Varia US Properties is looking for partners
The Zug-based company increased its rental income by 3.1 % on a comparable basis in the past financial year, while five sales reduced the portfolio. The loss widened.
Varia US Properties increased its rental income on a like-for-like basis by USD 3.1 % to USD 91.5 million in the 2025 financial year (previous year: USD 88.7 million). The company, which invests exclusively in US multifamily properties from Zug, attributes this to a strong tenant commitment and the continued high demand for multifamily housing. Net operating income (NOI) at portfolio level even increased by 4.4 % like for like.
However, total rental income fell by USD 9.4 % to USD 98.3 million because the portfolio was smaller in the reporting year. Five older properties with a total of 1,166 units were sold for a combined USD 122.9 million, which corresponds to an internal rate of return (IRR) of USD 6.3 %. As at the end of 2025, the remaining portfolio comprised 22 properties in nine states (previous year: 27 in eleven states). The proceeds were used to repay a CHF 50 million bond, among other things. The portfolio value according to the valuation by Colliers fell to USD 1.046 billion (previous year: USD 1.194 billion). The vacancy rate remained virtually stable at 93.2 % occupancy (previous year: 93.7 %).
Loss widens
On the earnings side, the picture remains negative. The total loss for 2025 amounted to USD 31.8 million, compared to USD 17.5 million in the previous year. The main driver was a currency loss of USD 8.1 million due to the appreciation of the Swiss franc against the dollar (previous year: currency gain of USD 4.6 million). Financing costs rose accordingly to USD 47.1 million (previous year: USD 37.0 million). Normalized funds from operations (FFO), which excludes currency effects and other non-cash items, fell to USD 9.7 million (previous year: USD 10.9 million).
EBITDA excluding revaluation effects amounted to USD 32.1 million (previous year: USD 50.7 million), which corresponds to an EBITDA margin of USD 29.3 % (previous year: USD 38.7 %). At portfolio level, the revaluation resulted in a loss of USD 34.0 million (previous year: USD -35.6 million).
Strategic realignment
In view of the results and the uncertain market conditions, the Board of Directors has decided not to pay a dividend for 2025. The liquid funds are to be reserved for urgently needed capital improvements, the repayment of a short-term loan of CHF 25 million and future acquisitions.
The company is reportedly looking for a strategic joint venture partner to recapitalize the existing portfolio and provide additional growth capital. The background to this is the discount at which the share is traded compared to the net asset value. The external asset manager is Stoneweg. (aw)
