Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q3 2015 Earnings Presentation
26 slides from Killam Apartment Reit's earnings presentation, Nov 4, 2015
Slide 1: Q3-2015 Results Conference Call
Q3-2015 Results Conference Call Nov 4, 2015 11 am EST
Slide 2: Cautionary Statement
Cautionary Statement This presentation may contain forward-looking statements with respect to Killam P r o p e r t i e s I n c . a n d i t s o p e r a t i o n s , s t r a t e g y, f i n a n c i a l p e r f o r m a n c e a n d c o n d i t i o n . These statements generally can be identified by use of
Slide 3: Highlights from Q3-2015
Highlights from Q3-2015 • Generated FFO per share of $0.24, a 4.3% increase from $0.23 in Q3-2014. • Increased same store rental revenue by 2.6%. • Achieved same store NOI growth of 4.0%. • Completed an $8.4 million acquisition, expanding Killam’s opportunities for future development. • Achieved int
Slide 4: 2015 Targets
2015 Targets % of Acquisitions Outside Same Store Acquisitions Atlantic Canada 2014 & NOI Growth 2015 Target $75 Million +50% 0% ‐ 2% Q1 2015 Increased to 2% ‐ 4% YTD $44 Million 0% 4.3% Progress 4
Slide 5: 4.3% FFO Per Share Growth in Q3-2015
4.3% FFO Per Share Growth in Q3-2015 Q3 FFO Per Share YTD FFO Per Share For the 9 months ended Sept 30, $0.24 $0.23 $0.59 $0.21 $0.54 $0.53 Q3-2013 Q3-2014 Q3-2015 2013 2014 2015 5
Slide 6: 4.0% Same Store NOI Growth in Q3
4.0% Same Store NOI Growth in Q3 Same Store Results 3 months ended Sept 30, 2015 Revenue Expenses NOI 6.8% 5.0% 3.6% 4.0% 2.3% 2.6% 1.9% 0.3% 0.1% Apartments MHCs Consolidated 6
Slide 7: 4.3% Same Store NOI Growth YTD
4.3% Same Store NOI Growth YTD Same Store Results 9 months ended Sept 30, 2015 Revenue Expenses NOI 4.8% 4.2% 4.2% 4.3% 3.4% 2.2% 2.4% (0.4%) 0.0% Apartments MHCs Consolidated 7
Slide 8: Strong NOI Growth in 2015
Strong NOI Growth in 2015 Historic Change in Same Store NOI 2010-2015 12.0% 10.0% Average quarterly NOI 8.0% growth of 1.7% from 2010-2015. 6.0% 4.0% 2.0% 0.0% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2
Slide 9: 2.4% Same Store Revenue Growth in 2015
2.4% Same Store Revenue Growth in 2015 Historic Change in Same Store Revenue Growth 2010-2015 Average quarterly 4.0% same store revenue growth of 2.2% from 3.5% 2010-2015. 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 20
Slide 10: 60 Basis Point Occupancy Improvement
60 Basis Point Occupancy Improvement Apartment Quarterly Occupancy Levels 95.6% 95.8% 95.5% 95.5% 95.3% 94.7% 94.9% 94.7% 94.3% 94.2% 93.6% Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 10
Slide 11: $460K Savings in Rental Incentive YTD
$460K Savings in Rental Incentive YTD 2015 Vs. 2014 Incentives as a Percentage of Rental Revenue Same Store Apartment Properties 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 11
Slide 12: NOI Growth YTD in All Markets
NOI Growth YTD in All Markets YTD Same Store NOI Growth by Core Market Ontario 1.2% Halifax 2.7% Moncton 4.0% St. John's 5.0% Fredericton 7.1% Charlottetown 7.9% Saint John 8.7% 12
Slide 13: Halifax Apartment Rental Starts Peaked in 2011
Halifax Apartment Rental Starts Peaked in 2011 Halifax Rental Apartment Starts and Completions Rental Starts Rental Completions 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 Source: CMHC 13
Slide 14: Total Starts in Halifax Below Average
Total Starts in Halifax Below Average Halifax New Construction by Type Single Family Row & Semi-Detached Apartment 3,500 Average total starts of 2,417 per year 3,000 from 1990-2014. 2,500 2,000 1,500 1,000 500 0 Source: CMHC 14
Slide 15: Lower Natural Gas Prices in 2015 Vs. 2014
Lower Natural Gas Prices in 2015 Vs. 2014 Commodity Charge per GJ NS Natural Gas NB Natural Gas $20 $18 $16 $14 $ per GJ $12 $10 $8 $6 $4 $2 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 15
Slide 16: Propane Offers Energy Saving Opportunities
Propane Offers Energy Saving Opportunities Per GJ Cost of Propane Natural Gas1 NS Gas NB Gas Propane NS Savings Potential NB Savings Potential $40 70% $35 60% Percent Savings with Propane $30 50% Fuel Price /GJ $25 40% $20 30% $15 20% $10 $5 10% $- 0% Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Ju
Slide 17: Water Savings Initiatives Underway
Water Savings Initiatives Underway Killam’s Low-flow Toilet Installs 1000 $350,000 900 $300,000 800 Cumulative Savings 700 $250,000 Toilet Installs 600 $200,000 500 $150,000 400 300 $100,000 200 $50,000 100 0 $- Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Number of Toilet Installs Total Cumulative Sav
Slide 18: Mortgage Maturities / Interest Expense Savings
Interest Expense Savings Apartment Mortgage Maturities by Year Mortgage Maturities by Year Refinanced in 2015 Weighted Average Interest Rate $180 8% $160 7% Mortgage Maturities ($M) $140 6% Interest Rate $120 4.56% 4.20% 5% $100 3.64% 3.79% 3.43% 3.16% 3.30% 3.33% 4% $80 2.82% 2.55% 3% $60 $40 2% $2
Slide 19: Future Development Opportunities
Developments Future Development Opportunities Development Potential in Property City Units Status Developments Underway The Alexander - Phase 1* Halifax, NS 240 Under construction 2017 completion Southport - Barrington Street Halifax, NS 70 Under construction Q3-16 completion Development Opportuniti
Slide 20: Southport, Halifax, NS
Developments Southport, Halifax, NS • $14.7 million development cost for 70 apartment units • Completion scheduled for Q3-2016 • Common amenities include a common room, fitness room, patio. 20
Slide 21: Southport, Halifax, NS
Developments Southport, Halifax, NS 21
Slide 22: Southport, Halifax, NS
Developments Southport, Halifax, NS 22
Slide 23: The Alexander (Phase I), Halifax, NS
Developments The Alexander (Phase I), Halifax, NS • 240 apartment units • 24 storeys • Units size from 550-1,470 square feet • 6,200 square feet of retail space • 230 underground parking stalls • Common amenities include fitness room, common rooms and landscaped roof-top deck on the five storey buil
Slide 24: The Alexander (Phase I), Halifax, NS
Developments The Alexander (Phase I), Halifax, NS View from upper floors 24
Slide 25: Saginaw (Phase II), Cambridge, ON
Developments Saginaw (Phase II), Cambridge, ON 25
Slide 26: Q3-2015 Results Conference Call
Q3-2015 Results Conference Call Nov 4, 2015 11 am EST
Killam Apartment REIT — Q3 2015 Earnings Presentation on 6ix