- Increase of effective gross income from USD 22.9 million in Q4 2018 to USD 23.1 million (+1.1%)
- Rental income up from USD 20.7 million in Q4 2018 to USD 20.9 million (+0.8%)
- Total operating expenses amounted to USD 12.3 million (+1.4%) compared to USD 12.1 million in Q4 2018
- Net operating income up 0.6% to USD 10.8 million (USD 10.8 million in Q4 2018)
- Focus on continuing to implement the value-add strategy
The main focus of Varia US Properties in the first quarter 2019 was on the continuous implementation of the value-add strategy as well as on the optimization of the overall operating performance of the portfolio. The focus was also on the green initiative and the transition of the Low Income Housing Tax Credit (LIHTC) properties into local market conditions and will also be for the upcoming quarters of the year. During the first quarter 2019, one of the LIHTC properties (Tuscany Bay in Lawrenceburg, Indiana) came out of the program and transitioned to local market rents.
On the acquisition front, Varia continues to actively explore properties that meet the Company’s investment criteria and is poised to execute on these targets when the conditions are right. The US multifamily housing market remains to be strong with a favorable supply of attractive properties in suburban markets. Also, interest rates remain stable which is expected to continue throughout the full year 2019. The portfolio, as of 31 March 2019, consisted unchanged of 52 properties totalizing 9,737 units.
Kepler Cheuvreux published another coverage research in mid-April. It recommends a Hold position and a target price of CHF 39.
Patrick Richard, Delegate of the Board of Directors of Varia, said: “The first quarter 2019 results show the progress of the implementation of our value-add strategy combined with the further optimization of our portfolio. We will continue to focus on these main areas and selecting the markets where our investment criteria will be met. Based on the ongoing strong US multifamily housing market and our strategic initiatives, we are confident that we will provide strong results for the full year 2019.”