from Sairam Srinivas from Cormark Securities. Your line is now open. Thank you, operator. Good morning, everybody, and my apologies if these questions have already been addressed before. I I was a bit late to the call. Mark, Jenny, can you just talk about the commercial portfolio for a bit, and, you know, the decrease in rents that you saw there this quarter? Is there some color behind that? Yeah. It really relates primarily to the renewal of our lease in Belgium. I'll let Jenny speak to that a bit. Hey, Sai. We did have a new lease renewal in our Belgium property, so that's a single-tenanted building. It was a long-term lease that we entered in pre-COVID, and obviously, with the decrease in market rent, when it's time for a renewal, it was a sizable decrease to our previous rent. It is a government- All right. right. Thank you. Sorry. Long-term government tenant, so the cash flow will be exceptionally stable now. But as Jenny said, market deterioration in office there, just like we've seen in North America. Good call, Mark. Thank you for that. And the last question I had was on operating expenses. Obviously, you guys made good progress this quarter in terms of decreasing those, but is that a function more of timing, or is that more to do with general reduction in these expenses overall? Yeah, I think in general, the focus for the team has been on, you know, scarcity of capital that's available. They're pushing very hard to find efficiencies. You know, ERES was in rapid growth mode and stabilization mode for a few years there. We've had a pause on that, and it would just be attributed to good old-fashioned efficiency. That's brilliant. Thanks for the call, Mark. I'll turn it back. Thank you. As a reminder, to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Jimmy Shan from RBC Capital Markets. Your line is now open. Thanks. Just on the suite sales done so far, what would the Cap Rate look like on trailing NOI? The impact or on the price paid? Um, the- Jamie, I'm not- Yeah, if you take the price, the proceeds that you got, and then you look at the NOI on a trailing basis, what would that show? It's like trying... Basically, you're trying to back into the premium to IFRS. No, I was just trying to get a sense of how far, how wide it is from the current situation. Yeah. Significant double-digit increase over IFRS. And we could walk through the math maybe a little bit more in detail offline. Well, I'm just assuming that those are the rents would be higher, I would imagine, on those assets, and that's why I was trying to. I'm trying to determine, like, if there's a big variance. I mean, you don't have to provide a specific number but just sort of a range. Sorry, Jim, what do you mean by the rents would be higher? Like, are you saying, like, the quality of those units that we're selling? Or yeah, or even the size of the unit, maybe, 'cause they're under the assumption that they're more townhouses. Yeah. Okay, so yes, the focus of sales has been on the single-family home or townhouse product. That's where there is the most demand. So yes, the size of the units would be bigger, therefore, the total revenue would be bigger. But the cap rates for those units are no different than the rest of the portfolio. So I don't know if that answers the question or not. Okay. No, that's fair then. Yeah. And then maybe generally, like, based on your discussion with brokers, what are they telling you in terms of cap rates that it would take today to move a property today? Well, ERES is in no hurry to sell assets. There is a market that is out there, no doubt. Family offices are still very much interested in privatization strategy for buildings. So the single-family homes would be in high demand. We are always open to servicing value for ERES unitholders in any way possible, but we are in no rush to do that, and we will not compromise value in the process. What we have said previously is that we are obviously very aware of maturing debt and very focused on a strategy to mitigate any negative effects there. But I would leave it that we're extremely well connected with local brokerage and what's happening in the marketplace, and we will be opportunistic to plow into that market if strong bids show up. As always, no different than- Okay. many of our peers. Thank you. You're welcome. Our next question comes from Brad Sturges, from Raymond James. Hey, good morning. Just, just one question on the mortgage financing that you did so far this year. It looks like both mortgages were related to the commercial portfolio. The one specifically post-quarter, that was a one-year extension. I'm just curious if you can give us a little bit more color in terms of which, which asset that was and the thinking around the one-year extension? It's the German property. Is it just because there's still a shorter term left, and there's some leasing to do, or what's the thinking around the one-year extension? Yeah. It is. Just to do a short-term extension while we're improving the leasing on it, so that when we do a full longer-term renewal, it can be more meaningful. Yeah. Okay, that makes sense. Thanks a lot. That was our final question, so I will hand back over to Mark Kenney for final remarks. Thank you, operator, and thank you to everyone for joining us this morning. If you have further questions, please do not hesitate to contact us at any time. Thank you again, and have a great day. This concludes today's call. Thank you for joining. You may now disconnect your lines.