Ad hoc announcement pursuant to Art. 53 LR
Media release
Zug, 28 May 2025
Varia US Properties with strong operating results considering the ever-complex macroeconomic environment
Manuel Leuthold, Chairman of the Board of Directors of Varia US Properties, says: “While market conditions remain complex, Varia US is taking deliberate steps to strengthen its portfolio, optimize performance, and lay the groundwork for long-term value creation. With a disciplined approach and clear priorities, we are confident in our ability to adapt and emerge stronger.”
The volatile inflationary and interest rate environment was a tailwind for the performance of the rental housing market in the U.S during Q1 2025. Increased interest rates have continued to create difficulty for home sales as elevated mortgage costs push individuals towards rental options versus purchases. However, just as the multifamily sector began its rebound, the U.S. presidential administration announced new trade policies introducing additional uncertainty to the market. Despite this uncertainty, multifamily fundamentals were gaining strength as peak apartment supply continued to absorb, demand persists, and meaningful rent growth is returning in some markets.
Rental income decreased by 8.7% to USD 25.7 million in the reporting period compared to USD 28.1 million in the first quarter of 2024 due to a reduction in property count. On a like for like basis, rental income increased by 3.9% to USD 25.1 million in the reporting period compared to the first quarter of 2024. The like for like rental income compares assets that were held for the full periods of Q1 2024 and Q1 2025.
Additionally, property occupancy increased by nearly 1% from 93.7% in Q1 2024 to 94.5% in Q1 2025. As anticipated, valuations on a like-for-like basis remained relatively stable compared to December 2024, which resulted in an unrealized net loss on revaluation of the portfolio of USD 9.0 million for the three months ending March 31, 2025 (compared to a net loss of USD 20.8 million for the three months ending March 31, 2024).
Regarding expenses, Varia US saw an increase in total operating expenses from USD 18.4 million in Q1 2024 to USD 21.3 million in Q1 2025. Most of this increase was driven by one-time transaction-related costs (totaling approximately USD 1.6 million) from the sale of two properties in Q1 2025. There were no properties sold in Q1 2024. Normalized operational expenses taking into account the one-time transactional expenses increased by USD 1.3 million. This was primarily due to a specific increase in repairs, maintenance, and minor replacements relative to the prior period, driven by required repairs on older assets in the portfolio. After considering all expenses, costs and taxes, the net loss for the three months ending March 31, 2025, was USD 9.5 million (compared to a loss of USD 7.0 million for the three months ending March 31, 2024) which translates to a loss per share of USD 0.94 for the reporting period (loss of USD 0.69 per share for Q1 2024).
Outlook 2025
Varia US will continue to reassess each property’s performance and adjust the business plan accordingly to maximize net operating income, and therefore values, across the portfolio. Capital expenditures have been limited to asset preservation and life & safety improvements, as well as a select number of projects that will produce a strong return on investment.
Simultaneously, Varia US intends to leverage market feedback by continuing to dispose of older vintage, capital intensive assets as opportunities arise: In Q1 2025, two properties were sold, and one property was under contract scheduled to close in Q2 2025. Three additional properties have been identified for sale after the reporting period. The two properties were sold for USD 48.9 million which was near their most recent combined reported fair market value as of Q4 2024 (USD 51.3 million). These sales, as well as the contracted and estimated values of the four additional assets scheduled for disposition, demonstrate significant embedded value within the Company. This also signifies the improvement of health of the overall marketplace for future transactions.
As announced, the Company is also working toward a refinancing of its corporate bond with the ticker symbol “VAR21” maturing in October 2025 and anticipates a successful outcome, maintaining lower cost corporate debt and improving the overall financial health of the Company. If market conditions permit, after the bond refinance, the disposition proceeds received will allow the Company to return to its historic, recurring, dividend-based distribution policy.
Organizational changes
Patrick Richard did not run for re-election as Executive Member and Delegate of the Board of Directors of Varia US Properties at this year’s AGM of the Company held in April 2025. He will be replaced as Executive Member and Delegate of the Board of Directors by Jaume Sabater-Martos, currently Vice Chairman of the Board of Varia US as well as Founder & CEO of Stoneweg. Patrick Richard will also be stepping down from his role as CEO of Stoneweg US and be replaced by Matthew Levy, former Chief Investment Officer of Stoneweg US and current Head of US Operations at Stoneweg SA Group. Matthew Levy has been with the Stoneweg Group for over four years and was previously directly involved with the management of Varia US Properties. The transition from Patrick Richard to Matthew Levy is foreseen for Q3 2025.
Additionally, Taner Alicehic, a founding and non-executive Member of the Board of Varia US, has joined Stoneweg SA Group. As he is now an internal member of Varia US’ Asset Manager, Taner Alicehic will remain a Member of the Board of Directors of Varia US but shift from a non-executive to an executive and non-independent function.
Q1 2025 key financial figures
|
(unaudited) |
Q1 2025 (in USD) |
Q1 2024 (in USD) |
D % |
|
Total Income |
20.9 million |
12.2 million |
70.9 |
|
Total operating expenses |
21.3 million |
18.4 million |
15.3 |
|
Loss for the quarter |
9.5 million |
7.0 million |
35.2 |
|
Earnings per share (basic and diluted earnings on loss for the quarter) |
(0.94) |
(0.69) |
36.2 |
|
Total current assets |
63.8 million |
68.7 million |
(7.1) |
|
Total noncurrent assets |
1,132.5 million |
1,272.7 million |
(11.0) |
|
Total current liabilities |
95.1 million |
53.7 million |
77.1 |
|
Total noncurrent liabilities |
755.4 million |
898.0 million |
(15.9) |
|
Total equity |
345.8 million |
389.6 million |
(11.3) |
The following table further provides an overview of the further financial figures the Company considers relevant to assess its current financial performance:
|
(unaudited) |
Q1 2025 (in USD) |
Q1 2024 (in USD) |
D % |
|
Rental Income |
25.7 million |
28.1 million |
(8.7) |
|
Rental Income like for like 1 |
25.1 million |
24.1 million |
3.9 |
|
EBITDA (operating profit less unrealized revaluation) |
8.7 million |
14.6 million |
(40.6) |
|
Net loss for the Period |
(9.5 million) |
(7.0 million) |
35.2 2 |
|
|
As of
|
As of December 31, 2024 |
|
|
Properties |
25 |
27 |
(7.4) |
|
Units as of |
7,300 |
7,728 |
(5.5) |
|
Portfolio Value |
1.138 billion |
1.194 billion |
(4.7) |
|
Monthly rent per unit for the full month ending |
USD 1,251 |
USD 1,250 |
0.1 |
|
Occupancy rate as of |
94.5% |
93.7% |
0.8 |
1
“like for like” compares assets that were held for the full periods of Q1 2025 and Q1 2024.
2
Relative to Q1 2024, the loss for Q1 2025 increased. This increase is represented with a positive percentage change.
Note: Some amounts above may not add due to rounding.
The Q1 2025 Report of Varia US Properties is available for download on the Company’s website at https://variausproperties.com/investors/quarterly-updates/ .
Key dates
ESG Report 2024 End of July 2025
Half-year results 2025 28 August 2025
Q3 2025 Update 27 November 2025
Contact information
Juerg Staehelin, IRF Reputation
Phone: +41 43 244 81 51, E-mail:
investors@variausproperties.com
About Varia US Properties AG
Varia US Properties AG is a Swiss based real estate company exclusively investing in U.S. multifamily housing with a main focus on secondary and tertiary markets. Established in 2015, the Company acquires, holds, transitions and repositions properties in the boundaries of metropolitan regions of the U.S. in order to secure rental income and value growth. More information: www.variausproperties.com
Disclaimer
This communication expressly or implicitly contains certain forward-looking statements concerning Varia US Properties AG and its business. Such statements involve certain known and unknown risks, uncertainties and other factors, which could cause the actual results, financial condition, performance or achievements of Varia US Properties AG to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Varia US Properties AG is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events or otherwise.
This media release is also published in French and German. This English version is decisive.