Varia US Properties doubles net profit
Varia US Properties reports a doubling of net profit to 34.9 million US dollars for the 2017 financial year. Total income rose by 36.5 percent to 88.2 million.
In the first full financial year after its listing on the SIX Swiss Exchange, Varia achieved results that exceeded its own expectations, as the company announced. Varia sees this as evidence of the potential of multifamily housing in the US in the secondary and tertiary markets and the effectiveness of the strategy pursued.
As at December 31, 2017, the portfolio consisted of 50 properties with a total of 8,245 residential units in 18 US states and a property value of USD 618 million (2016: USD 343.5 million). The occupancy rate amounted to 94.3% (2016: 95.5%).
The portfolio generated effective gross income of 65.8 million in 2017 (2016: 39.1 million) and total income of 88.2 million (2016: 64.6 million). Total operating costs amounted to 39.2 million (2016: 33.9 million), while the net operating result was 48.9 million (2016: 30.6 million).
After deducting financing costs and provisions for income taxes, the profit for this period amounted to 34.9 million (2016: 16.2 million), including a profit of 4.8 million from the tax reform. Of this, 28.1 million is attributable to Varia (2016: 8.9 million). According to the company, net income from fair value adjustments to investment properties amounted to 22.4 million (2016: 21.2 million).
Portfolio continues to grow
The capital that Varia raised at the IPO in December 2016 had been fully deployed by the end of June 2017, the real estate company announced. Varia invested 269.7 million in 13 properties - most of which are located in markets in which Varia was not yet present. The properties are larger than the original portfolio, closer to major cities and closer together in order to take advantage of economies of scale.
Two further capital increases were carried out in the fourth quarter of 2017. The real estate company has announced that the fresh capital is expected to be fully deployed by June 30, 2018. As at the end of March, Varia had already invested 81.5 million in four properties. Various other properties are currently undergoing due diligence, the company added.
In December 2017, Varia agreed with Peak Capital Partners on a full takeover and control of the assets as well as the liquidation of the minority interests in its financial statements. The minority shareholders will receive assets from the portfolio up to their equity stake. Upon completion of this transaction, Varia will own 100 percent of 44 properties. The deal is expected to be completed by the publication of the 2018 half-year results.
Varia intends to distribute a dividend of CHF 2.50 per share for the 2018 financial year.
