Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q2 2022 Earnings Presentation
32 slides from Killam Apartment Reit's earnings presentation, Aug 11, 2022
Slide 1: Q2-2022 Results Conference Call
Q2-2022 RESULTS CONFERENCE CALL August 11, 2022 | 10AM Eastern 1
Slide 2: Cautionary Statement
Q2-2022 | Cautionary Statement This presentation may contain forward-looking statements with respect to Killam Apartment REIT ("Killam") and its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "wil
Slide 3: Focus on Long-Term Growth Drivers
Q2-2022 | Focus on Long-Term Growth Drivers NOI Contribution by Market (%) AB | 8.3% NL | 4.6% Calgary | Edmonton St. John’s BC | 3.0% Victoria PEI | 6.2% Charlottetown NS | 34.2% Halifax ON | 23.5% NB | 20.2% Ottawa | London Moncton | Fredericton Toronto | KWC Saint John Killam’s strategy to increa
Slide 4: 2022 Strategic Targets
Q2-2022 | 2022 Strategic Targets Grow Same Property NOI Grow •2022 Target: 2.0% - 3.0% •2022 Performance to-date: 4.8% Expand the Portfolio through Acquisitions Expand •2022 Target: Acquire a minimum of $150M. •2022 Performance to-date: $119 million with acquisitions in Halifax, Waterloo, Guelph, Vi
Slide 5: Financial Highlights
Q2-2022 | Financial Highlights $68.7M $0.28 6.6% 75% 44.3% Net Income FFO per Unit(1) Same Property NOI AFFO payout ratio(4) Total Debt as a % of Total Growth(3) Assets (2) Includes $51.7 million of net A 3.7% increase from $0.27 per AFFO payout ratio (rolling 12 unit in Q2-2021. AFFO per unit 6.6%
Slide 6: Financial Highlights
Q2-2022 | Financial Highlights Same Property Portfolio Performance Q2 FFO & AFFO Per Unit For the three months ended June 30, 2022 Q2-2022 Q2-2021 6.6% 5.2% 2.8% $0.28 $0.27 $0.24 $0.23 Revenue Expense NOI FFO AFFO Same Property Portfolio Performance YTD FFO & AFFO Per Unit For the six months ended
Slide 7: Financial Highlights – Apartments
Q2-2022 | Financial Highlights – Apartments Same Property Occupancy(1) Apt Same Property Occupancy(1) 99% 98.0% 98% 97% 96% 95% 94% 96.9% 97.0% 96.7% 96.6% 98.0% 93% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3
Slide 8: Financial Highlights – Apartments
Q2-2022 | Financial Highlights – Apartments Weighted Average Rental Increases Achieved by Quarter Apt Same Property Avg Rental Upon Lease Renewal Upon Unit Turn Combined Average Increase % Rate Increase 12% Rents were up 8.2% on units where new tenants moved in For tenants with lease renewals during
Slide 9: Financial Highlights
Q2-2022 | Financial Highlights Total same property operating expenses were up 2.8% in Q2-2022. The increase was driven by higher natural gas prices across our core markets which increased our utility and fuel expenses by 9.1%. Same Property Expense Growth 3.1% 3.3% 2.8% 0.9% (0.3%) Q2-2018 Q2-2019 Q
Slide 10: Debt Ladder: Apartment Mortgage Maturities by Year
Q2-2022 | Debt Ladder Apartment Mortgage Maturities by Year As at June 30, 2022 Mortgage Maturities Weighted Average Interest Rate (Apartments) 5 year estimated CMHC insured interest rate 3.7% $450 6% $375 5% Mortgage Maturities ($M) $300 4% Interest Rate $225 2.55% 3.23% 2.63% 3% 2.38% 2.99% 2.05%
Slide 11: Conservative Debt Metrics
Q2-2022 | Conservative Debt Metrics Increasing value of investment properties with conservative debt metrics. Total Debt as a % of Assets(1) Interest Coverage Ratio(2) Debt to Normalized EBITDA(3) 55% 50% 45% 40% 49.8% 43.4% 44.6% 45.0% 44.3% 3.22 3.20 3.36 3.53 3.51 10.62 10.15 10.78 11.33 11.19 35
Slide 12: Increase Earnings from Existing Portfolio
Q2-2022 | Increase Earnings from Existing Portfolio REVENUE OPTIMIZATION • Data driven decisions on leasing, unit renewals and turns to optimize mark-to-market opportunities • Repositioning properties and suites to meet market demand • Building communities EXPENSE MANAGEMENT Q2-2022 Same Property Re
Slide 13: Financial Highlights – MHC
Q2-2022 | Financial Highlights – MHC Same Property MHC NOI Growth Seasonal Resorts Revenue Q2 ($ thousands) Revenue NOI 2022 $1,923 11.4% 8.5% 2021 $1,665 7.3% 6.5% 5.7% 4.3% 2020 $1,523 2.0% 1.8% 1.6% (3.1%) Strong growth in revenue from Killam’s nine seasonal resort communities, including 15.5% in
Slide 14: Financial Highlights – Commercial
Q2-2022 | Financial Highlights – Commercial Same Property Commercial NOI Growth Revenue NOI 22.8% 12.1% 11.6% 9.8% 7.6% 4.4% (2.2%) (3.1%) Royalty Crossing, Charlottetown Q2-2019 Q2-2020 Q2-2021 Q2-2022 Commercial Portfolio 946,372 SF Other Brewery Westmount Market, Place, Halifax Waterloo Royalty C
Slide 15: Affordability and Value Delivery
Q2-2022 | Affordability and Value Delivery Killam delivers affordable, safe, clean and high-quality housing to our residents across Canada: 42% of Killam’s portfolio rents for less than $1,100 per month. Average rent is $1.44 per SF across the portfolio. Killam supports affordable housing with
Slide 16: Acquisitions
Q2-2022 | Acquisitions Annual Acquisitions ($ millions) Acquisitions $399 $315 $200 $200 $191 $211 $167 $160 $103 $125 $36 $115 $106 $121 $119 $16 $45 $3 $85 $72 $54 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD 2022 NOI Generated Outside Atl
Slide 17: Acquisition in Guelph, ON
Q2-2022 | Acquisition in Guelph, ON 671 & 665 Woolwich | Guelph 84 units | 99% leased Avg Monthly Rent $1,218 per unit Acquisition Details: $25.0 million • $21.0 million ($250,000/unit) • $4.0 million – development land 3.2% capitalization rate Acquisition date: April 29, 2022 17
Slide 18: Acquisition in Courtenay, BC – The Shores
Q2-2022 | Acquisition in Courtenay, BC The Shores| Courtenay Acquisition Details: 94 units | 100% leased $33.7 million ($359,000/unit) Avg Monthly Rent $1,641 per unit 3.94% capitalization rate Acquisition date: May 18, 2022 1849 & 1876 Riverside Lane, Courtenay 18 18
Slide 19: Acquisition in Courtenay, BC – The Residences
Q2-2022 | Acquisition in Courtenay, BC The Residences | Courtenay 56 units | 100% leased Courtenay- Avg Monthly Rent $1,608 per unit Comox Vancouver Victoria Acquisition Details: $21.9 million ($391,000/unit) 3.75% capitalization rate Acquisition date: May 18, 2022 621 Crown Island Blvd, Courtenay 1
Slide 20: Investing in our Properties
Q2-2022 | Investing in our Properties Northfield Gardens - Before Suite Repositioning Program 2022 PROGRAM • 600 suite repositions • ~$15-18M investment • ~$2.0-2.3M annualized revenue growth Based on a 4.4% cap rate this investment would increase the NAV by Northfield Gardens - After ~$325M. YTD 20
Slide 21: Strong Leasing of Developments Continue
Q2-2022 | Strong Leasing of Developments Continue Latitude | 209 units The Kay | 128 units Luma | 168 units Opened Jan 2022 Opened April 2022 Opened June 2022 The above three developments are leasing ahead of expectations. They are forecasted to contributed $2.7 million to NOI in 2022 and over $5.5
Slide 22: The Kay – Mississauga, Ottawa
Q2-2022 | The Kay – Mississauga, Ottawa Avg Rent: The Kay Leasing Activity $3.04/ft2 24% 52% 73% 93% 100% 22
Slide 23: Development Activity - Ottawa
Q2-2022 | Development Activity - Ottawa LUMA – 168-unit development in Ottawa Progress shots as of June 2022 Key Statistics Number of units 168 Estimated completion date July 2022 Project budget ($M)(1) $48.0 Cost per unit $571,000 Expected yield 4.00%-4.25% Expected value cap-rate 3.5% Avg rent $2.
Slide 24: Development Progress
Q2-2022 | Development Progress Killam currently has three developments underway, which will add an additional 320 new high-quality suites to Killam’s portfolio in the next three years.(1) Governor | 12 units Civic 66 | 169 units The Carrick | 139 units Halifax Kitchener Waterloo (1) Cost $24M $70M $
Slide 25: Development Activity – The Governor, Halifax
Q2-2022 | Development Activity – The Governor, Halifax Luxury suites adjacent to existing properties; The Alexander & Brewery Market Key Statistics Number of units 12 Start date Latitude (Phase II) Q1-2021 GREEN FEATURES: Sub-metered Est. completion date Q4-2022 water, geothermal heating and cooling
Slide 26: Development Activity – The Governor, Halifax
Q2-2022 | Development Activity – The Governor, Halifax The Governor - 12 luxury suites and 3,500 square foot ground floor commercial development in downtown Halifax Progress shots as of June 2022 26
Slide 27: Development Activity – Civic 66
Q2-2022 | Development Activity – Civic 66 CIVIC 66 – 169-unit development in Kitchener that broke ground in Q3-2020 and is expected to be completed by Q1-2023. Latitude (Phase II) GREEN FEATURES: Sub- Key Statistics metered water, geothermal heating and cooling Number of units 169 Start date Q3-2020
Slide 28: Development Activity – Civic 66
Q2-2022 | Development Activity – Civic 66 Progress shots as of June 2022 28 28
Slide 29: Future Development Activity – Waterloo
Q2-2022 | Future Development Activity – Waterloo WESTMOUNT PHASE 1 (The Carrick) – Broke ground on the 139-unit development in Waterloo in Q2-2022. Key Statistics Number of units 139 Start date Q2-2022 Est. completion date 2024 Project budget ($M) $83.5 Cost per unit $601,000 Expected yield 4.00%-4.
Slide 30: Commitment to Green
Q2-2022 | Commitment to Green Increasing earnings from operations through energy efficiency. Includes increasing the installations of photovoltaic solar panels, smart metering, decreasing peak electric demand, water conservation projects and heating efficiencies at Killam’s existing properties. 75 K
Slide 31: Non-IFRS Measures
Non-IFRS Measures Management believes the following non-IFRS financial measures, ratios and supplementary information are relevant measures of the ability of Killam to earn revenue and to evaluate Killam's financial performance. Non-IFRS measures should not be construed as alternatives to net income
Slide 32: Q2-2022 Results Conference Call
Q2-2022 RESULTS CONFERENCE CALL August 11, 2022 | 10AM Eastern 32
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