Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Q3 2021 Earnings Presentation
34 slides from Killam Apartment Reit's earnings presentation, Nov 4, 2021
Slide 1: Q3-2021 Results Conference Call
Q3-2021 RESULTS November 4th, 2021 | 9AM Eastern CONFERENCE CALL
Slide 2: Cautionary Statement
Q3-2021 | Cautionary Statement Southport, Halifax 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 “ma
Slide 3: Strategic Targets
Q3-2021 | Strategic Targets Develop High-Quality Properties Grow Same Property NOI • 2021 Target: Complete 166 units (two buildings) • 2021 Target: >2%, subject to COVID-19 related and break ground on two additional restrictions being lifted by Q3-2021. developments (>150 units). • **Revised in Q3-2
Slide 4: Financial Highlights
Q3-2021 | Financial Highlights The Alexander patio, Halifax $46.6M 66% Net income AFFO payout ratio $46.6 million, an increase of 66% AFFO payout ratio in Q3- $9.1 million from Q3-2020 $0.30 7.4% 2021, a 900-basis point from fair value gains realized FFO per Unit Growth 44.1% Same Property NOI decre
Slide 5: Financial Highlights
Q3-2021 | Financial Highlights Strong FFO and Same Property NOI Growth due to rental rate growth, improved occupancy and modest expense growth. Q3 FFO & AFFO Per Unit Same Property Portfolio Performance For the three months ended Sept 30, 2021 Q3-2021 Q3-2020 $0.30 $0.27 $0.26 $0.23 4.8% 0.2% 7.4% F
Slide 6: Financial Highlights
Q3-2021 | Financial Highlights Apt Same Property Avg Rental Apt Same Property Apt Same Property Rate Increase Occupancy(1) Incentive Offerings(2) 1.8% 2.5% 3.4% 3.1% 3.4% 97.0% 97.1% 97.3% 96.5% 97.4% 0.7% 0.4% 0.3% 0.4% 0.7% Q3-2017 Q3-2018 Q3-2019 Q3-2020 Q3-2021 Q3-2017 Q3-2018 Q3-2019 Q3-2020 Q3
Slide 7: Financial Highlights
Q3-2021 | Financial Highlights Total operating expenses were comparable quarter over quarter. Actively appealing tax assessments, and the continuous investment into energy efficiency initiatives helped to mitigate rising cost pressures. Same Property Expense Growth Same Property Operating Margin 2.1
Slide 8: Mortgage Maturities ($M)
Q3-2021 | Financial Highlights Apartment Mortgage Maturities by Year As at September 30, 2021 Mortgage Maturities Weighted Average Interest Rate (Apartments) Five-year CMHC rate Ten-year CMHC rate $600 3.19% $525 2.75% 2.85% Mortgage Maturities ($M) 2.68% 2.55% 3% $450 Current Weighted 2.61% Average
Slide 9: Financial Highlights
Q3-2021 | 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 11.18 53.5% 48.7% 49.8% 43.4% 44.6% 44.1% 2.70 3.13 3.22 3.20 3.36 3.52 % 9
Slide 10: Long-Term Growth Strategy
Q3-2021 | Long-Term Growth Strategy 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 | 6% Victoria Charlottetown ON | 23% NS | 37% Ottawa | London NB | 20% Halifax Toronto | KWC Moncton | Fre
Slide 11: Revenue – By Segment
Q3-2021 | Revenue – By Segment All property segments are contributing to the strong revenue growth year-to-date 2021; specifically the demand for apartments across the country, the rebound of the seasonal parks and strong commercial leasing. Q3 & YTD 2021 Revenue Growth by Segment Q3-2021 YTD-2021 4
Slide 12: Revenue - Renovations
Q3-2021 | Revenue - Renovations Revenue growth through unit repositions to meet market demand and optimize NOI growth and investment returns. YTD-2021 Actuals 2021 Program Total Opportunity • 446 unit repositions • 550 unit repositions • 5,500 unit repositions • 13% ROI • ~$14-16M investment • ~$140
Slide 13: Affordable and Value Delivery
Q3-2021 | Affordable and Value Delivery Killam delivers affordable, safe, clean and high-quality housing to our residents across Canada. • 35% of Killam’s portfolio rents for less than $1,000 per month. Region Killam’s Avg • Average rent is $1.44 per SF across the portfolio. Rent as a % of Median Ho
Slide 14: Acquisitions
Q3-2021 | Acquisitions YTD Total* - $390 Annual Acquisitions ($ millions) Post Q3 Average $122M $118 $315 $272 $200 $200 $211 $191 $167 $160 $125 $115 $106 $121 $103 $16 $85 $72 $45 $36 $3 $54 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 2021 NOI
Slide 15: Acquisition in Charlottetown, PE
Q3-2021 | Acquisition in Charlottetown, PE 140 Dale Drive | Charlottetown 61-units | 98% leased Affordable Housing with CMHC National Housing Strategy program Acquisition Details: $15.3 million ($251,000/unit) Unit Mix # of Average Average Rent % 4.2% capitalization rate Units Rent Size per SF Lease
Slide 16: Acquisition in Charlottetown, PE
Q3-2021 | Acquisition in Charlottetown, PE 140 Dale Drive | 61 Units 16
Slide 17: Acquisition in Moncton, NB
Q3-2021 | Acquisition in Moncton, NB Emma Place | 1321 Mountain Rd 118 units | Avg 1,035 SF | 91% leased Avg Mth Rent $1,402 per unit ($1.35/SF) Acquisition Details: $31.8 million ($269,500/unit) 3.9% capitalization rate Construction completed: 2020 Acquisition date: October 18, 2021 17
Slide 18: Acquisition in Moncton, NB
Q3-2021 | Acquisition in Moncton, NB Emma Place | 118 Units 18
Slide 19: Acquisition in Edmonton
Q3-2021 | Acquisition in Edmonton Heritage Valley Central | 11823 22nd Ave. 123 units | Avg 842 SF | 90% leased Avg Mth Rent $1,507 per unit ($1.79/SF) Acquisition Details: $28.9 million ($235,000/unit) 4.7% capitalization rate Construction completed: 2019 Acquisition Date: October 28, 2021 19
Slide 20: Acquisition in Edmonton
Q3-2021 | Acquisition in Edmonton Nautical Luxury Suites at Summerside 4203-4211 Savaryn Drive SW 180 units | Avg 875 SF | 98% leased Avg Mth Rent $1,525 per unit ($1.74/SF) Acquisition Details: $42.3 million ($235,000/unit) 4.9% capitalization rate $32.7 million mortgage with 2.3% interest rate, ma
Slide 21: Strong Leasing of Developments
Q3-2021 | Strong Leasing of Developments All three newly completed developments were fully leased by mid-2021. They contributed $0.9 million to FFO in YTD-2021 and are expected to contribute over $3.0 million of FFO on an annualized basis. Operating Margin % (Stabilized) Annual NOI Contribution in $
Slide 22: Development Progress
Q3-2021 | Development Progress With Shorefront, Harley and Nolan Hill now open, Killam currently has five developments underway, which will add an additional 497 units to Killam’s portfolio by the end of 2022. This current pipeline has a construction cost of ~$239 million and is expected to start co
Slide 23: Development Activity - Ottawa
Q3-2021 | Development Activity - Ottawa THE LATITUDE, 209-unit development is the second phase of the Gloucester City Centre development in Ottawa (50% interest). Progress shots as of October 2021 Key Statistics Number of units 209 Start date Q2-2019 Estimated completion date Jan 2022 Project budget
Slide 24: Development Activity - Mississauga
Q3-2021 | Development Activity - Mississauga THE KAY, 128-unit development in Mississauga that broke ground in Q3-2019 and is expected to be completed by March 2022. Key Statistics The Kay, progress shot as of November 2021 Number of units 128 Start date Q3-2019 Est. completion date March 2022 Proje
Slide 25: Development Activity - Ottawa
Q3-2021 | Development Activity - Ottawa LUMA – 168-unit development in Ottawa that is expected to be completed in early 2022. (50% interest) Progress shot as of October 2021 Key Statistics Number of units 168 Estimated completion date Q2-2022 Project budget ($M)(1) $45.8 Cost per unit $545,000 Expec
Slide 26: Development Activity - Halifax
Q3-2021 | Development Activity - Halifax THE GOVERNOR - 12 luxury units and 3,500 square foot ground floor commercial development in downtown Halifax. Key Statistics Number of units 12 Start date Latitude (Phase II) Q1-2021 Est. completion date Q3-2022 Project budget ($M) $22.8 Expected yield 4.25%-
Slide 27: The Governor
THE GOVERNOR
Slide 28: The Governor
THE GOVERNOR
Slide 29: Development Activity - Kitchener
Q3-2021 | 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 Number of units 169 GREEN FEATURES: Sub- metered water, geothermal Latitude (Phase II) Q3-2020 Start date heating and coolin
Slide 30: Future Development Activity – Westmount Phase 1
Q3-2021 | Future Development Activity – Westmount Phase 1 WESTMOUNT PHASE 1 – Expect to break ground on the 139-unit development in Waterloo in Q1-2022. Key Statistics Number of units 139 Est. start date Q1-2022 Est. completion date 2025 30
Slide 31: Future Development Activity - Halifax
Q3-2021 | Future Development Activity - Halifax EVENTIDE & AURORA – Expect to break ground on the two building, 120-unit development in Halifax in early 2022. Eventide & Aurora, exterior renderings Key Statistics Number of units 120 Est. start date 2022 Est. completion date 2025 31
Slide 32: Development Pipeline - ~$1.3 billion
Q3-2021 | Development Pipeline - ~$1.3 billion Future Development Opportunities Killam’s Potential # Est Year of Property Location Interest of Units(1) Status Completion Developments expected to start in 2022 Nolan Hill (Phase 2)(2) Calgary, AB 10% 234 Detailed design, preparing submission 2023 As-o
Slide 33: Non-IFRS Measures
Non-IFRS Measures Management believes these non-IFRS financial measures, ratios and supplementary information 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 o
Slide 34: Q3-2021 Results Conference Call
Q3-2021 RESULTS CONFERENCE CALL November 4th, 2021 | 9AM Eastern
Killam Apartment REIT — Q3 2021 Earnings Presentation on 6ix