Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q2 2023 Earnings Presentation
26 slides from Killam Apartment Reit's earnings presentation, Aug 10, 2023
Slide 1: Q2-2023 Results Conference Call
Q2-2023 Results Conference Call August 10, 2023 | 9am EDT 1
Slide 2: Cautionary Statement
Q2-2023 | Cautionary Statement Christie Point, Victoria 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
Slide 3: Focus on Long-Term Growth Drivers
Q2-2023 | Focus on Long-Term Growth Drivers NOI Contribution by Market (%) AB | 8.4% Calgary | Edmonton NL | 4.6% St. John’s BC | 3.7% PEI | 6.1% Victoria| Courtenay Charlottetown NS | 31.6% Halifax ON | 25.0% NB | 20.6% Ottawa | London Moncton | Fredericton Toronto | KWC Saint John Killam’s strateg
Slide 4: Strategic Targets
Q2-2023 | Strategic Targets Target: Average 3.0%-5.0% Same property NOI growth of 7.1% for the six months ended June 30, 2023. Killam expects same property NOI growth in 2023 to exceed the top end of its target and has increased its target to 6.0%. Target: Sell a minimum of $100 million of non-core
Slide 5: Financial Highlights
Q2-2023 | Financial Highlights Q2 FFO & AFFO Per Unit Same Property Portfolio For the three months ended June 30, 2023 Q2-2023 Q2-2023 7.9% 5.3% 0.7% $0.30 $0.28 $0.26 $0.24 Revenue Expense NOI FFO AFFO YTD FFO & AFFO Per Unit Same Property Portfolio For the six months ended June 30, 2023 2023 2022
Slide 6: Financial Highlights
Q2-2023 | Financial Highlights $114.5M $0.30 7.9% 69% 43.1% Net Income FFO per Unit(1) Same Property NOI AFFO payout ratio(3) Total Debt as a % of Total Growth(2) Assets (4) Includes $56.2 million of net 7.1% increase from $0.28 per AFFO payout ratio was 69%, a unit in Q2-2022. AFFO per unit 7.9% gr
Slide 7: Portfolio
Q2-2023 | Portfolio Total Apt Average Monthly Rent by Quarter $1,400 $1,300 $1,200 $1,318 $1,304 $1,100 $1,289 $1,279 $1,260 $1,242 $1,227 $1,212 $1,202 $1,193 $1,184 $1,162 $1,149 $1,138 $1,126 $1,114 $1,000 $1,103 $1,082 $1,076 $1,067 $1,037 $1,026 $900 $800 Killam’s Portfolio Distribution by Mont
Slide 8: Financial Highlights – Apartments
Q2-2023 | Financial Highlights – Apartments Apartments Same Property Rental Rate Growth by Quarter Upon Lease Renewal For tenants with lease renewals in For new tenants moved in during Q2, Upon Unit Turn Q2, rents increased by 2.5%. rents increased 14.7%. 16% Combined Average Increase % 14% 12% 10%
Slide 9: Capturing Market Rents: Annual Turnover by Region
Q2-2023 | Capturing Market Rents Annual Turnover by Region Killam’s turnover was 22% in 2022 2020 2021 2022 Avg 2021 Avg 2022 and expect turnover 50% for 2023 to be ~18%. 40% 30% 20% 10% 38% 36% 30% 27% 25% 23% 22% 22% 21% 20% 14% 10% 0% 9
Slide 10: Financial Highlights – Expenses
Q2-2023 | Financial Highlights – Expenses Total same property operating expenses were up 0.7% in Q2-2023. The increase was driven a 3.2% increase in general operating expenses, and a 0.5% increase in utility and fuel expenses. These increases were offset by a 2.3% decrease in property taxes. Same Pr
Slide 11: Financial Highlights – MHC & Commercial
Q2-2023 | Financial Highlights – MHC & Commercial MHC Same Property NOI Growth Revenue NOI 11.4% 8.5% 7.3% 6.5% NL 3.8% 3.0% 2.0% 1.8% 1.6% ON NB NS Q2-2019 Q2-2020 Q2-2021 Q2-2022 Q2-2023 Commercial Same Property NOI Growth Revenue NOI 22.8% 15.7% 12.1% 11.6% 9.8% 9.5% 7.6% 4.4% (2.2%) (3.1%) Royal
Slide 12: Conservative Debt Metrics
Q2-2023 | Conservative Debt Metrics Total Debt as a % of Assets(1) Interest Coverage Ratio(2) Debt to Normalized EBITDA(3) 47% 45% 43% 41% 39% 37% 43.4% 44.6% 45.0% 45.3% 43.1% 3.20 3.36 3.53 3.31 3.14 10.15 10.78 11.33 11.21 10.90 35% 2019 2020 2021 2022 Q2-2023 2019 2020 2021 2022 Q2-2023 2019 202
Slide 13: Debt Ladder
Q2-2023 | Debt Ladder Apartment Mortgage Maturities by Year As at June 30, 2023 Mortgage Maturities ($) 5 year estimated CMHC-insured rate 10 year estimated CMHC-insured rate Weighted average interest rate (apartments) 6% $350 5% $300 $250 4% $200 3.62% 3.48% 3% 3.25% $150 2.94% 2.86% 2.65% 2.70% 2%
Slide 14: ESG Targets
Q2-2023 | ESG Targets «Killam 2.24.3 APARTMENT REIT Environmental © Long-Term Targets (1) Scope 1 and 2 emissions from 2020 levels, based on a like-for-like portfolio, Reduce GHG emissions 15% by 2030.” Reduce carbon intensity 15% by 2030.2 Produce a minimum of 10% of electricity” consumed by its po
Slide 15: Preventative Maintenance
Q2-2023 | Preventative Maintenance Currently 19 properties are connected to our central Building Automation System (BAS) server capable of monitoring and diagnosing the property’s energy system performance remotely. Building Energy Increased Lifecycle Cost Optimization Reduction of Equipment Savings
Slide 16: Solar
Q2-2023 | Solar PV solar installed at 18 properties with total potential production of 1,817 MWh/year (equal to 343 apartment units) 2 x Nova Scotia 4 x Ontario 1 x Alberta 11 x Prince Edward Island Producing 4% of operationally controlled electricity (targeting 10% by 2025) In 2023, Killam
Slide 17: Electric Vehicle Chargers
Q2-2023 | Electric Vehicle Chargers Targeting ~400 electric vehicle (EV) chargers across 50 properties for 2023 260 EV chargers installed across 39 properties to date Targeting another 50 properties in 2023 and will continue to add, as needed Project budget of $2 million with 50% funding from
Slide 18: Disposition Activity
Q2-2023 | Disposition Activity Killam is focused on identifying dispositions that will maximize value for our Unitholders and strengthen our balance sheet. These strategic dispositions are accretive to both NAV and FFO per unit and enhances capital flexibility. 2023 Target: Recycle $100 million of n
Slide 19: Strong Leasing of Developments Continues
Q2-2023 | Strong Leasing of Developments Continues Fully leased Latitude, Ottawa The Kay, Mississauga Luma, Ottawa 33% 43% leased leased Governor, Halifax Civic 66, Kitchener 19
Slide 20: Completed Developments – The Governor, Halifax
Q2-2023 | Completed Developments – The Governor, Halifax The Governor - 12 luxury suites and 3,500 square foot ground floor commercial development in downtown Halifax Green features: • Heating & cooling with Variable Refrigerant Flow heat pumps • EV chargers for all parking stalls • Wi-fi Connected
Slide 21: Completed Developments – Civic 66, Kitchener
Q2-2023 | Completed Developments – Civic 66, Kitchener Green features: - Geothermal heating & cooling - Sub-metered water - Low-flow plumbing fixtures - PV solar panels - EV car chargers - Heat pumps for domestic hot water 21 21
Slide 22: Active Developments
Q2-2023 | Active Developments Killam currently has two active developments underway, which will add an additional 373 new high-quality suites to Killam’s portfolio in the next two years. Nolan Hill Phase 2 | 234 units The Carrick | 139 units Calgary Waterloo Cost $65M (1) $84M Expected Completion Da
Slide 23: Future Development Activity – Nolan Hill, Calgary
Q2-2023 | Future Development Activity – Nolan Hill, Calgary Killam has a 10% interest* in the 234-unit second phase of the Nolan Hill development Broke ground in Q4-2021 and is expected to be completed in late 2023 Progress shots as of June 2023 23 *Killam has a $65.0 million commitment to purchase
Slide 24: Future Development Activity – The Carrick, Waterloo
Q2-2023 | Future Development Activity – The Carrick, Waterloo WESTMOUNT PHASE 1 (The Carrick) – Broke ground on the 139- unit development in Waterloo in Q2-2022. Progress shots as of June 2023 Key Statistics Number of units 139 Start date Q2-2022 Est. completion date Q1-2025 Project budget ($M) $83.
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: Q2-2023 Results Conference Call
Q2-2023 Results Conference Call August 10, 2023 | 9am EDT 26
Killam Apartment REIT — Q2 2023 Earnings Presentation on 6ix