Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q3 2020 Earnings Presentation
36 slides from Killam Apartment Reit's earnings presentation, Nov 5, 2020
Slide 1: Q3-2020 Results Conference Call
Q3-2020 RESULTS CONFERENCE CALL November 5, 2020 | 9AM EASTERN KILLAM APARTMENT REIT
Slide 2: Cautionary Statement
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”, “expect”, “estima
Slide 3: Focusing on Long-term Growth Drivers
Q3-2020 | Focusing on Long-term Growth Drivers Killam’s strategy to increase FFO, NAV and maximize value is focused on three priorities: Increase earnings from existing portfolio. Expand the portfolio and diversify geographically through accretive Develop high-quality properties in acquisitions, tar
Slide 4: Highlights
Q3-2020 | Highlights FFO per Unit Growth AFFO per Unit $0.27 per unit, comparable to Q3- $0.23 per unit, consistent with Q3- 2019 and a $0.75 per unit year-to- 2019 and $0.63 per unit year-to- date, a 2.7% increase from YTD date, a 6.8% increase from YTD 2019. 2019. $0.27 $0.23 $37.5M 43.8% 0.4% Net
Slide 5: Financial Highlights
Q3-2020 | Financial Highlights Apt Same Property Apt Same Property Avg Rental Rate Incentive Offerings2 Increase Apt Same Property Occupancy1 0.7% 0.7% 0.4% 0.3% 0.4% 1.4% 1.8% 2.5% 3.4% 3.1% Q3-16 Q3-17 Q3-18 Q3-19 Q3-20 Q3-16 Q3-17 Q3-18 Q3-19 Q3-20 95.8% 97.0% 97.1% 97.3% 96.6% 1 Measured as doll
Slide 6: Financial Highlights: Same Property Expense
Q3-2020 | Financial Highlights Q3 Same Property Expense YTD-2020 Same Property Expense by Category ($M) by Category ($M) Q3-2020 Q3-2019 % Increase/(Decrease) YTD-2020 YTD-2019 % Increase/(Decrease) $11 20.0% $27 20.0% 15.0% 15.0% 5.1% $23 4.6% $9 10.0% 10.0% 1.1% 0.5% 1.8% 5.0% $19 5.0% $7 0.0% (6.
Slide 7: Apartment Mortgage Maturities by Year
Q3-2020 | Financial Highlights Apartment Mortgage Maturities by Year As at September 30, 2020 Mortgage Maturities Weighted Average Interest Rate (Apartments) Current Five-year CMHC rate Ten-year CMHC rate Weighted Average $450 Interest Rate of $400 4% 2.77% 3.19% Mortgage Maturities ($M) $350 2.96%
Slide 8: Financial Highlights: Debt and Investment Properties
Q3-2020 | Financial Highlights Increasing value of investment properties with conservative debt metrics. Debt as a % of Assets Investment Properties ($B) 50% Investment Properties under Construction 48% Investment Properties 46% 44% 47.2% 43.4% 44.4% 45.3% 43.8% 42% $3.1 $3.2 $3.3 $3.4 $3.6 40% Debt
Slide 9: Rent Collection
Q3-2020 | Rent Collection Rent Collection (as at Oct 30th) Apartments MHCs Commerical Overall Q2-2020 Q3-2020 Oct 2020 Killam’s Commercial Tenants Participating in the federal CECRA program with: • 40 tenants • $0.1M revenue reduction recorded in Q3 ($0.2M Year-to-date) Working with tenants who do n
Slide 10: Delivering Value to our Residents
Q3-2020 | Delivering Value to our Residents Killam delivers affordable, safe, clean and high-quality housing to our residents across Canada. Region Killam’s Rent Affordable Rents in Killam’s Portfolio per CMHC Metric as a % of Median Household $100,000 $5,000 Income Median Household Income $ Halifax
Slide 11: Revenue – Long-term Strength
Q3-2020 | Revenue – Long-term Strength With continued high occupancy levels, increasing rental rates is a key focus for revenue optimization. 0% Same Property Rental Increases (%) 5.8% 5.9% 5.7% 6.1% 3.6% 0% 5.6% 3.4% 3.4% 5.3% 5.2% 5.0% 5.1% 3.2% 4.9% 0% 4.6% 2.9% 2.9% 2.7% 0% 2.5% 3.3% 3.4% 3.4% 2
Slide 12: Revenue – Renewal Growth
Q3-2020 | Revenue – Renewal Growth Approximately 70% of Killam’s residents renew each year with average increases of 1.8% - 2.5% pre COVID-19. Due to voluntary rent freeze and delayed notice given to tenants renewing July – November, renewal rates are temporarily lower in Q3-2020 but expected to rec
Slide 13: Revenue - Renovations
Q3-2020 | Revenue - Renovations Revenue growth through unit repositions to meet market demand. YTD-2020 Actuals 2020 Program Total Opportunity • 426 unit repositions • 500 unit repositions • 5,000 unit repositions • 12% ROI • ~$12-14M investment • ~$125-140M investment • $26k avg investment • ~$1.6-
Slide 14: Killam's Green Commitment
Q3-2020 | Killam’s Green Commitment Increasing earnings from operations through energy efficiency. Includes photovoltaic solar panels, water conservation projects and heating efficiencies. $5.8 Million planned for 2020; 87 projects $0.65 Million potential annualized savings 8 year average payback Qu
Slide 15: Acquisitions
Q3-2020 | Acquisitions Purchase Acquisition Ownership Property Price(1) Property Location Date Interest (%) Type ($000’s) 1 Q1 Christie Point Victoria, BC Jan 15, 2020 100% Apartment $54,000 2 Q1 9 Carrington Halifax, NS Jan 31, 2020 100% Apartment 8,800 3 Q1 Domaine Parlee Shediac, NB Mar 23, 2020
Slide 16: Q4-2020 Acquisitions | Moncton, NB
Q4-2020 Acquisitions | Moncton, NB Description: Acquisition Details: Location: 171 & 181 Leopold Belliveau Drive $17.6 million Moncton, NB 107 units; 2 apartment buildings with 1 and 5.0% capitalization rate 2 bedroom units 100% occupied Average rent – $1,214/month ($1.20/sf) Closed: October 26, 202
Slide 17: Q4-2020 Acquisitions | Moncton, NB
Q4-2020 Acquisitions | Moncton, NB Description: Acquisition Details: Location: 162 units; 1,426 square feet (sf) average $55 million Dieppe, NB • 39 one bedrooms; 986 sf 4.5% capitalization rate • 116 two bedrooms; 1,499 sf • 7 three bedrooms; 2,663 sf 88% leased Average rent – $1,885/month ($1.32/s
Slide 18: Q4-2020 Acquisitions | Moncton, NB
Q4-2020 Acquisitions | Moncton, NB Horizon Place, 162 units Vibe Lofts, Edmonton 18
Slide 19: Q4-2020 Acquisitions | Moncton, NB
Q4-2020 Acquisitions | Moncton, NB Horizon Place, 162 units Cineplex NB Liquor Canadian Tire Champlain Mall Walmart Horizon Place Vibe Lofts, Edmonton 19
Slide 20: Annual Acquisitions
Q3-2020 | Acquisitions Annual Acquisitions ($ millions) Average $122M $115 $106 $121 $160 $200 $315 $210 $167 $200 $103 $125 $191 $85 $54 $72 $16 $45 $36 $3 *Includes a $55 million purchase to be completed NOI Generated Outside Atlantic Canada in mid-November 2020. Killam continues to expand the por
Slide 21: 2020 Development Projects Underway
Q3-2020 | 2020 Development Projects Underway 233 units – Calgary, AB(2) Killam currently has six developments underway, plus 84 units(1) – Ottawa, ON a 10% interest in a Calgary project, for a total of 624 apartment units at a total cost of ~$250 million and an expected yield of ~5%. 128 units – Mis
Slide 22: Develop High Quality Properties
Q3-2020 | Develop High Quality Properties Developments - Scheduled Completion 2020-2022 $200 $millions Developing high-quality properties $17 in core markets. $160 • Over $600 million (~2,000 units) of developments completed or $70 underway. $120 • Experienced in-house architect and engineers. • Ext
Slide 23: Development Activity, Charlottetown
Q3-2020 | Development Activity, Charlottetown Shorefront opened October 1, 2020. Key Statistics Number of units 78 Start date Q4-2018 Completion date Oct-2020 Project budget ($M) $22.0 Cost per unit $282,000 Expected yield 5.25% Expected value 4.75-5.0% Green Features: Sub-metered water, solar photo
Slide 24: Development Activity, Charlottetown
Q3-2020 | Development Activity, Charlottetown Shorefront opened October 1, 2020 and this 78-unit property is currently 33% leased. *Killam’s 50% interest. Shorefront Development 24
Slide 25: Development Activity, Charlottetown
Q3-2020 | Development Activity, Charlottetown 10 Harley Street – 38-unit redevelopment in Charlottetown. Key Statistics Number of units 38 Latitude (Phase II) Start date Q3-2019 Estimated completion date Feb-2021 Project budget ($M) $10.4 Cost per unit $274,000 Expected yield 5.0-5.25% Expected valu
Slide 26: Development Activity, Calgary
Q3-2020 | Development Activity, Calgary Killam has a 10% interest in a 233-unit development project, Nolan Hill, in Calgary. Killam has a commitment to acquire the remaining 90% interest upon completion in Q1-2021. Nolan Hill Key Statistics Number of units 233 Start date Q4-2019 Estimated Q1-2021 co
Slide 27: Development Activity, Ottawa
Q3-2020 | Development Activity, Ottawa Latitude (Phase II of Gloucester City Centre) Key Statistics Number of units 209 Start date Q2-2019 Estimated completion date Q4-2021 Project budget ($M)* $42.0 Cost per unit $402,000 Expected yield 4.75-5.0% Expected value cap-rate 4.0% Green Features: Sub-met
Slide 28: Development Activity, Ottawa
Q3-2020 | Development Activity, Ottawa Latitude, the second phase of the Gloucester City Centre development, is expected to be completed in late-2021. Latitude (Phase II) 209 units Frontier (Phase I) 228 units Completed in 2019 28
Slide 29: Development Activity, Mississauga
Q3-2020 | Development Activity, Mississauga The Kay development broke ground in Q3-2019 and is expected to be completed in Q1-2022. Key Statistics Number of units 128 Start date Q3-2019 Estimated completion date Q1-2022 Project budget ($M) $57.0 Cost per unit $445,500 Expected yield 4.75-5.0% Expect
Slide 30: Development Activity, Mississauga
Q3-2020 | Development Activity, Mississauga The Kay, a 128-unit development, is expected to be completed in early 2022. 30
Slide 31: Development Activity, Ottawa
Q3-2020 | Development Activity, Ottawa Luma – 168-unit development in Ottawa 50/50 with RioCan REIT. Key Statistics Number of units 168 Latitude (Phase II) Start date Q3-2019 Estimated completion date Q1-2022 Project budget ($M)* $44.3 Cost per unit $527,000 Expected yield 4.0-4.25% Avg rent per squ
Slide 32: Development Activity, Kitchener
Q3-2020 | Development Activity, Kitchener Civic 66 – 169-unit development in Kitchener that broke ground in July 2020. Key Statistics Number of units 169 Start date Latitude (Phase II) Q3-2020 Estimated completion date Q3-2022 Project budget ($M) $69.7 Cost per unit $412,000 Expected yield 4.75-5.0%
Slide 33: Development Activity, Kitchener
Q3-2020 | Development Activity, Kitchener Civic 66 – is expected to be completed in late 2022. Latitude (Phase II) 33
Slide 34: Development Pipeline - ~$850 million
Q3-2020 | Development Pipeline - ~$850 million Future Development Opportunities Killam’s Potential # Est Year of Property Location Interest of Units(1) Status Completion Developments expected to start in the next 12 months (2) The Governor Halifax, NS 100% 12 Building permit 2023 Westmount Place (Ph
Slide 35: 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 36: Q3-2020 Results Conference Call
Q3-2020 RESULTS CONFERENCE CALL November 5, 2020 | 9AM EASTERN KILLAM APARTMENT REIT
Killam Apartment REIT — Q3 2020 Earnings Presentation on 6ix