Kennedy-wilson Holdings Inc. · NYSE:KW
Kennedy-wilson — Q3 2021 Earnings Presentation
39 slides from Kennedy-wilson's earnings presentation, November 2021
Slide 1: 3Q-21 Investor Update
3Q-21 Investor Update (As of September 30, 2021)
Slide 2: Disclaimer/Forward-Looking Statements
Disclaimer/Forward-Looking Statements Statements made by us in this presentation and in other reports and ability to acquire additional real estate assets; continued high levels of, or statements released by us that are not historical facts constitute “forward- increases in, unemployment and a gener
Slide 3: Table of Contents
Table of Contents Page Strategic Review 3 Financial Review 17 Western U.S. Markets 20 European Markets 25 Appendix 32 2 3Q-21 INVESTOR UPDATE
Slide 4: Strategic Review
Overview Strategic Review 3 3Q-21 INVESTOR UPDATE
Slide 5: 3Q-21 highlights
3Q-21 highlights • 3Q GAAP EPS: $0.47 per diluted share (vs -$0.18 in 3Q-20) Strong Financial 1 • 3Q Adjusted EBITDA: $203m (vs $76m in 3Q-20) Results • 3Q Adjusted Net Income: $112m (vs $27m in 3Q-20) Completed • 7% Increase in Fee-Bearing Capital to $4.8bn in 3Q 2 $1.8bn of Inv. • $10m Increase in
Slide 6: Kennedy Wilson at a glance
Kennedy Wilson (NYSE:KW) at a glance $21bn 33,400 Real Estate AUM1 Multifamily Units 4.3% 22m Dividend Yield2 Commercial Sq Ft 1 As defined in definitions section in the appendix 5 3Q-21 INVESTOR UPDATE 2 Based on annual dividend of $0.96 and share price of $22.46 on 11/02/21 Capital Dock, Dublin, I
Slide 7: About Kennedy Wilson
About Kennedy Wilson We are a leading global real estate investment company. We own, operate and invest in real estate directly and through our investment management platform. We focus on multifamily and office properties located in the Western U.S., UK, and Ireland. Office: 150 El Camino Multifamil
Slide 8: The Kennedy Wilson Advantage
The Kennedy Wilson Advantage 1 Globally diversified real estate portfolio in growing markets with complementary investment management platform 2 Long-term relationships with major financial institutions 3 Local expertise to accretively allocate capital 4 First-mover advantage from early entry in key
Slide 9: Real Estate Portfolio and Value Creation Opportunities
Real Estate Portfolio and Value Creation Opportunities 8 3Q-21 INVESTOR UPDATE
Slide 10: Two key investment segments
Two key investment segments Consolidated Portfolio Co-Investment Portfolio Targeting wholly-owned investments Includes real estate and loan with accretive asset management investments with strategic partners and opportunities commingled fund business (KW ownership 5-50%) $273m 98% $140m $4.8bn Estim
Slide 11: Excellent scale across multifamily and office
Excellent scale across multifamily and office 83% Multifamily & Office Sectors Geography Multifamily: 49% Western U.S.: 57% Office: 34% U.K.: 20% $413m Retail: 11% $413m Ireland: 19% Estimated Hotel/Loans/ Estimated Italy & Spain: 4% Annual NOI1 Industrial: 6% Annual NOI1 336 33,403 21.5 94.8% No. o
Slide 12: Suburban assets comprise 74% of multifamily and office NOI
Suburban assets comprise 74% of multifamily and office NOI Multifamily and Office Suburban: 74% Urban: 28% Multifamily: Mission Hills $344m Camarillo, CA, U.S. Estimated Annual NOI1 Office: Hamilton Landing Novato, CA, U.S. 1 As defined in definitions section in the appendix 11 3Q-21 INVESTOR UPDATE
Slide 13: Office NOI: 89% from low and mid-rise properties
Office NOI: 89% from low and mid-rise properties Low/Mid/High-Rise Low-rise: 33% Mid-rise: 56% $140m High-rise: 11% Estimated Annual NOI1 Low-rise office: The Heights Weybridge, UK Tenant Concentration Single Tenant /Business Park: 76% $140m Multiple: 24% Estimated Annual NOI1 Mid-rise office: 90 Ea
Slide 14: Development and leasing pipeline to add ~$106m in NOI
Development and leasing pipeline to add ~$106m in NOI By YE-2021 2022-2025 $5m $101m Capital Dock, Dublin 2 Dovetail, Boise, Idaho Kona Village Resort, Kona, Hawaii Old School, U.K. Kildare Street, Dublin 2 Coopers Cross, Dublin Hanover Quay, Dublin 2 Grange, Dublin University Glen, Camarillo, CA Ba
Slide 15: NOI delivery from completion of development & future leasing
NOI delivery from completion of development & future leasing +$106m if Est. Ann. NOI by 2025 60.0 $53 50.0 $22 40.0 $32 30.0 20.0 $22 $31 $11 10.0 $3 $10 $8 $5 $5 - 2021 2022 2023 2024 2025 U.S. Europe 14 3Q-21 INVESTOR UPDATE
Slide 16: Investment Management Platform
Investment Management Platform 15 3Q-21 INVESTOR UPDATE
Slide 17: Fee-Bearing Capital raised from broad institutional investor base
Fee-Bearing Capital raised from broad institutional investor base Investor Type Investor By Geography Investor Type Geography Insurance Company: 42% U.S.: 33% $4.8bn $4.8bn Pension Fund: 17% Canada: 27% Sovereign Wealth Fund: 17% Asia: 21% Fee-Bearing Private Equity: 10% Fee-Bearing Europe: 11% Capi
Slide 18: Financial Review
Overview Financial Review 17 3Q-21 INVESTOR UPDATE
Slide 19: Solid balance sheet with strong liquidity position
Solid balance sheet with strong liquidity position Cash and Credit Facility Reduced floating rate risk Cash: $652m Fixed: 77% $1.2bn Revolving credit facility: $500m 89% Fixed or Hedged via interest rate cap: 12% Cash and Lines hedged debt Floating: 11% of Credit (KW Share) Strong credit profile ✓ 3
Slide 20: Components of Value
Components of Value Below are key valuation metrics as of September 30, 2021. Investments Kennedy Wilson’s Share ($ in millions) Income Producing Assets Description Est. Annual NOI(1)(2) 1 Multifamily 28,459 units $204.5 2 Office 9.9 million sq ft 138.7 3 Retail and Industrial 9.1 million sq ft 51.8
Slide 21: Western U.S. Markets
Western U.S. Markets 20 3Q-21 INVESTOR UPDATE
Slide 22: U.S. stabilized portfolio
U.S. stabilized portfolio 92% Multifamily & Office Sectors Geography Multifamily: 75% Pacific Northwest: 35% $237m $237m Office: 17% Mountain West: 31% Retail/Industrial: 5% Southern California: 18% Estimated Loans: 3% Estimated Northern California: 16% Annual NOI1 Annual NOI1 1 As defined in defini
Slide 23: Mountain West represents largest apartment region
Mountain West represents largest apartment region As of 3Q-21 $63m Estimated Annual NOI1 Other 9% Colorado Idaho Alpine Meadows, Sandy, UT 15% 33% Nevada Utah 19% 24% Whitewater Park, Boise, ID 1 As defined in definitions section in the appendix 22 3Q-21 INVESTOR UPDATE
Slide 24: Mountain West multifamily portfolio growth
Mountain West multifamily portfolio growth 200% growth in since 2018 4Q-17 3Q-21 $21m 200% $63 1 Est. Ann. NOI Multifamily units (stabilized) 4,400 125% 9,900 Multifamily units (under development) 845 985 1 As defined in definitions section in the appendix 23 3Q-21 INVESTOR UPDATE
Slide 25: Vintage Housing: Growing our portfolio with minimal equity
Vintage Housing: Growing our portfolio with minimal equity 18% growth in stabilized units by YE-23 At acquisition (2Q-15) 3Q-21 4Q-23 1 Communities (stabilized) 30 42 51 Stabilized units 5,500 8,595 10,542 Vintage at Urban Center, Southside by Vintage, Steamboat by Vintage, Lynwood, WA, U.S. Seattle
Slide 26: European Markets
European Markets 25 3Q-21 INVESTOR UPDATE
Slide 27: Europe stabilized portfolio
Europe stabilized portfolio 91% Ireland and UK Sectors Geography Office: 56% United Kingdom: 47% $176m $176m Retail: 20% Ireland: 44% Multifamily: 15% Italy: 5% Estimated Hotel: 5% Estimated Spain: 4% Annual NOI1 Industrial/Loans: 4% Annual NOI1 1 As defined in definitions section in the appendix 26
Slide 28: Irish multifamily: market imbalance creates opportunity
Irish multifamily: market imbalance creates opportunity Low institutional ownership 342,612 Private rental units <5% Owned by institutional in Ireland1 landlords2 Urgent need for new residential stock 34,000 Annual residential 27,000 Forecast new units requirement3 in 20224 Fewer apartment dwellers
Slide 29: Ireland: KW's dominant presence in Dublin
Ireland: KW’s dominant presence in Dublin 1 Capital Dock 2 Hanover Quay Liffey Trust 3 1 12 8 Alliance 2 4 Northbank 3 State 4 5 Street 11 Alto Vetro 6 5 9 6 10 7 Coopers Cross 8 7 9 10 11 12 KW owned buildings 28 3Q-21 INVESTOR UPDATE
Slide 30: Ireland: resilient growth market opportunity
Ireland: resilient growth market opportunity Economic & Market overview One of the most defensive Destination for the world’s global economies fastest growing industries4 +4.9% GDP growth pa1 Global leader in innovation 1st Top 20 World ranking World ranking Top choice for UK to EU Brexit for Ecolog
Slide 31: Strong office fundamentals and favorable UK & Irish lease structures
Strong office fundamentals and favorable UK & Irish lease structures 1 UK & Irish leases KW UK & Ireland office portfolio Long-term with 5-year rent reviews 99% 40% FRI leases Upward-only rent Upward-only rent reviews or fixed reviews in UK (and pre- uplifts 2010 in Ireland) ‘Full repairing and 8.3y
Slide 32: Robust European office fundamentals driving future growth
Robust European office fundamentals driving future growth Key European office markets for KW M25 London 3Q-21 Watford South East 3Q-21 Harlow Prime rents (£ psf)120.00 Prime rents (£ psf) 38.50 1 M25 London Take-up (m sq ft) 6.5 Reading Windsor Take-up (m sq ft)1 2.2 Vacancy (%) 9.1 Hook Farnborough
Slide 33: Appendix
Overview Appendix 32 3Q-21 INVESTOR UPDATE
Slide 34: Multifamily Portfolio: $205m of Estimated Annual NOI
1 Multifamily Portfolio: $205m of Estimated Annual NOI U.S. Ireland $177.6m 1 Boise $26.9m 1 Est. Ann. NOI Est. Ann. NOI Assets Units Seattle WA Assets Units 3 100 2 26,114 2 Portland 10 2,3463 $62.7m OR $16.2m Mountain West (UT, ID, NV) ID Dublin Assets Units Assets Units 36 9,931 Reno CA 7 1,424 S
Slide 35: Office Portfolio: $139m of Estimated Annual NOI
1 Office Portfolio: $139m of Estimated Annual NOI U.S. Europe $40.6m Seattle $98.1m Est. Ann. NOI 1 WA Est. Ann. NOI 1 Assets Area (sq ft) MT Assets Area (sq ft) 2 2 3 21 6.2m OR 29 3.7m3 ID $18.1m WY $57.3m Pacific Northwest CA UK Assets Area (sq ft) San NV Francisco Assets Area (sq ft) Dublin 3 1.
Slide 36: KW top 20 assets
KW top 20 assets 1 Accounts for 41% of Estimated Annual NOI KW share Commercial Units Acquisition 2 Asset name Location Region Sector of NOI (000 sq ft) /rooms date 1 90 East Issaquah, WA Pacific Northwest Office 15.0 587 - Jun-17 2 Bella Vista Richmond, CA Nor. California Multifamily 14.2 - 1,008 M
Slide 37: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA ($ in m) 3Q-21 2020 2019 2018 2017 2016 2015 Net (loss) income $72.5 $107.8 $321.1 $212.1 $138.0 $76.5 $59.0 Non-GAAP adjustments: Add back: Interest expense 45.3 201.9 214.2 238.2 217.7 191.6 155.7 Loss on early extinguishment of debt - 9.3 0.9 - - -
Slide 38: Reconciliation of Net Income to Adjusted Net Income
Reconciliation of Net Income to Adjusted Net Income ($ in m) 3Q-21 2020 2019 2018 2017 2016 2015 Net (loss) income $72.5 $107.8 $321.1 $212.1 $138.0 $76.5 $59.0 Non-GAAP adjustments: Add back (less): Depreciation and amortization 39.2 179.6 187.6 206.1 212.5 198.2 166.3 Kennedy Wilson’s share of dep
Slide 39: Appendix: Definitions
Appendix DEFINITIONS: Adjusted EBITDA: represents net income before interest expense, loss on early extinguishment of debt, our share of interest expense included in unconsolidated investments, depreciation and amortization, our share of depreciation and amortization included in unconsolidated inves
Kennedy-Wilson Holdings — Q3 2021 Earnings Presentation on 6ix