Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q2 2017 Earnings Presentation
38 slides from Killam Apartment Reit's earnings presentation, Aug 10, 2017
Slide 1: Killam Apartment REIT Q2-2017 Results Conference Call
Killam Apartment REIT Q2-2017 Results Conference Call August 10, 2017 11am Eastern 1
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: 2017 Strategic Targets: Solid Progress
Killam Apartment Solid Progress REIT 2017 Strategic Targets Towards 2.4% Same Property NOI growth in the Grow Same Property NOI by 1% to 3% first six months of 2017 $180 million of assets purchased or Acquire $75 million of assets agreed to acquire Focus 75% of acquisitions outside 79% of acquisitio
Slide 4: Financial Highlights – Q2-2017
Highlights from Q4-2015 Financial Highlights – Q2-2017 • Generated funds from operations (FFO) per unit of $0.23, consistent with Q2-2016. • Adjusted funds from operations (AFFO) of $0.19, slightly ahead of Q2-2016. • Reduced debt to 50.4% of assets and increased interest coverage to 2.97x • Increas
Slide 5: FFO Highlights Per Share – Growth
9.7% FFOHighlights Financial Per Share–Growth Q2-20172015 • FFO/unit is consistent with Q2-2016 due to equity issuances to reduce leverage Q2 FFO & AFFO Per Unit Debt as a Percentage of Assets FFO AFFO 56.5% $0.23 $0.23 53.5% 51.9% $0.18 $0.19 50.4% Q2-2016 Q2-2017 YTD FFO & AFFO Per Unit Interest C
Slide 6: Financial Highlights – Q2-2017
Killam Apartment Financial HighlightsREIT – Q2-2017 • Same property revenues are ahead of ✓ Rents up 1.6%, with highest the prior year periods due to stronger rental rate growth in occupancy and higher rents Ontario (2.7%), Fredericton (2.4%) and Halifax (2.2%). Historic Same Property Apartment Quar
Slide 7: Financial Highlights – Q2-2017: Same Property Results
Financial Highlights – Q2-2017 Same Property Results Three and six months ended June 30, 2017 3.0% 0.7% 2.4% 2.0% 0.3% 1.7% Q2 YTD Revenue Expenses NOI 7
Slide 8: Apartment Mortgage Maturities by Year
Financial Highlights – Financing Activity Apartment Mortgage Maturities by Year As at June 30, 2017 Mortgage Maturities Weighted Average Interest Rate (Apartments) 5 year rate 10 year rate $225 8% 7% Mortgage Maturities ($M) $175 6% Interest Rate $125 5% 3.54% 3.44% 4% 3.15% 3.28% 2.88% 2.65% 2.81%
Slide 9: Killam’s Apartment Strategy for Growth
Killam Killam’sApartment Strategy forREIT Growth Killam’s strategy to maximize value and profitability is focused on three priorities: #1 #2 #3 Increasing earnings from Expanding the portfolio and Developing high-quality existing portfolio diversifying geographically properties in its core markets t
Slide 10: Increasing Revenues to Grow NOI
Increasing Revenues to Grow NOI 2017 Same Property Performance Revenue Growth NOI Growth 5.7% 6.1% 5.1% 3.8% 3.5% 3.9% 3.5% 3.1% 2.3% 2.8% (0.4%) (0.8%) (0.3%) 2.7% 2.1% 2.5% (1.1%) (2.9%) Halifax Saint John St. John's Moncton Calgary MHCs Fredericton Ontario Charlottetown 10
Slide 11: Increasing Revenues to Grow NOI
Increasing Revenues to Grow NOI Revenue Growth + Expense Management = Increased NOI • Growing revenue on turns Change Twelve months ended June 30, 2017 2016 (bps) Upon lease renewal 1.0% 1.0% Upon unit turn 2.6% 1.9% 70 Average rental increase 1.6% 1.3% 30 11
Slide 12: Increasing Revenues to Grow NOI: Garden Park Upgrades
Increasing Revenues to Grow NOI After, rent $1,010 Before, rent $840 Unit upgrades at Garden Park Apartments in Halifax – ROI 15% 12
Slide 13: Increasing Revenues to Grow NOI: Spruce Grove Upgrades
Increasing Revenues to Grow NOI After, rent $1,495 Before, rent $1,150 Unit upgrades at Spruce Grove in Calgary – ROI 15% 13
Slide 14: Managing Expenses to Grow NOI
Killam Apartment Managing ExpensesREIT to Grow NOI Revenue a 30 cent reduction in $/F2 = $4.3M in expenses = 6 cents in FFO/Unit Growth Five Year Plan 2017 – 2021 + Energy and Water Project Budget and Energy Intensity $/SF Expense $3,750 $1.50 Management $3,000 $1.40 = Increased NOI Energy Intensity
Slide 15: Cameron Heights, Edmonton
Cameron Heights, Edmonton Description: 4.9 acre development site Planning for 190 units Location: Cameron Height Drive, Edmonton Site Acquisition Details: $4.1 million ($830,000/acre) Closed April 13, 2017 and June 23, 2017 15
Slide 16: Benjamin Weir House, Halifax
Benjamin Weir House, Halifax Description: Historic house on 4,527 sf lot Commercial space – 6,000 sf Current occupancy –100% leased Location: 1459 Hollis Street, Halifax Acquisition Details: $4.6 million Closed April 19, 2017 16
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Slide 18: Gloucester City Centre (Phase 1), Ottawa
Gloucester City Centre (Phase 1), Ottawa Rental Units: 222 units Ownership: Killam 50%, RioCan 50% Start Date: Q2-2017 Projected Completion: mid-2019 Location: Ottawa’s East End, adjacent Ottawa’s Light Rail Transit (LRT) Blair Station. Cost: $36 million (Killam’s cost) ($327,000/ residential door)
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Slide 20: Innovation Drive, Halifax
Innovation Drive, Halifax Description: 134 units over two buildings Average rent – $1,520/month Current occupancy – 93% leased Location: 246 Innovation Drive, Bedford 300 Innovation Drive, Bedford Acquisition Details: $31.6 million ($236,000/unit) Closed July 4, 2017 5.2% capitalization rate 20
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Slide 24: Waybury Park & Tisbury Crossing, Edmonton
Waybury Park & Tisbury Crossing, Edmonton Description: 296 units over four buildings Expected rent – $1,495 Current occupancy – Waybury Park – 92% Tisbury Crossing – 60% (under construction) Location: Waybury Park – 112 & 114 Tisbury Street Tisbury Crossing – 200 & 202 Salisbury Way Acquisition Deta
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Slide 28: The Alexander, Halifax
The Alexander, Halifax Rental Units: 240 units, 6,500 sf of retail space Ownership: Killam 50%, Partners 50% Start Date: Q3-2015 Projected Completion: Q1-2018 Location: Downtown Halifax across from the waterfront Cost: $36.0 million (Killam’s cost) ($288,000/ residential door) Expected Yield: 5.4% E
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Slide 31: Future Developments: Saginaw Park, Cambridge
Future Developments Saginaw S agi n aw 2 , Park, Cambridge Cam bridge , ON Rental Units: 93 units Start Date: Q3-2016 Projected Completion: Q2-2018 Location: Adjacent Saginaw Gardens, Saginaw Parkway, Cambridge Cost: $25.3 million ($272,000/door) Expected Yield: 5.4% Expected Value: 4.75% cap rate A
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Slide 34: Development Pipeline
Development Pipeline Development Potential in Property City Units Development Opportunities - 2017 Silver Spear* Mississauga, ON 64 Carlton Terrace Halifax, NS 104 Future Development Opportunities - 2018 and beyond The Governor (Phase 2 of the Alexander) Halifax, NS 48 Cameron Heights Edmonton, AB 1
Slide 35: Silver Spear, Mississauga
Silver Spear, Mississauga 35
Slide 36: Carlton Terrace, Halifax
Carlton Terrace, Halifax f / PEEL) UWL = _ = ag TD i . V7 : rae Killam .2h.3 APARTMENT REIT *
Slide 37: The Governor, Halifax
The Governor, Halifax 37
Slide 38: Killam Apartment REIT Q2-2017 Results Conference Call
KILLAM APARTMENT REIT Q2-2017 Results Conference Call August 10, 2017 11 am Eastern
Killam Apartment REIT — Q2 2017 Earnings Presentation on 6ix