Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q2 2024 Earnings Presentation
21 slides from Killam Apartment Reit's earnings presentation, Aug 8, 2024
Slide 1: Q2-2024 Results Conference Call
Q2-2024 Results Conference Call August 8, 2024 | 8:00am 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
Q2-2024 | Total Portfolio Results NOI Contribution by Market (%) as at June 30, 2024 . Apt 3.2% 2024 YTD Same Property Comm 1.6% PEI 4.8% NOI Growth . Apartment Apt 4.2% 9.5% MHC 0.2% NL 4.4% MHC 8.7% Apt 27.7% Commercial . Apt 3.7% 7.2% MHC 2.4% . BC 3.7% Comm 1.6% NS 31.7% Apt 21.5% Apt 19.6% . .
Slide 4: Performance Against Strategic Targets
Q2-2024 | Performance Against Strategic Targets Grow same property NOI Year-to-date, Killam achieved same property NOI growth of 9.3%. Based on the results achieved to date in 2024, Killam expects same by minimum 6% property NOI growth in 2024 to exceed 8.0%. Year-to-date, Killam completed two dispo
Slide 5: Financial Highlights
Q2-2024 | Financial Highlights $114.5M $0.30 8.5% 69% 41.2% Net Income FFO per Unit(1) Same Property AFFO payout Total Debt as a % NOI Growth(2) ratio(1) of Total Assets (3) Includes $59.9 million of FFO per unit remained at 8.5% growth in Q2-2024 A 100-basis point A 170-basis point net operating in
Slide 6: Continued Top Line Growth
Q2-2024 | 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 Q2, rents increased by 4.6%. Q2, rents increased 20.2%. 25% Combined Average Increase % 20% 15% 8.2% 7.5% 10
Slide 7: Embedded Top Line Growth
Q2-2024 | Embedded Top Line Growth Estimated Total Mark-to-Market Opportunity 50% 40% 28% 28% 28% 30% 25% 25% 25% 17% 18% 20% 11% 12% 10% 0% Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Q1-2024 Q2-2024 Estimated Mark-to-Market Spread by Region 35% 32% 22% 22% 21% 21% 15% 13% 11% 1
Slide 8: Effective Cost Containment
Q2-2024 | Effective Cost Containment Total same property operating expenses increased modestly by 1.7% in Q2-24 Driven by a 6.6% increase in property taxes due to increased assessments across the portfolio, higher mill rates in various regions and no property tax subsidies in PEI. Mitigated by a
Slide 9: FFO Growth Outlook
Q2-2024 | FFO Growth Outlook Q2 FFO & AFFO Per Unit FFO growth per unit was tempered in Q1 & Q2 from the Q2-2024 Q2-2023 lease-up of three new developments that came online in the second half of 2023. These new developments are expected contribute positively to FFO growth starting in Q3-2024, with a
Slide 10: Accretive Runway for New Developments
Q2-2024 | Accretive Runway for New Developments OCCUPANCY(1) FULL FULL 76% Estimated Quarterly FFO Impact (2) Estimated Annual FFO Impact (2) from Lease Up of New Developments from New Developments in Lease up (000’s) (000’s) Q1-2024 $4,000 Q2-2024 $3,000 Q3-2024 Q4-2024 $2,000 Q1-2025 $1,000 Q2-202
Slide 11: Debt Ladder
Q2-2024 | Debt Ladder Apartment Mortgage Maturities by Year As at June 30, 2024 Mortgage Maturities ($) 5 year estimated CMHC-insured rate 10 year estimated CMHC-insured rate Weighted average interest rate (apartments) $450 5% $400 Weighted Avg Apartment 3.32% 4% Mortgage Interest Rate $350 3.93% $3
Slide 12: Conservative Debt Metrics for Enhanced Flexibility
Q2-2024 | Conservative Debt Metrics for Enhanced Flexibility Total Debt as a % of Assets(3) 55% 45% 41.2% 35% 2014 2016 2018 2020 2022 Q2-2024 Debt to Normalized EBITDA(2) 10.78 11.33 11.21 10.29 9.98 2020 2021 2022 2023 Q2-2024 Interest Coverage Ratio(1) Q2-2024 3.01 2023 3.10 2022 3.31 2021 3.53 T
Slide 13: Strong Summer Seasonal Results
Q2-2024 | Strong Summer Seasonal Results Seasonal MHC SP Portfolio Family Paradise – Ontario For the three months ended June 30, 2024 7.6% 6.7% 5.1% Revenue Expense NOI Camper’s City – New Brunswick Permanent MHC SP Portfolio For the three months ended June 30, 2024 7.3% 2.4% (7.3%) Cedardale – Onta
Slide 14: Impactful ESG Report Highlights
Q2-2024 | Impactful ESG Report Highlights Killam’s 2023 ESG Report was released in June 2024. Highlights from the year include the following: 14
Slide 15: Renewable Energy at Westmount Place
Q2-2024 | Renewable Energy at Westmount Place In 2023, Killam saved an estimated $200,000 in energy costs from our 23 properties producing solar energy, resulting in an average ROI of 6.1%. Westmount Place is home to our largest PV solar array with an estimated annual production of 453,000 kWh/year.
Slide 16: Capital Recycling – Key Part of the Strategy
Q2-2024 | Capital Recycling – Key Part of the Strategy Acquisitions Purchase Price Property Location Acquisition Date Units ($ 000’s) 5 & 35 Harlington Crescent Halifax, NS January 2024 $11,000 50 425 5 St SW Calgary, AB February 2024 $3,000 Land 105 Elmira Rd North [70% interest] Guelph, ON June 20
Slide 17: Future Development Activity
Q2-2024 | Future Development Activity Victoria Gardens – Halifax, NS Nolan Hill Phase 3 – Calgary, AB KMP’s Grid 5 4th & 5th Dev’t Land 4th & 5th Land Purchase – Calgary, AB Wissler – Waterloo, ON Harlington Crescent – Halifax, NS 17
Slide 18: Development Underway: The Carrick – Waterloo, ON
Q2-2024 | Development Underway: The Carrick – Waterloo, ON Progress Shot – July 2024 Number of units 139 Start date Q2-2022 Est. completion date Second half of 2025 Project budget $83.5M Cost per unit $601,000 Expected yield(1) 4.00%-4.25% Avg rent $2.75-$3.00 per SF Avg unit size 840 SF (1) Anticip
Slide 19: Future Development Activity: Eventide – Halifax, NS
Q2-2024 | Future Development Activity: Eventide – Halifax, NS Project Rendering Number of units 55 Start date Q1-2024 Est. completion date Q2-2026 Project budget $34.1M Cost per unit $620,000 Expected yield 4.50%-5.00% Avg rent $3.50-$3.75 per SF Avg unit size 765 SF Development Site – Halifax, NS (
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: Q2-2024 Results Conference Call
Q2-2024 Results Conference Call
Killam Apartment REIT — Q2 2024 Earnings Presentation on 6ix