Varia: New anchor investor and capital increase
Varia US Properties AG intends to carry out two successive capital increases. The aim is to further strengthen the portfolio and take advantage of the high investor demand for real estate investments, the company announced.
As a first step, Varia US Properties intends to issue new registered shares. According to the Articles of Association, the Board of Directors may increase the share capital at any time until November 13, 2018 by issuing up to 665,871 registered shares at market price. Varia, which specializes in residential real estate in the USA, has announced that this transaction should be completed by the beginning of October and generate around CHF 20 million in cash proceeds from a new anchor investor.
Following this, the Board of Directors intends to propose an ordinary capital increase with a rights offering for existing and new institutional and private investors. The company intends to announce the details together with the invitation to the required Extraordinary General Meeting in the fourth quarter of 2017.
"We intend to use the new capital to acquire further attractive properties that will further strengthen our portfolio. We are focusing on projects in the secondary and tertiary markets in the USA in high-growth suburban locations. There is currently excess demand for real estate in these markets, which promises good return prospects for our existing and new shareholders," says Patrick Richard, Delegate of the Board of Directors.
The company currently holds 8,000 units in 18 US states, with Varia heavily invested in Florida. This state was particularly affected by Hurricane Irma. Nevertheless, to the best of Varia's knowledge and belief, tenants and staff remained unharmed and no significant damage was caused to the properties, according to the company. The company is well insured against property and liability damage, but should not have to fall back on any insurance benefits for this storm.
