Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q1 2023 Earnings Presentation
26 slides from Killam Apartment Reit's earnings presentation, May 4, 2023
Slide 1: Q1-2023 Results Conference Call
Q1-2023 Results Conference Call May 4, 2023 | 9am EDT 1
Slide 2: Cautionary Statement
Q1-2023 | Cautionary Statement Civic 66, Kitchener - 170 units 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-l
Slide 3: Focus on Long-Term Growth Drivers
Q1-2023 | Focus on Long-Term Growth Drivers NOI Contribution by Market (%) AB | 8.4% Calgary | Edmonton NL | 4.8% St. John’s BC | 3.8% Victoria PEI | 6.1% Charlottetown NS | 31.3% Halifax ON | 24.9% NB | 20.7% Ottawa | London Moncton | Fredericton Toronto | KWC Saint John Killam’s strategy to increa
Slide 4: Strategic Targets
Q1-2023 | Strategic Targets Target: Average 3.0%-5.0% Killam achieved 6.3% same property NOI growth. Based on the results achieved to date in 2023, Killam expects same property NOI growth in 2023 to exceed 5.0%. Target: Sell a minimum of $100 million of non-core assets. Killam completed the disposit
Slide 5: Financial Highlights
Q1-2023 | Financial Highlights $83.4M $0.25 6.3% 84% 44.6% Net Income FFO per Unit(1) Same Property NOI AFFO payout ratio(3) Total Debt as a % of Total Growth(2) Assets (4) Includes $50.8 million of net A 4.2% increase from $0.24 per AFFO payout ratio was 84%, a unit in Q1-2022. AFFO per unit 6.3% g
Slide 6: Financial Highlights
Q1-2023 | Financial Highlights Same Property Portfolio For the three months ended March 31, 2023 6.3% 5.4% 4.1% Revenue Expense NOI Q1 FFO & AFFO Per Unit Q1-2023 Q1-2022 $0.25 $0.24 $0.21 $0.20 FFO AFFO Luma, Ottawa – 168 units 6
Slide 7: Financial Highlights – Apartments
Q1-2023 | Financial Highlights – Apartments Apartments Same Property Rental Rate Growth by Quarter Upon Lease Renewal For tenants with lease renewals in For new tenants moved in during Q1, Upon Unit Turn Q1, rents increased by 2.3%. rents increased 14.3% Combined Average Increase % 12% 10% 8% Q1-202
Slide 8: Financial Highlights – MHC & Commercial
Q1-2023 | Financial Highlights – MHC & Commercial MHC Same Property NOI Growth Revenue NOI 9% NL 7% 4.0% 3.3% 3.2% 3.0% 3.1% 3.0% 2.8% 5% 2.8% 1.7% 1.3% ON 3% 1% NB NS -1% Q1-2019 Q1-2020 Q1-2021 Q1-2022 Q1-2023 Commercial Same Property NOI Growth 30% 29% 28% 27% Revenue NOI 26% 25% 24% 17.8% 23% 22
Slide 9: Financial Highlights – Expenses
Q1-2023 | Financial Highlights – Expenses Total same property operating expenses were up 4.1% in Q1-2023. The increase was driven by higher natural gas, oil, and propane prices which increased utility and fuel expenses by 8.9%. Same Property Expense Growth 8.2% 8.0% 4.1% 3.0% 1.9% (0.1%) 0.5% -2.0%
Slide 10: Conservative Debt Metrics
Q1-2023 | Conservative Debt Metrics Total Debt as a % of Assets(1) Interest Coverage Ratio(2) Debt to Normalized EBITDA(3) 47% 45% 43% 41% 39% 37% 43.4% 44.6% 45.0% 45.3% 44.6% 3.20 3.36 3.53 3.31 3.20 10.15 10.78 11.33 11.21 11.08 35% 2019 2020 2021 2022 Q1-2023 2019 2020 2021 2022 Q1-2023 2019 202
Slide 11: Debt Ladder
Q1-2023 | Debt Ladder Apartment Mortgage Maturities by Year As at March 31, 2023 Mortgage Maturities ($) 5 year estimated CMHC-insured rate (4.05%) 10 year estimated CMHC-insured rate (3.95%) Weighted average interest rate (apartments) 5% $350 $300 4% $250 3.48% 3.55% 3% $200 2.97% 2.85% 2.70% 2.55%
Slide 12: Energy Efficiency Developments, The Kay
Q1-2023 | Energy Efficiency Developments, The Kay Geothermal heating & cooling 32% less energy 47% less emissions
Slide 13: Energy Efficiency Developments, Civic 66
Q1-2023 | Energy Efficiency Developments, Civic 66 Geothermal heating & cooling Air-to-Water heat pumps PV Solar Panels 52% less energy 67% less emissions 13
Slide 14: Energy Efficiency Developments, The Carrick
Q1-2023 | Energy Efficiency Developments, The Carrick PATH TO TOTAL ELECTRIFICATION Attempt № 1 Geothermal Heating and Cooling Attempt № 2 Variable Refrigerant Flow (VRF) with Piranha Wastewater-to-Water heat pumps for hot water Attempt № 3 – Success! VRF with Aermec Air-to-Air heat pumps for hot wa
Slide 15: Energy Efficiency Developments, The Governor
Q1-2023 | Energy Efficiency Developments, The Governor Variable Refrigerant Flow Unit Assigned Condensers Wi-fi Connected Programmable Thermostats Smart Device Charging during Power Outages All Parking is Level II EV Charging Ready
Slide 16: Disposition Activity
Q1-2023 | 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 no
Slide 17: Affordability Commitment
Q1-2023 | Affordability Commitment 240 units with a long-term affordability commitment through CMHC’s MLI Select program Lakefront Apartments Committed 40% of units Parker Street Apartments Committed 40% of units Lakefront Apartments, Halifax – 396 units 17
Slide 18: Strong Leasing of Developments Continue
Q1-2023 | Strong Leasing of Developments Continue 100% Latitude, Ottawa 100% The Kay, Mississauga 94% Luma, Ottawa leased (1) leased (1) leased (1) 208 suites | January 2022 128 suites | April 2022 168 suites | June 2022 (1) As of May 2, 2023 18
Slide 19: Development Progress
Q1-2023 | Development Progress Killam currently has three developments underway, which will add an additional 320 new high-quality suites to Killam’s portfolio in the next two years.(1) Governor | 12 units Civic 66 | 169 units The Carrick | 139 units Halifax Kitchener Waterloo (1) Cost $24M $70M $84
Slide 20: Development Activity – The Governor, Halifax
Q1-2023 | Development Activity – The Governor, Halifax The Governor - 12 luxury suites and 3,500 square foot ground floor commercial development in downtown Halifax Progress shots as of April 2023 20
Slide 21: Development Activity – The Governor, Halifax
Q1-2023 | Development Activity – The Governor, Halifax Luxury suites adjacent to existing properties; The Alexander & Brewery Market Key Statistics Number of units 12 Start date Latitude (Phase II) Q1-2021 Est. completion date Q2-2023 Project budget ($M) $24.3 Expected yield 4.00%-4.25% THE ALEXANDE
Slide 22: Development Activity – Civic 66, Kitchener
Q1-2023 | Development Activity – Civic 66, Kitchener Green features: - Sub-metered water - PV solar panels - Air-to-Water heat pumps - Geothermal heating & cooling Key Statistics Number of units 169 Start date Q3-2020 Est. completion date Q2-2023 Project budget ($M) $69.7 Cost per unit $412,000 Expe
Slide 23: Future Development Activity – The Carrick, Waterloo
Q1-2023 | Future Development Activity – The Carrick, Waterloo WESTMOUNT PHASE 1 (The Carrick) – Broke ground on the 139-unit development in Waterloo in Q2-2022. Key Statistics Number of units 139 Start date Q2-2022 Est. completion date Q1-2025 Project budget ($M) $83.5 Cost per unit $601,000 Expecte
Slide 24: Future Development Activity – Nolan Hill, Calgary
Q1-2023 | 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 early 2024 Progress shots as of April 2023 *Killam has a $65.0 million commitment to purchase t
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: Q1-2023 Results Conference Call
Q1-2023 Results Conference Call May 4, 2023 | 9am EDT 26
Killam Apartment REIT — Q1 2023 Earnings Presentation on 6ix