Varia US Properties is a Swiss real estate company based in Zug, Switzerland.
It indirectly invests in real estate properties in the United States through a set of so called blockers and PropCo companies. For each property or portfolio that the Company acquires, one or several blocker companies as holding subsidiaries are incorporated, normally in the legal form of a limited liability company typically incorporated in Delaware, United States. Usually, Varia US Properties holds 100% of the interests in the single or series of holding subsidiaries. Each holding subsidiary, possibly in cooperation with other investors, incorporates one or several limited liability companies with the sole purpose of holding the title in one or several properties, a so called PropCo LLC. It is the Company’s intention that the subsidiary holding holds more than 50% of the equity interest and more than 50% of the votes in each PropCo LLC.
As of June 2016, Varia US Properties owns six blockers (100%) and all the shares of a Bahamas-domiciled fund called the Ariston Opportunity Fund. The blockers invest into real estate through Property Companies (PropCos). The PropCos them-selves conclude property management agreements and other agreements relating to the management of the properties with regional partners.
As of today, the Ariston fund held the interests in 21 PropCos. The Company applies the same investment strategy to its entire portfolio, regardless of whether the properties are held by the Ariston Opportunity Fund or another holding subsidi-ary.
Varia US Properties capitalizes the blockers with a mix of equity and debt in the form of shareholder loans.
The below graphic depicts the typical target structure:
The Company has focused on value creation with a long-term perspective.
Varia US Properties considers the following key strengths and market characteristics as basis for future growth:
- Long-standing investment expertise in Swiss and international real estate applied to the U.S. rental housing market
- Well performing multifamily property portfolio in growing urban submarkets
- Experienced Swiss asset manager optimizing performance with tailored investment strategies
- Board of Directors with broad experience in real estate, banking and investments
Valuation
Valuation of the properties is the basis of the NAV calculation. Therefore, each property is valued twice a year, for the year closing (as of 31 December) and for mid-year closing (as of 30 June).
The Company appointed Colliers International Valuation & Advisory Services as its appraiser. Thanks to its numerous offices throughout the country, Colliers makes relevant appraisal of each property based on local market comparative data and the latest appraisal standards.
Currency
Varia US Properties prepares its consolidated financial statements in USD according to IFRS and its statutory financial statements in CHF according to the Code of Obligations (CO). However it invests in US Dollars (USD), its incomes and main expenses are in USD and it functional currency is USD. To date, the Company decided not to hedge the currency risk. Investors may choose to hedge the currency risk or to benefit from a long-term exposure to USD.
Accounting
The Company reports both according to IFRS with the USD as its functional currency as well as according to the Code of Obligations (CO) for its statutory report and for the Swiss tax authority
The IFRS accounts are consolidated accounts based on real estate company standards.