Varia US Properties: Significant increase in rental income
Varia US Properties, a public limited company listed on the Swiss stock exchange, increased its total income to USD 43.3 million (+31 %) and rental income to USD 26.2 million (+50 %) in the first half of 2017.
The value of the residential real estate portfolio in the USA reached a new high of 508.1 million. As at the reporting date, the portfolio comprised 47 properties with a total of 7,289 residential units. The occupancy rate amounted to 95.3 percent. Most of the properties are located in the US states of Florida (share: 28.4 %) and Texas (17.6 %) as well as in 15 other states.
Potential for value appreciation in the portfolio
Net target rent rose to 71.1 million as at June 30, 2017. Net income from fair value adjustments amounted to 14.9 million. Most recently, four properties were acquired in the greater Dallas area, three in Arizona and four in the Midwest. All properties are in line with Varia's strategy of focusing on second and third tier properties in the secondary and tertiary residential market, according to Patrick Richard, Delegate of the Board of Directors of Varia. All of the properties have the potential to increase in value.
Demand for residential properties in the aforementioned categories in the USA remains strong, with rents on the outskirts of cities rising faster than in the cities themselves, writes Varia US Properties on the occasion of the announcement of its half-year figures. In particular, residential units in apartment complexes, which make up the majority of the Varia portfolio, outperformed the market average, according to Richard.
"Investment program gets underway"
Against this backdrop, the company expects solid growth for the current half-year, combined with a further increase in portfolio value and good property income. "We will use the second half of 2017 to ramp up all investment programs and continue to implement our growth strategy. Our asset manager Stoneweg will also continue to expand our presence in the USA in order to select further attractive properties," explained Richard.
The depreciation of the US dollar against the Swiss franc (1.1. to 30.6.2017: -6.6 %) will lead to a currency loss in the statutory financial statements, he added. However, the company still intends to make distributions from the capital reserve contributions.
