Varia US Properties remains on growth track
Varia US Properties is satisfied with the 2018 financial year. Earnings and Ebidta increased significantly, while profit declined.
As of December 31, 2018, the portfolio of the company specializing in affordable housing in the U.S. consisted of 52 properties with a total of 9,737 residential units in 19 U.S. states. Property value was $767.5 million (2017: $618 million). The occupancy rate was 93.7%, slightly lower than the previous year's 94.3%).
The portfolio generated annualized effective gross income of 86.0 million in 2018 (2017: 65.8 million) and total revenues of 100.8 million (2017: 88.2 million), according to Varia.
After deducting total operating costs of 50.2 million (2017: 39.2 million), net operating profit amounted to 50.6 million (2017: 48.9 million). Due to a number of special effects, however, profit declined year-on-year from 34.9 million to 24.9 million. The Ebitda margin increased from 40.3% to 43.6% within the year.
The net income from fair value adjustments of investment properties amounted to
14.7 million (2017: 22.4 million), Varia said. This includes the sale of the Pine Ridge property in December 2018, which generated a net internal rate of return of 30.5%, it added.
"We are very pleased with Varia's operational performance in 2018. The very good results underline that our focus on the U.S. affordable housing segment in the secondary and tertiary market is paying off," says Manuel Leuthold, Chairman of Varia's Board of Directors.
The company plans to pay a dividend of CHF 2.50 per share for fiscal year 2018, which corresponds to a yield of 6.7% on the basis of a share price of CHF 37.20. In the future, the dividend will be distributed quarterly, among other things to minimize exchange rate risks.
For fiscal 2019, Varia expects continued good numbers "with further increases in the value of the real estate portfolio and solid income from the properties." The affordable housing segment of the U.S. real estate market will continue its strong performance in the current year, the company believes. (ah)
