Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q1 2021 Earnings Presentation
29 slides from Killam Apartment Reit's earnings presentation, May 6, 2021
Slide 1: Q1-2021 Results Conference Call
Q1-2021 RESULTS CONFERENCE CALL May 6th, 2021 | 9AM Eastern
Slide 2: Cautionary Statement
Q1-2021 | Cautionary Statement This presentation may contain forward-looking statements with respect to Killam Apartment REIT 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: Focusing on Long-Term Growth Drivers
Q1-2021 | Focusing on Long-Term Growth Drivers Best-in-class multi-family residential owner, operator and developer NOI Contribution by Market (%) AB | 7% NL | 4% Calgary | Edmonton St. John’s BC | 3% PEI | 5% Victoria Charlottetown ON | 21% NS | 39% Ottawa | London NB | 21% Halifax Toronto | KWC Mo
Slide 4: Strategic Targets
Q1-2021 | Strategic Targets Develop High-Quality Properties Grow Same Property NOI • 2021 Target: Complete 166 units (two • 2021 Target: >2%, subject to COVID-19 related buildings) and break ground on two additional restrictions being lifted by Q3-2021. developments (>150 units). • YTD 2021 Performa
Slide 5: Highlights
Q1-2021 | Highlights $0.23 $65M Accretive Acquisitions Added a new 233-unit apartment FFO per Unit Growth property in Calgary, an apartment $0.23 per unit, a 4.5% in Moncton and land for future increase from $0.22 per unit development in Atlantic Canada. in Q1-2020. $0.19 3.1% AFFO per Unit Growth 4
Slide 6: Financial Highlights: Strong FFO and Same Property NOI Growth
Q1-2021 | Financial Highlights Strong FFO and Same Property NOI Growth • Generated FFO per unit of $0.23, a 4.5% increase from Q1-2020. • Produced AFFO per unit of $0.19, a 5.6% increase from Q1-2020. • Strong rental rate growth of 3.3%, partially offset by a 100 bps decrease in occupancy. • Modest
Slide 7: Apartment Financial Highlights
Q1-2021 | Apartment Financial Highlights Apt Same Property Avg Apt Same Property Apt Same Property Rental Rate Increase Occupancy1 Incentive Offerings2 95.5% 96.8% 97.1% 97.6% 96.6% 1.5% 2.2% 2.9% 3.4% 3.3% 0.8% 0.5% 0.5% 0.4% 0.6% Q1-2017 Q1-2018 Q1-2019 Q1-2020 Q1-2021 Q1-2017 Q1-2018 Q1-2019 Q1-2
Slide 8: Financial Highlights: Same Property Expense
Q1-2021 | Financial Highlights Lower heating fuel and utility expenses partially offset property tax increases and operating costs to record a modest 0.5% increase in Q1-2021. Utility and fuel expenses decreased due to: • Reduced consumption from energy efficiency projects • Decreases in natural gas
Slide 9: Apartment Mortgage Maturities by Year
Q1-2021 | Financial Highlights Apartment Mortgage Maturities by Year As at March 31, 2021 Mortgage Maturities Weighted Average Interest Rate (Apartments) Current Weighted Five-year CMHC rate Ten-year CMHC rate Average Interest Rate $600 $525 3.19% 4% 2.66 % Mortgage Maturities ($M) $450 2.68% 2.85%
Slide 10: Debt as a % of Assets
Q1-2021 | Financial Highlights Increasing value of investment properties with conservative debt metrics. Debt as a % of Assets Interest Coverage Ratio Debt to Normalized % EBITDA 0% % 0% 10.51 10.50 10.62 10.15 10.78 11.06 53.5% 48.7% 49.8% 43.4% 44.6% 45.5% 2.70 3.13 3.22 3.20 3.36 3.35 % 10
Slide 11: Roadmap to Same Property NOI Growth
Q1-2021 | Growing our Existing Portfolio Roadmap to Same Property NOI Growth • Data driven decisions on unit renewals and turns to maximize mark-to-market Revenue Optimization opportunities • Repositioning opportunities to meet market demand • Focused economies of scale strategies Expense Management
Slide 12: Apartment Revenue Growth: Same Property Rental Increases
Q1-2021 | Apartment Revenue Growth Same Property Rental Increases(1) (%) 7.0% 6.0% Total % On Renewal % On Regular Turns % 5.0% 4.4% 4.0% 3.0% 3.4% 3.6% 3.4% 3.4% 3.2% 2.7% 2.9% 2.9% 2.9% 2.0% 2.2% 2.4% 2.5% 2.4% 1.6% 1.8% 1.8% 1.3% 1.0% 1.5% 0.0% (1) Rental increases relating to renewals in the spe
Slide 13: Increase on Renewal Rent
Increase on Renewal Rent (%) 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 1.8% 2.1% 2.1% 2.0% 2.2% 2.1% 2.1% 2.2% 2.2% 2.0% 2.1% 2.0% 1.9% Q1-2021 | Apartment Revenue Growth 2.2% Increase on Renewal % 2.4% 2.3% 2.5% 2.3% 1.6% Increases on Renewing Rents (%) 0.4% Renewal Count 0.1% 1.6% 2.1% 1.9% 1.3% 1.4% 1.2% - 5
Slide 14: Revenue - Renovations
Q1-2021 | Revenue - Renovations Revenue growth through unit repositions to meet market demand to optimize NOI growth and investment returns. Q1-2021 Actuals 149 unit repositions 12% ROI $25.5k avg investment 2021 Program 550 unit repositions ~$14-16M investment ~$1.8-2.0M annualized revenue growth T
Slide 15: Same Property Apartment Growth by Market
Q1-2021 | Growing our Existing Portfolio Strength in the Maritime provinces drove strong revenue and net operating income in Q1. Q1-2021 Same Property Apartment Growth by Market 8.0% 7.1% Revenue NOI 6.0% 4.7% 3.8% 4.0% 3.4% 3.1% 3.0% 2.4% 2.5% 2.0% 2.0% 1.3% 0.5% 0.0% Halifax Ontario New Brunswick
Slide 16: Killam's Commitment to ESG
Q1-2021 | Killam’s Commitment to ESG Installed PV SOLAR PANELS at Implemented a Completed a 11 properties, which will GREEN CLEANING policy INDEPENDENT REVIEW of 2020 for procurement and use GHG Emissions Inventory. generate 880 MWh of throughout its properties. renewable energy (1) annually. ENVIRO
Slide 17: Killam's ESG Medium Term Targets
Q1-2021 | Killam’s ESG Medium Term Targets Killam has committed to ambitious but realistic ESG targets to work towards in the medium-term. These goals aim to mitigate Killam’s carbon footprint, maintain good corporate citizenship and create long-term value for its stakeholders. Killam’s 2020 ESG rep
Slide 18: Acquisitions
Q1-2021 | Acquisitions Annual Acquisitions ($ millions) $315 Average $122M $200 $200 $211 $160 $191 $167 $125 $115 $106 $121 $103 $85 $72 $54 $65 $16 $45 $36 $3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 2021 NOI Generated Outside Atlantic Cana
Slide 19: Acquisitions in Calgary & Moncton
Q1-2021 | Acquisitions in Calgary & Moncton NOLAN HILL | 233 units 54 ASSOMPTION BLVD | 23 units Description: Description: Northwest Calgary; new development Downtown Moncton; built in 2004 233 units; 84 one bdrms, 107 two bdrs and 42 three bdrms 23 units; 15 one bdrm and 8 two bdrm units • 78 units
Slide 20: Strong Leasing of Developments
Q1-2021 | Strong Leasing of Developments Shorefront | 78 units | Charlottetown, PE Leased (as of May 5, 2021) Month 1 Shorefront Month 2 Nolan Hill Month 3 Month from Opening Date Harley Nolan Hill | 233 units | Calgary, AB Month 4 Forecasted for all Month 5 three developments to be fully stabilized
Slide 21: Development Progress
Q1-2021 | Development Progress With Shorefront, Harley Developments - Scheduled and Nolan Hill now open, Completion Killam currently has five developments underway, 2021-2022 which will add an $millions additional 497 units to $200 128 units | Mississauga, ON Killam’s portfolio by the Total $180M |
Slide 22: Development Activity - Ottawa (Latitude)
Q1-2021 | Development Activity - Ottawa LATITUDE 209-unit second phase of the Gloucester City Centre development, is expected to be completed in Q1-2022. Key Statistics Number of units 209 Start date Q2-2019 GREEN FEATURES: Sub- metered water, geothermal Estimated completion date Q1-2022 heating and
Slide 23: Development Activity - Mississauga
Q1-2021 | Development Activity - Mississauga THE KAY, 128-unit development broke ground in Q3-2019 and is expected to be completed in Q4-2021. GREEN FEATURES: Sub-metered water, geothermal heating and cooling Key Statistics Number of units 128 Start date Q3-2019 Est. completion date Q4-2021 Project
Slide 24: Development Activity - Ottawa (Luma)
Q1-2021 | Development Activity - Ottawa LUMA – 168-unit development in Ottawa 50/50 with RioCan REIT. Key Statistics Number of units 168 Estimated completion date Q2-2022 Project budget ($M)(1) $44.3 Cost per unit $527,000 Expected yield 4.0%-4.25% Avg rent $2.90 per SF Avg unit size 748 SF (1) Kill
Slide 25: Development Activity - Kitchener
Q1-2021 | Development Activity - Kitchener CIVIC 66 – 169-unit development in Kitchener that broke ground in Q3-2020 and is expected to be completed by Q4-2022. Key Statistics Latitude (Phase II) Number of units 169 Start date Q3-2020 Est. completion date Q4-2022 Project budget ($M) $69.7 Cost per u
Slide 26: Development Activity - Halifax
Q1-2021 | Development Activity - Halifax THE GOVERNOR - 12 luxury units and 3,500 square foot ground floor commercial development adjacent The Alexander in downtown Halifax, NS. Key Statistics Latitude (Phase II) Number of units 12 Start date Q1-2021 Est. completion date Q3-2022 Project budget ($M)
Slide 27: Development Pipeline - ~$1.0 billion
Q1-2021 | Development Pipeline - ~$1.0 billion Future Development Opportunities Killam’s Potential # Est Year of Property Location Interest of Units(1) Status Completion Developments expected to start in 2021 Westmount Place (Phase 1) Waterloo, ON 100% 140 In design and approval process 2024 Develop
Slide 28: Non-IFRS Measures
Non-IFRS Measures Non-IFRS Measures Management believes these non-IFRS financial measures are relevant measures of the ability of the REIT to earn revenue and to evaluate Killam's financial performance. The non-IFRS measures should not be construed as alternatives to net income or cash flow from ope
Slide 29: Q1-2021 Results Conference Call
Q1-2021 RESULTS CONFERENCE CALL May 6th, 2021 | 9AM Eastern
Killam Apartment REIT — Q1 2021 Earnings Presentation on 6ix