Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Killam Apartment Real Estate Investment Trust — Q3 2024 Earnings Presentation
26 slides from Killam Apartment Reit's earnings presentation, Nov 7, 2024
Slide 1: Q3-2024 Results Conference Call
Q3-2024 Results Conference Call November 7, 2024 | 9:00am EDT 1
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: Q3-2024 Total Portfolio Results
Q3-2024 | Total Portfolio Results NOI Contribution by Market (%) as at September 30, 2024 . Apt 3.1% 2024 YTD Same Property Comm 1.6% PEI 4.7% NOI Growth . Apartment Apt 4.2% 9.0% MHC 0.2% NL 4.4% MHC 6.6% Apt 27.9% Commercial . Apt 3.6% 6.4% MHC 2.4% . BC 3.6% Comm 1.5% NS 31.8% Apt 20.7% Apt 19.5%
Slide 4: Performance Against Strategic Targets
Q3-2024 | Performance Against Strategic Targets Grow same property NOI Year-to-date, Killam achieved same property NOI growth of 8.7%. 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 five disp
Slide 5: Financial Highlights
Q3-2024 | Financial Highlights $62.7M $0.33 7.4% 71% 40.7% Net Income FFO per Unit(1) Same Property AFFO payout Total Debt as a % NOI Growth(2) ratio(3)(4) of Total Assets (5) Includes $64.4 million of 3.3% increase from $0.32 7.4% growth in Q3-2024 A 100-basis point A 220-basis point net operating
Slide 6: Continued Top Line Growth
Q3-2024 | 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 Q3, rents increased by 4.7%. Q3, rents increased 20.5%. 25% Combined Average Increase % 20% 15% 8.2% 7.7% 7.
Slide 7: Effective Cost Containment
Q3-2024 | Effective Cost Containment Total same property operating expenses increased by 2.6% in Q3-24 Driven by a 5.2% increase in property taxes due to increased assessment values across the portfolio, higher mill rates in Ontario and no property tax subsidies in PEI. Mitigated by a 4.0% decre
Slide 8: FFO Growth
Q3-2024 | FFO Growth Q3 FFO & AFFO Per Unit YTD FFO & AFFO Per Unit Q3-2024 Q3-2023 2024 2023 $0.33 $0.32 $0.28 $0.28 $0.88 $0.87 $0.75 $0.73 FFO AFFO FFO AFFO Luma – Ottawa, ON The Killick – Halifax, NS Crossing at Belmont – Victoria, BC 8
Slide 9: Accretive Runway for New Developments
Q3-2024 | Accretive Runway for New Developments 88% LEASE UP(1) INITIAL Estimated Quarterly FFO Estimated Annual FFO from Lease Up of New Developments from New Developments in Lease up (000’s) (000’s) Q3-2024 $4,000 Q4-2024 $3,000 Q1-2025 $2,000 Q2-2025 $1,000 Q3-2025 $0 Q4-2025 -$1,000 $0 $500 $1,0
Slide 10: Debt Ladder
Q3-2024 | Debt Ladder Apartment Mortgage Maturities by Year As at September 30, 2024 Mortgage Maturities ($) 5 year estimated CMHC-insured rate 10 year estimated CMHC-insured rate Weighted average interest rate (apartments) $500 5% $450 Weighted Avg Apartment 3.45% $400 4% Mortgage Interest Rate $35
Slide 11: Conservative Debt Metrics for Enhanced Flexibility
Q3-2024 | Conservative Debt Metrics for Enhanced Flexibility Total Debt as a % of Assets(3) 55% 45% 40.7% 35% 2014 2016 2018 2020 2022 Q3-2024 Debt to Normalized EBITDA(2) 10.78 11.33 11.21 10.29 9.87 2020 2021 2022 2023 Q3-2024 Latitude – Ottawa, ON 1) 2) Debt to normalized EBITDA is a non-IFRS rat
Slide 12: New Lease Spreads by Region
Q3-2024 | New Lease Spreads by Region Rent per Square Foot (SF) Achieved on New Leases Signed Achieved on new leases in Q3-2024 Achieved on new leases in Q3-2023 Avg In-place Rent per SF across Portfolio Change in Rent per SF Achieved on New Leases $3.50 $1.00 Change in Rent per SF Achieved $0.90 $3
Slide 13: Diversified Portfolio Outperforming
Q3-2024 | Diversified Portfolio Outperforming Apartments Same Property Rental Rate Growth by Region in Q3-2024 Upon Lease Renewal Upon Unit Turn Combined Average Increase % Overall Growth on Unit Turn 35% 30% 25% 20% 15% 10% 5% 0% Saint John Halifax Moncton British Columbia Ontario Fredericton Alber
Slide 14: Mark-to-Market Against Turnover by Region
Q3-2024 | Mark-to-Market Against Turnover by Region Estimated Total Mark-to-Market Opportunity 50% 40% 28% 28% 28% 30% 25% 25% 25% 22% 17% 18% 20% 12% 10% 0% Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Q1-2024 Q2-2024 Q3-2024 Estimated Mark-to-Market Spread and YTD Turnover by Region MTM
Slide 15: Supply Gap Persists in Halifax
Q3-2024 | Supply Gap Persists in Halifax Halifax Annual Starts & Completions Starts Completions 5,000 4,000 3,000 2,000 1,000 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD 2024 Housing Starts Remain Steady as a Percentage of Population Growth Halifax Population Growth Total Starts 25,
Slide 16: Portfolio Positioned for Market Resilience
Q3-2024 | Portfolio Positioned for Market Resilience Killam’s Portfolio Distribution by Monthly Rent # Units % of Portfolio (18,662 units) 6,000 30% 22% 21% 4,000 20% 15% 15% 15% 12% 2,000 10% 0 0% Average asking rent on new multi-family developments leasing up in Halifax and KWC ranges from $1,700-
Slide 17: Investing in Renewable Energy
Q3-2024 | Investing in Renewable Energy In November 2024, Killam will be installing its first virtual net metering solar panel project at Quinpool Tower in Halifax, NS. This will allow the surplus energy(1) generated to be transferred to its neighboring property, As at September 30, 2024 Quinpool To
Slide 18: Capital Recycling: Key Part of the Strategy
Q3-2024 | Capital Recycling: Key Part of the Strategy Recycling capital, divesting of slow growth assets and lower yielding assets, while focusing on Killam’s development program and strengthening its balance sheet are key components of Killam’s strategy. 2024 Dispositions Sale Price Property Locati
Slide 19: Development Underway: The Carrick – Waterloo, ON
Q3-2024 | Development Underway: The Carrick – Waterloo, ON Progress Shot – Oct 2024 Number of units 139 Start date Q2-2022 Est. completion date ~June 2025 Project budget $89M Cost per unit $640,000 Expected yield(1) 4.00%-4.25% Avg rent $2.75-$3.00 per SF Avg unit size 800 SF 19 (1) Anticipated all-
Slide 20: Development Underway: Eventide – Halifax, NS
Q3-2024 | Development Underway: 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 –Oct 2024 20
Slide 21: Future Development: Nolan Hill – Calgary, AB
Q3-2024 | Future Development: Nolan Hill 3 – Calgary, AB Nolan Hill, Phases I and II Nolan Hill Phase 3 is the third phase of a multi-phase development in Calgary, AB. These two towers will comprise 296 units. The development includes a clubhouse with a fitness center, indoor court, and amenity room
Slide 22: Future Development: Wissler – Waterloo, ON
Q3-2024 | Future Development: Wissler – Waterloo, ON Demolition of the vacant commercial building on site has started. The Wissler development is a 128-unit apartment adjacent to Killam’s Northfield Gardens in Waterloo, ON. Northfield Gardens Wissler - Rendering Wissler 22
Slide 23: Future Development: Victoria Gardens – Halifax, NS
Q3-2024 | Future Development: Victoria Gardens – Halifax, NS Victoria Gardens is a multi-phase development opportunity in Halifax, NS. Phase 1 will comprise of 95 units to 10 acres be built on a vacant parcel within the of land 10-acre site, resulting in minimal disruption to existing tenants. Victo
Slide 24: Current Development Pipeline
Q3-2024 | Current Development Pipeline Wissler Victoria Gardens Harlington Nolan Hill Phase 3 Waterloo, ON Halifax, NS Halifax, NS Calgary, AB 128 units 95 units (Phase 1) 150 units 296 units 2026 Est. Completion 2026 Est. Completion 2027 Est. Completion 2028 Est. Completion Starting demolishing wor
Slide 25: 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 26: Q3-2024 Results Conference Call
Q3-2024 Results Conference Call 26
Killam Apartment Real Estate Investment Trust — Q3 2024 Earnings Presentation on 6ix