Varia US Properties : Strong operational results in Q1 2023 including growth of rental income and EBITDA – lower portfolio valuation leads to net loss in Q1 2023

• Rental income up by 10.3% to USD 34.1 million (Q1 2022: USD 30.9 million)
• EBITDA increase of 20.7% to USD 18.1 million (Q1 2022: USD 15.0 million)
• 1.6% higher average monthly rent per unit at USD 1,152 (as per end of 2022:
  USD 1,134), while average occupancy rate remained stable (93.1%)
• Slightly lower portfolio valuation of USD 45 million (-2.6%) resulting in net loss for Q1 2023
• Pressure on portfolio valuations is expected to continue due to the anticipated further increase of the weighted average capitalization rates

Patrick Richard, Executive Member of the Board of Directors of Varia US, said: "Unrealized losses on fair market value adjustments are market driven and do not affect the underlying operating performance of our Company. In the upcoming quarters, we expect continued pressure on portfolio valuations due to further increase of the weighted average capitalization rates. However, operations are expected to remain strong, and the Board of Directors remains very confident with the Company's performance. Dividends payment will be executed in the quarters to come according to the decisions of the last Shareholder Meeting."

The first quarter of 2023 has proven challenging with harsh conditions continuing to roil the US real estate market. The US central bank Fed continued to raise rates in response to the persistently elevated inflation, partly driven by a tight job market where wages are continuing to increase. However, the pace of Fed rate increases is starting to slow down as the bank sees indications that the inflation is beginning to moderate. At property level, insurance premiums have significantly increased across the US in response to structural challenges as well as exposure to climate risk.

Despite this challenging environment, ongoing operations of Varia US Properties have continued to improve during Q1 2023, thus demonstrating the resilience of the Company's strategy. Rental income is up 10.3% at USD 34.1 million and up 9.9% on a like for like basis. EBITDA is up 20.7% at USD 18.1 million and EBITDA margin sits at 45.0% (Q1 2022: 42.6%).

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