Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q1 2024 Earnings Presentation
21 slides from Killam Apartment Reit's earnings presentation, May 8, 2024
Slide 1: Q1-2024 Results Conference Call
Q1-2024 Results Conference Call May 8, 2024 | 9am EDT
Slide 2: Cautionary Statement
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", "will", "expec
Slide 3: Total Portfolio Results
Q1-2024 | Total Portfolio Results NOI Contribution by Market (%) as at March 31, 2024 . Apt 3.0% Same Property Comm 1.6% PEI 4.6% NOI Growth Apartment .Apt 4.1% 10.4% MHC 0.2% NL 4.3% MHC 9.8% Apt 27.7% Commercial . 9.7% Apt 3.8% MHC 2.4% BC 3.8% Comm 1.6% Apt 22.5% . NS 31.7% MHC 1.5% Apt 20.1% Apt
Slide 4: Performance Against Strategic Targets
Q1-2024 | Performance Against Strategic Targets Grow same property NOI In Q1, Killam achieved same property NOI growth of 10.3%. Based on the results achieved to date in 2024, Killam expects same by minimum 6% property NOI growth in 2024 to exceed 8.0%. In Q1, Killam completed one disposition of lan
Slide 5: Financial Highlights
Q1-2024 | Financial Highlights $127.2M $0.26 10.3% 83% 42.1% Net Income FFO per Unit(1) Same Property AFFO payout Total Debt as a % NOI Growth(2) ratio(3) of Total Assets (4) Includes $55.0 million of 4.0% increase from $0.25 10.3% growth in Q1- A 200-basis point An 80-basis point net operating inco
Slide 6: Continued Top Line Growth
Q1-2024 | Continued Top Line Growth Apartments Same Property Rental Rate Growth by Quarter Upon Lease Renewal For tenants with lease renewals in For new tenants moved in during Upon Unit Turn Q1, rents increased by 3.7%. Q1, rents increased 19.6%. 25% Combined Average Increase % 20% 15% Q1-2024 weig
Slide 7: Effective Cost Containment
Q1-2024 | Effective Cost Containment Total same property operating expenses reduced by 0.7% in Q1-2024 Utility and fuel decreased due to commodity price decrease and reduction in natural gas consumption from a mild winter and energy efficiency investments. Property tax increase due to higher reg
Slide 8: Accretive Runway for New Developments
Q1-2024 | Accretive Runway for New Developments OCCUPANCY(1) 75% 88% 45% Estimated Annual FFO Contribution (2) Q1 FFO & AFFO Per Unit from New Developments in Lease up Q1-2024 Q1-2023 (000’s) $4,000 $3,000 $2,000 $1,000 $0 $0.26 $0.25 $0.21 $0.20 -$1,000 FFO AFFO 2024 2025 (1) Occupancy as of May 6,
Slide 9: Conservative Debt Metrics for Enhanced Flexibility
Q1-2024 | Conservative Debt Metrics for Enhanced Flexibility Interest Coverage Ratio(1) Q1-2024 3.06 2023 3.10 2022 3.31 2021 3.53 2020 3.36 Debt to Normalized EBITDA(2) 10.78 11.33 11.21 10.29 10.16 2020 2021 2022 2023 Q1-2024 Total Debt as a % of Assets(3) 55% 45% 42.1% 35% The Alexander & The Gov
Slide 10: Debt Ladder
Q1-2024 | Debt Ladder Apartment Mortgage Maturities by Year As at March 31, 2024 Mortgage Maturities ($) 5 year estimated CMHC-insured rate 10 year estimated CMHC-insured rate Weighted average interest rate (apartments) $450 5% $400 Weighted Avg Apartment 3.16% 4% Mortgage Interest Rate $350 3.91% $
Slide 11: Turnover Trends by Market
Q1-2024 | Turnover Trends by Market Turnover by Region Q1 2024 2023 Q1-23 Total Portfolio (4.1%) 2023 Total Portfolio (19%) GTA/KWC* 10.40% Halifax* 15.60% PEI* 14.70% Moncton 18.40% London* 19.50% St. John's 18.00% Saint John 22.50% Ottawa * 24.40% Fredericton 27.20% Calgary 27.90% Victoria* 24.80%
Slide 12: Embedded Top Line Growth
Q1-2024 | Embedded Top Line Growth Estimated Total Mark-to-Market Opportunity 50% 40% 28% 28% 28% 30% 25% 25% 17% 18% 20% 11% 12% 10% 10% 0% Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Q1-2024 Estimated Mark-to-Market Spread by Region 39% 35% 30% 27% 26% 24% 20% 14% 14% 1
Slide 13: Investing in Our Existing Portfolio
Q1-2024 | Investing in Our Existing Portfolio After: The Estates – Kitchener, ON After: Northfield Gardens– Kitchener, ON Return on Investment ~20% Average Investment per Suite $35,535 Suites Repositioned in Q1-2024 70 units Targeting 300 suites in 2024 Before: The Estates – Kitchener, ON 13
Slide 14: MHC & Commercial Continue to Deliver Growth
Q1-2024 | MHC & Commercial Continue to Deliver Growth Commercial Same Property For the three months ended Mar 31, 2024 9.7% 6.1% 1.7% Revenue Expense NOI MHC Same Property For the three months ended Mar 31, 2024 9.8% 3.3% (4.6%) Revenue Expense NOI Benjamin Wier House – Halifax, NS 14
Slide 15: Commercial Highlight: Royalty Crossing
Q1-2024 | Commercial Highlight: Royalty Crossing Royalty Crossing Occupancy Gains (1) 96.0% 2020 2021 2022 2023 (1) Occupancy based on leasable square footage. Royalty Crossing NOI Growth (000’s) 2021 $3,331 2022 $3,503 2023 $4,753 $- $1,000 $2,000 $3,000 $4,000 $5,000 15
Slide 16: Capital Recycling – Key Part of the Strategy
Q1-2024 | Capital Recycling – Key Part of the Strategy Capital Allocation Killam’s capital recycling program focuses on reinvesting proceeds from dispositions towards the most accretive and best use of funds to grow FFO and NAV. Strengthen Balance Sheet Fund Development Pipeline Focused on reducing
Slide 17: Future Development Activity
Q1-2024 | Future Development Activity Victoria Gardens – Halifax, NS KMP’s Grid 5 4th & 5th Dev’t Land Nolan Hill Phase 3 – Calgary, AB 4th & 5th Land Purchase – Calgary, AB Wissler – Waterloo, ON 17 NS Harlington Crescent – Halifax,
Slide 18: Development Underway: The Carrick – Waterloo, ON
Q1-2024 | Development Underway: The Carrick – Waterloo, ON Killam obtained attractive financing terms for The Carrick through CMHC’s Apartment Construction Loan Program Progress Shot – April 2024 Number of units 139 Start date Q2-2022 Est. completion date Q2-2025 Project budget $83.5M Cost per unit
Slide 19: Future Development Activity: Eventide – Halifax, NS
Q1-2024 | Future Development Activity: Eventide – Halifax, NS Development Site – April 2024 Number of units 55 Start date Q1-2024 Est. completion date 2026 Project budget $33.6M Cost per unit $611,000 Expected yield 4.50%-5.00% Avg rent $3.50-$3.75 per SF Avg unit size 765 SF Project Rendering: Even
Slide 20: 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 21: Q1-2024 Results Conference Call
Q1-2024 Results Conference Call
Killam Apartment REIT — Q1 2024 Earnings Presentation on 6ix