Good morning. My name is Elise Lenzer, ERES's Corporate Secretary. I will act as moderator for today's meeting. Before the start of today's meeting, we would like to outline the agenda and various procedures and guidelines. In terms of the agenda, our chair, Dr. Gina Parvaneh Cody, will call the meeting to order and address various preliminary matters. The items of business to be voted on will then be moved, voted on, and the results of the meeting announced. We will hold a Q&A session following the management presentation at the end of the meeting. For the purposes of today's meeting, voting on all matters will be conducted by a single electronic ballot. Registered unitholders and proxy holders of records can use the electronic ballot feature available on your screen.
You are encouraged to complete your electronic ballot during the allotted time prior to the end of the formal portion of today's meeting. Please note that if you have logged into today's meeting using your control number and accept the terms and conditions, you have revoked any previously submitted proxies. If during the course of the meeting, we encounter any technical difficulties with the webcast, please remain logged on and we will resume as soon as possible. Finally, I would like to remind everyone that today's meeting may include forward-looking statements. These statements are given as of today's date and involve certain risks and uncertainties discussed in the recent public filings that are available on SEDAR. A number of factors and assumptions were applied in the formulation of such statements, and actual results could differ materially.
For additional information with respect to forward-looking statements, factors, and assumptions, we direct you to ERES's public filings, including its most recently filed annual information form and MD&A. I will now turn things over to our Chair, Dr. Cody.
Good morning, and welcome to this meeting of ERES unitholders. My name is Gina Parvaneh Cody, and I am the Chair. Thank you, Elise, for outlining today's agenda, procedures, and guidelines. The meeting will now come to order. As chair of the board, I will act as the chair of the meeting. Ms. Elise Lenzer, ERES's corporate secretary, will act as secretary of the meeting.
With the concurrence of the meeting, I appoint Lynn Earwood of TSX Trust Company to act as a scrutineer. I have been informed by the scrutineer that we have unitholders present or represented by proxy, who hold a sufficient number of units to constitute a quorum. I therefore declare that there is a quorum at this meeting. The scrutineer's report will be kept by the secretary with the records of the meeting.
The notice of this annual meeting of unitholders, dated April 12, 2023, was mailed on April 25, 2023, to all holders of record as of April 12, 2023, of ERES's trust units and special voting units, both groups to which we shall refer collectively as unitholders for the purposes of this meeting. The matters to be considered at today's meeting are set out in the notice of meeting and management information circular.
This year, ERES used the notice-and-access process to deliver the notice of meeting and the accompanying form of proxy, management information circular, and financial statement, including the auditor's report and the accompanying management discussion and analysis. Such materials are posted online at https://docs.tsxtrust.com/2171 for unitholders to access and are also available on ERES's SEDAR page. Proof of mailing of the notice-and-access notice has been filed with me.
I direct that a copy of the notice of meeting, together with proof of service, be kept by the secretary with the records of the meeting. Accordingly, I will dispense with the reading of the notice of meeting. I now declare the meeting regularly called and properly constituted for the transaction of business. The third matter on the agenda is the presentation of the consolidated financial statements for the year ended December 31, 2022, and the report of the auditors.
Copies of such documents are available on ERES's SEDAR page and have been mailed to unitholders. In accordance with ERES's Fourth Amended and Restated Declaration of Trust, the financial statements are presented to the meeting, but no other action is required with respect to them. It's now in order to move today's formal items of business.
I will move each item, and I have been advised by Mr. Kenney and Ms. Lancer, both duly appointed proxy holders in attendance today, that they would be prepared to second each of the motions I so move. Accordingly, unless there are any objections, I will take such motions as seconded with no further action needed. As previously indicated, live voting on the applicable items of business to come before today's meeting will be by electronic ballot. The polls are now formally open for electronic voting.
Voting will close once all resolutions have been formally adopted. Once voting, the scrutineers will tabulate the results for each matter. All items of business in the management information now be moved. First, election of trustees. The six trustees to be elected by the unitholders of the REIT to hold office until the close of business of the first annual meeting of unitholders of election, or until their successors are elected or appointed.
The Management Information Circular sets forth the background of each of the six nominees and the qualifications considered in making trustee nominations. The proposed nominees listed in the circular are Arian Breure, Harold Dirks, Ira Gluskin, Mark Kenney, Gervais Levasseur, and me, Gina Parvaneh Cody. Thank you to the nominees for agreeing to stand for election. I move to formally nominate as a trustee each of the proposed nominees as listed in the Management Information Circular. As there were no nominations in accordance with the advance notice requirements set out in the REIT's Fourth Amended and Restated Declaration of Trust, I declare nominations closed. I also move to elect each of the six named individuals as trustees of the REIT. As advised earlier, I will take such motions as seconded.
The next matter on the agenda is the appointment of auditors for the ensuing year and to authorize the trustees of the REIT to fix the remuneration of the auditors. The Audit Committee of the REIT has approved, subject to unitholder confirmation, the appointment of Ernst & Young LLP as auditors of the REIT. I move that a resolution be approved, appointing Ernst & Young LLP, Chartered Professional Accountants, as auditors of the REIT to hold office until the close of the next annual meeting or until a successor is appointed and take such motion as seconded. The items of business of the meeting are now closed. Those registered unitholders or duly appointed proxyholders who have logged in with a control number will now have a short pause to complete their ballot.
As a reminder, if you have logged in to vote at today's meeting using your control number, you have revoked any previously submitted proxies. On your electronic ballot, you can register your vote by accessing the voting page and selecting a vote for or withhold, in respect of each trustee nominee and the appointment of Ernst & Young LLP.
Thank you for voting. Voting is now closed. I would ask that the scrutineer compile the report regarding the results of voting on all business matters. I have been advised by the scrutineer that the proxies deposited for the meeting have been voted, and based on those preliminary voting results, I declare as follows: With respect to the resolution regarding the election of each of the individuals nominated as trustees, I declare that each of the six nominees is elected as a trustee of the REIT.
With respect to the resolution appointing Ernst & Young LLP as auditors of the REIT, I declare this resolution carried. I direct that the results of the poll be included with the minutes of this meeting, and the final results of the voting will be announced in a press release and filed on ERES's SEDAR+ page. There being no further business, I move that the formal portion of the meeting be terminated and take such motion as seconded. I declare the motion carried, and the formal portion of the meeting is now terminated. I will now turn the meeting back to our moderator, Ms. Elise Lezner.
Thank you, Ms. Chair. We'll now pass the meeting over to Mark Kenney, the REIT's chief executive officer, who will give a short presentation. Following such presentation, we will hold a Q&A session. Registered unitholders and proxyholders of record can submit questions during the Q&A session via the messaging platform on your screen. If you submit a question, such question will be read aloud before being addressed. We will make our best effort to address all questions.
However, if we are unable to address any questions due to time constraints, we will make our best effort to address such questions directly with the unitholder following the meeting. If you wish that your question be addressed after the meeting, kindly include an email or phone number with your question. Please note that comments or questions that are redundant, inappropriate, or otherwise unduly disruptive will not be addressed. I will now turn the meeting over to Mr. Kenney.
Thank you, Gina, thank you, Elise, a warm welcome to everyone. We recently wrapped up ERES's fourth year of strong operational performance and growth. Since its inception on March 29, 2019, ERES has more than tripled the number of residential apartments and townhomes within its portfolio. An initial 2,091 suite portfolio has grown into approximately 6,900 residential units today. These are well diversified across the Netherlands. The REIT's external growth has been accomplished in parallel with very strong organic growth. Over the course of these first four years, we've achieved a constant annual growth rate of 4% in occupied average monthly rent, which is at the upper range of our target range.
In the first quarter, our AMR grew by 5.9% on the same property residential portfolio, well in excess of our long-term target range. At the same time, occupancy remained high and stable and was nearly 99% on March 31st, 2023. On top of this, about three-quarters of our residential vacancy at any given time is intentional, as we temporarily keep units offline on turnover, allowing us to invest in value-add upgrades and renovation. This improves the quality of our suites, the enjoyment of our residents, and our future operational and environmental performance. It's important to note that ERES has been consistently achieving these strong operational results within a fluid and uncertain regulatory regime. In fact, this represents one of our primary competitive edges.
We have a deep understanding of the regulatory framework in the Netherlands, we are strategic, adaptable, and experienced at working within its changing parameters. I will briefly dive a bit deeper into ERES's financial performance in 2022 and into the first quarter of 2023. For the year ended December 31, 2022, both operating revenues and NOI grew by 16%, a result of acquisitions and the strong same property AMR growth I just discussed. Our NOI margin remained relatively in line with last year at 77.3%, which includes service charges that are fully recoverable from tenants. Excluding these charges, our NOI margin expanded to 83.1%, up from 82.1% in 2021. Amongst other factors, this reflects a lower landlord levy expense, which is now abolished.
This also reflects the fact that the REIT is largely insulated from inflation. Tenants are responsible for all of their own energy and other utility costs. The REIT incurs no wages, wage costs, and property management fees are at a fixed percentage of operating revenues. This all trickles into improved financial returns for our unitholders, with FFO and AFFO per unit both up by 10% compared to the prior year. I've already highlighted our 5.9% rent growth and high occupancy in the first quarter of 2023. This drove the 5.2% increase in our same property NOI as compared to the same quarter last year. However, our NOI margin was down 0.2% due to higher R&M and advertising costs, partially offset by lower landlord levy expense.
Combined with higher interest, we're absorbing on our mortgage portfolio and credit facility, as well as increased current income tax expense, diluted FFO and AFFO per unit both decreased by approximately 5% compared to the first quarter of 2022. It did remain flat compared to Q4 of 2022. Inclusive of our distribution hike, which became effective last March, our AFFO payout ratio increased to 85.2%. Finally, on the valuation side, the fair value of our portfolio decreased to EUR 1.78 billion at March 31st, driving the decline in our diluted NAV per unit. This reflects our conservative approach to valuations, as the first quarter saw only one comparable property transaction in the Netherlands. Our balance sheet condition is strong.
In fact, we fortified our liquidity position this year through increasing capacity on our credit facility by EUR 25 million, plus an additional EUR 25 million, which is available through an accordion feature. Our other debt metrics also remain conservative and safely within our guidelines. You will see our ratio of adjusted debt to market value increased in Q1, but this is simply due to the conservative write-down on our investment portfolio. Nevertheless, we are actively working to lower this toward our 45%-50% target range. On our mortgage portfolio, we fixed 100% of our interest. It currently carries a very low weighted average interest rate of 1.77%. Although this will increase on near-term mortgage refinances, we have less than 10% of total mortgage debt maturing both this year and next, which does safeguard our overall exposure.
We remain well-positioned to weather any ongoing volatility in the macroeconomic climate. As we look ahead, backed by our solid financial structure, we're going to continue exhausting every available avenue for value creation. Our ability to do this is underpinned by a housing crisis in the Netherlands that continues to escalate. The housing shortage will grow to more than 325,000 homes in 2023, and it's expected to increase even further to reach 400,000 in 2025. The most important indicator for demand for new homes is the growth in the number of households. With the influx of Ukrainian refugees, the number of households rose by 150,000 in 2022, which is a significant increase as the average growth is about 63,000 per year.
In order to address the rising demand, the national government has set the objective of building 100,000 new homes per year. However, the number of building permits fell by 18% in 2022, and unless the government takes incentive measures, that is expected to drop even further in 2023 and 2024. The rising demand, combined with an ever-decreasing inventory of available rental, results in very strong rental fundamentals in the Netherlands. These conditions lend themselves well to ERES' core purpose as a provider of rental accommodation. Moreover, in attempting to address housing supply and affordability, over the years, the Dutch government has created a very complex regulatory regime. ERES proficiently operates within this framework and exercises multiple levers to drive robust rent growth.
Our trifold strategy is comprised of indexation, turnover, and the conversion of regulated units to liberalized, which work together to consistently achieve rental growth at the upper end of our target of 3%-4% range. Our strong portfolio diversification supports this rent strategy. With two-thirds of our portfolio being non-regulated and about half of our property value located in the high-growth Randstad region, we have a lot of mark-to-market opportunity upon turnover.
Furthermore, one-third of our portfolio is comprised of single-family homes, while 100% of our units are individually titled. This last piece is important as it provides an additional opportunity to surface embedded value, and it's through that privatization of those individual units upon turnover. By being able to pull in equity and pay down debt, we add an invaluable downside protection. On that note, we believe the future for ERES is full of opportunity.
I'm excited to be leading it forward as we build upon its strong track record established today. Our fundamental mission remains the maximization of value for all ERES unitholders. Moving ahead, in 2023, we will continue actively working to do just that. Thank you for your time this morning. We would now be pleased to take any questions that you may have.
There are no comments or questions to be addressed. I will now turn the meeting back to Mr. Kenney.
Thank you everyone for attending the meeting and voting online. We look forward to welcoming you again at next year's annual meeting. Thank you. Have a nice day and goodbye.