Slide 1: Killam Apartment REIT Q2-2016 Results Conference Call
KILLAM APARTMENT REIT Q2Ͳ2016 Results Conference Call Aug4,2016 11amEST
Slide 2: Cautionary Statement
CautionaryStatement ThispresentationmaycontainforwardͲlookingstatementswithrespecttoKillam ApartmentREITanditsoperations,strategy,financialperformanceandcondition. ThesestatementsgenerallycanbeidentifiedbyuseofforwardͲlookingwordssuchas “may”,”will”,“expect”,“estimate”,“anticipate”,“intends”,“believ
Slide 3: Highlights from Q2-2016
HighlightsfromQ2Ͳ2016 Highlights from Q4-2015 • Generated FFO per unit of $0.23, a 9.5% increase from $0.21 in Q2-2015. • Improved AFFO payout ratio to 81%. • Increased same property rental revenue by 1.8%. • Achieved same property NOI growth of 3.8%. • Reduced debt levels, down to 54.5% at June 30,
Slide 4: 9.5% FFO Per Unit Growth in Q2
9.7% FFO Per Share Growth 2015 9.5%FFOPerUnitGrowthinQ2 Q2 FFO & AFFO Q1&Q2 FFO & AFFO Per Unit Per Unit FFO AFFO FFO AFFO $0.23 $0.41 $0.21 $0.21 $0.35 $0.36 $0.18 $0.18 $0.31 $0.30 $0.16 $0.26 Q2-2014 Q2-2015 Q2-2016 2014 2015 2016 4
Slide 5: Improving Payout Ratio
88% AFFO Payout Ratio in 2015 ImprovingPayoutRatio AFFO Payout Ratio Dividend/Distribution AFFO Payout Ratio $0.61 $0.60 99% 96% 96% 98% 100% 81% 95% $0.60 $0.59 88% 90% AFFO $0.59 $0.58 81% 85% Payout $0.58 $0.57 $0.57 80% Ratio 75% $0.56 $0.57 $0.58 $0.58 $0.60 $0.60 $0.60 $0.56 70% *Rolling12mont
Slide 6: Improving Debt Levels
ImprovingDebtLevels DebtasaPercentageof InterestCoverageRatio Assets 2.75 55.7% 54.9% 2.48 54.5% 2.34 53.1% 2.21 *TheamountsasatJuly4,2016areestimatestoshowtheimpactof redeeming$57.5millionofconvertsonJuly4,2016. 6
Slide 7: $100M of Acquisition Capacity
$100MofAcquisitionCapacity Liquidityof$46.6M= $100MofAcquisition CreditFacility:Followingtheacquisitionof Capacity GardenParkApartmentswithoutmortgage debtonJune30,2016,anew$30Mdemand creditfacilitywasfinalizedonJuly202016. ThisreplacedKillam’sprevious$2M acquisitionfacility. $30.0 CashatJune30,2016
Slide 8: 3.8% Same Property NOI Growth in Q2
3.8%SamePropertyNOIGrowthinQ2 Same Property Results 3 and 6 months ended June 30, 2016 Revenue Expenses NOI 5.7% 3.8% 1.8% 1.6% (1.3%) (3.6%) Q2 Q1 & Q2 8
Slide 9: Apartment Occupancy of 95.6% in Q2
ApartmentOccupancyof95.6%inQ2 Q2 Apartment Occupancy* Q2 2015 Q2 2016 98.4% 97.7% 98.2% 95.7% 95.1% 94.6% 94.8% 95.6% 92.0% 97.6% 97.6% 96.0% 95.0% 94.9% 94.8% 94.5% 93.3% 93.6% 94.0% 84.9% * Occupancy represents actual residential rental revenue net of vacancy as a percentage of gross potential res
Slide 10: Mortgage Maturities and Interest Expense Savings on Refinancings
InterestExpenseSavingsonRefinancings Mortgage Maturities by Year MortgageMaturitiesbyYear WeightedAverageInterestRate(Apartments) $200 8% $180 7% Mortgage Maturities ($M) $160 6% $140 Interest Rate $120 5% 3.86% 3.64% $100 3.42% 3.16% 3.16% 3.28% 4% 3.13% $80 2.82% 2.56% 3% $60 2% $40 $20 1% $0 0% C
Slide 11: Capital Upgrade Programs Underway
CapitalUpgradeProgramsUnderway Before Commonareaupgrades underwayatShaunslieve ApartmentsinHalifax. After 11
Slide 12: Capital Upgrade Programs Underway
CapitalUpgradeProgramsUnderway Before Commonareaandunit upgradesat125Knightsridge, acquiredinDecember2015. After 12
Slide 13: Capital Upgrade Programs Underway
CapitalUpgradeProgramsUnderway Penthouseupgrade attheJamesin Halifax. Before After 13
Slide 14: Garden Park Apartments, Halifax
GardenParkApartments,Halifax Building Description: 246 apartment units 8,195 sq. ft. commercial Location: 1472 Martello Street, Halifax 2016 Acquisition: 51.0% $23.7 million 14
Slide 15: Kanata Lakes Apartments III, Ottawa
KanataLakesApartmentsIII,Ottawa Building Description: 173 units 3rd of a five-building portfolio with a shared clubhouse Location: 1047 Canadian Shield Ave, Kanata Previous Purchases: 2011 – 25% of building I 2014 – 50% of building II & additional 25% of building I 15
Slide 16: Kanata Lakes Apartments, Ottawa
KanataLakesApartments,Ottawa 16
Slide 17: 270 Parkside Drive, Fredericton
270ParksideDrive,Fredericton 270ParksideDriveislocatedin closeproximityto355unitsin Fredericton,andacrossfrom Killam’sregionalofficeinthecity. existingKillamproperties 17
Slide 18: Southport Nearing Completion
Current Developments SouthportNearingCompletion Southport, Halifax, NS Rental Units: 70 Start Date: December 2014 Projected Completion: August 2016 Move-ins starting in Sept 2016 Location: Downtown Halifax Lease up: 35 of 70 units (50%) Construction Cost: $14.7 million, $210,000/door Expected Yield:
Slide 19: Southport, Halifax
Current Developments Southport,Halifax Southport, Halifax, NS 19
Slide 20: Southport, Halifax
Current Developments Southport,Halifax Southport, Halifax, NS 20
Slide 21: Southport, Halifax
Current Developments Southport,Halifax Southport, Halifax, NS 21
Slide 22: The Alexander - 2017 Completion
TheAlexander Ͳ 2017Completion Building Description: 242 units 24 storeys 230 underground parking stalls 6,500 square feet of retail space Ownership: Killam 50%, Partners 50% Start Date: Q3-2015 Projected Completion: 2017 Location: Downtown Halifax across from the waterfront Construction Cost: $35 mi
Slide 23: The Alexander, Halifax
The Alexander, Halifax a Killam APARTMENT REIT
Slide 24: Saginaw 2, Cambridge
Future Developments Saginaw2,Cambridge Saginaw 2, Cambridge, ON Building Description: 93 units, 7 storeys Start Date: Q3-2016 Projected Completion: Q1-2018 Location: Cambridge, ON 24
Slide 25: Killam Apartment REIT Q2-2016 Results Conference Call
KILLAM APARTMENT REIT Q2Ͳ2016 Results Conference Call Aug4,2016 11amEastern