Kennedy-wilson Holdings Inc. · NYSE:KW
Kennedy-wilson — Q3 2020 Earnings Presentation
38 slides from Kennedy-wilson's earnings presentation, November 2020
Slide 1: 3Q-20 Investor Update
3Q-20 Investor Update (As of September 30, 2020)
Slide 2: Disclaimer/Forward-Looking Statements
Disclaimer/Forward-Looking Statements Statements made by us in this presentation and in other reports and ability to acquire additional real estate assets; continued high levels of, or statements released by us that are not historical facts constitute “forward- increases in, unemployment and a gener
Slide 3: Table of Contents
Table of Contents Page Strategic Review 3 Financial Review 15 Western U.S. Markets 18 European Markets 24 Appendix 31 2 3Q-20 INVESTOR UPDATE
Slide 4: Strategic Review
Overview Strategic Review 3 3Q-20 INVESTOR UPDATE
Slide 5: 3Q Highlights
3Q Highlights Fee-Bearing • $3.8bn as of 3Q; +9% growth in 3Q;+27% YTD 1 Capital Growth • $1.7bn of non-discretionary capital in pipeline • $335m closed in 3Q; $608m YTD 2 Debt Platform • KW debt platform to $750M with strong pipeline of growth • Completed development of Stockley Park and 38° North
Slide 6: Kennedy Wilson (NYSE:KW) at a glance
Kennedy Wilson (NYSE:KW) at a glance $17bn 30,000 IMRES AUM1,2 Multifamily Units 6.1% 22M Dividend Yield3 Commercial Sq Ft 1 As defined in definitions section in the appendix 5 3Q-20 INVESTOR UPDATE 2 Excludes $3bn related to property services Capital Dock, Dublin, Ireland 3 Based on annual dividend
Slide 7: About Kennedy Wilson
About Kennedy Wilson We are a leading global real estate investment company. We own, operate and invest in real estate directly and through our investment management platform. We focus on multifamily and office properties located in the Western U.S., UK, and Ireland. Office: 150 El Camino Multifamil
Slide 8: The Kennedy Wilson Advantage
The Kennedy Wilson Advantage 1 Globally diversified real estate portfolio in growing markets with complementary investment management platform 2 Long-term relationships with major financial institutions 3 Local expertise to accretively allocate capital 4 First-mover advantage from early entry in key
Slide 9: Real Estate Portfolio and Value Creation Opportunities
Real Estate Portfolio and Value Creation Opportunities 8 3Q-20 INVESTOR UPDATE
Slide 10: Two key investment segments
Two key investment segments Consolidated Portfolio Co-Investment Portfolio Targeting wholly-owned investments Includes real estate and loan with accretive asset management investments with strategic partners and opportunities commingled fund business (KW ownership 5-50%) $306m 98% $104m $3.8bn Estim
Slide 11: Excellent scale across multifamily and office
Excellent scale across multifamily and office 81% Multifamily & Office Sectors Geography Multifamily: 47% Western US: 55% Office: 34% UK: 21% $410m Retail: 13% $410m Ireland: 20% Estimated Hotel/Loans/ Estimated Italy & Spain: 4% Annual NOI1 Industrial: 6% Annual NOI1 319 29,990 21.9m 94.2% No. of a
Slide 12: Suburban assets comprise 71% of multifamily and office NOI
Suburban assets comprise 71% of multifamily and office NOI Multifamily and Office Suburban: 71% Urban: 29% Multifamily: Mission Hills $330m Camarillo, CA, U.S. Estimated Annual NOI1 Office: Hamilton Landing Novato, CA, U.S. 1 As defined in definitions section in the appendix 11 3Q-20 INVESTOR UPDATE
Slide 13: Office NOI: 98% from low and mid-rise properties
Office NOI: 98% from low and mid-rise properties Low/Mid/High-Rise Low-rise: 37% Mid-rise: 61% $140m High-rise: 2% Estimated Annual NOI1 Low-rise office: The Heights Weybridge, UK Tenant Concentration Single Tenant /Business Park: 75% $140m Multiple: 25% Estimated Annual NOI1 Mid-rise office: 90 Eas
Slide 14: Investment Management Platform
Investment Management Platform 13 3Q-20 INVESTOR UPDATE
Slide 15: Fee-Bearing Capital raised from broad institutional investor base
Fee-Bearing Capital raised from broad institutional investor base Investor Type Investor By Geography Investor Type Geography Insurance Company: 41% U.S.: 44% $3.8bn $3.8bn Pension Fund: 29% Canada: 23% Private Equity: 14% Europe: 13% Fee-Bearing Family Office: 10% Fee-Bearing Middle East: 10% Capit
Slide 16: Financial Review
Overview Financial Review 15 3Q-20 INVESTOR UPDATE
Slide 17: Solid balance sheet with record liquidity levels
Solid balance sheet with record liquidity levels Cash and Credit Facility Reduced floating rate risk Cash: $793M Fixed: 78% $1.1bn Revolving credit facility: $300M 91% Fixed or Hedged via interest rate cap: 13% Cash and Lines Floating: 9% hedged debt of Credit (KW Share) Limited near-term maturities
Slide 18: Components of Value
Components of Value Below are key valuation metrics as of September 30, 2020. Investments Kennedy Wilson’s Share ($ in millions) Income Producing Assets Description Est. Annual NOI(1)(2) 1 Multifamily 25,471 units $ 189.5 2 Commercial 19.1 million sq ft of office, retail, and industrial 206.3 3 Hote
Slide 19: Western U.S. Markets
Western U.S. Markets 18 3Q-20 INVESTOR UPDATE
Slide 20: U.S. stabilized portfolio
U.S. stabilized portfolio 93% Multifamily & Office Sectors Geography Multifamily: 74% Pacific Northwest: 38% $225m $225m Office: 19% Mountain States: 24% Retail: 5% Southern California: 20% Estimated Loans: 2% Estimated Northern California: 18% Annual NOI1 Annual NOI1 1 As defined in definitions sec
Slide 21: Washington is KW's largest U.S. market
Washington is KW’s largest U.S. market; represents 32% of U.S. portfolio NOI 2006 First acquisition in WA 10,544 Apartments (incl.1,757 in lease-up or 1 under development) 2.4m Office sq ft $73m Estimated Annual NOI2 1 There can be no assurances that such units will be fully developed 2 As defined i
Slide 22: Vintage Housing: Growing our portfolio with minimal equity
Vintage Housing: Growing our portfolio with minimal equity 30% growth in stabilized units by YE-23 At acquisition (2Q-15) 3Q-20 4Q-23 1 Communities (stabilized) 30 39 48 Stabilized units 5,500 7,700 10,000 Vintage at Urban Center, Southside by Vintage, Steamboat by Vintage, Lynwood, WA, U.S. Seattle
Slide 23: Mountain States represents the 2nd largest U.S region
Mountain States represents the 2nd largest U.S region As of 3Q-20 $54m Estimated Annual NOI1 Other 10% Alpine Meadows, Sandy, UT Nevada 20% Utah 49% Idaho 21% Whitewater Park, Boise, ID 1 As defined in definitions section in the appendix 22 3Q-20 INVESTOR UPDATE
Slide 24: Mountain States portfolio growth
Mountain States portfolio growth 80% increase in Mountain States NOI over last 3 years 3Q-17 3Q-20 $30m 80% $54m 1 Est. Ann. NOI Multifamily units 3,900 97% 7,700 Commercial sq ft 1.4m 107% 2.9m 1 As defined in definitions section in the appendix 23 3Q-20 INVESTOR UPDATE
Slide 25: European Markets
European Markets 24 3Q-20 INVESTOR UPDATE
Slide 26: Europe stabilized portfolio
Europe stabilized portfolio 91% Ireland and UK Sectors Geography Office: 53% United Kingdom: 47% $185m $185m Retail: 23% Ireland: 44% Multifamily: 13% Italy: 5% Estimated Industrial: 6% Estimated Spain: 4% Annual NOI1 Hotel: 5% Annual NOI1 1 As defined in definitions section in the appendix 25 3Q-20
Slide 27: Irish multifamily: market imbalance creates opportunity
Irish multifamily: market imbalance creates opportunity Low institutional ownership 311,000 Private rental units <5% Owned by institutional in Ireland1 landlords2 Urgent need for new residential stock 34,000 Annual residential 18,000 Forecast new units requirement3 in 20204 Fewer apartment dwellers
Slide 28: Ireland: KW's dominant presence in Dublin
Ireland: KW’s dominant presence in Dublin 1 Capital Dock 2 Hanover Quay Liffey Trust 3 1 12 8 Alliance 2 4 Northbank 3 State 4 5 Street 11 Alto Vetro 6 5 9 6 10 7 Coopers Cross 8 7 9 10 11 12 KW owned buildings 27 3Q-20 INVESTOR UPDATE
Slide 29: Ireland: growing market opportunity
Ireland: growing market opportunity Market overview Record take-up combining with declining unemployment 4 5 One of the fastest growing Dublin office take-up (m sq ft) Unemployment rate (RHS) EU economies 15.0% 3.0 5.6% 12.5% (million sq ft) 2.0 10.0% 2019 GDP output (real annual growth)1 7.5% 1.0 I
Slide 30: Strong office fundamentals and favorable UK & Irish lease structures
Strong office fundamentals and favorable UK & Irish lease structures 1 UK & Irish leases KW UK & Ireland office portfolio Long-term with 5-year rent reviews 7.4yrs 44% WAULT Upward-only rent Upward-only rent (to first break) reviews or fixed uplifts reviews in UK (and pre- 2010 in Ireland) 6.4% 95%
Slide 31: Robust European office fundamentals driving future growth
Robust European office fundamentals driving future growth Key European office markets for KW M25 London 3Q-20 Watford South East 3Q-20 Harlow Prime rents (£ psf)102.00 Prime rents (£ psf) 39.00 1 M25 London Take-up (m sq ft) 8.4 Reading Windsor Take-up (m sq ft)1 2.0 Vacancy (%) 6.5 Hook Farnborough
Slide 32: Appendix
Overview Appendix 31 3Q-20 INVESTOR UPDATE
Slide 33: Multifamily Portfolio: $190m of Estimated Annual NOI
1 Multifamily Portfolio: $190m of Estimated Annual NOI U.S. Ireland $166.4m 1 Boise $23.1m 1 Est. Ann. NOI Est. Ann. NOI Assets Units Seattle WA Assets Units 3 87 2 23,391 2 Portland 9 2,0803 $67.6m OR ID $12.2m Pacific Northwest (WA, OR) Dublin Assets Units Assets Units Reno CA 43 10,121 6 1,158 Sa
Slide 34: Office Portfolio: $140m of Estimated Annual NOI
1 Office Portfolio: $140m of Estimated Annual NOI U.S. Europe $41.5m Seattle $98.9m Est. Ann. NOI 1 WA Est. Ann. NOI 1 Assets Area (sq ft) MT Assets Area (sq ft) 2 2 3 21 6.7m OR 32 3.6m3 ID $18.4m WY $49.7m Pacific Northwest CA UK Assets Area (sq ft) San NV Francisco Assets Area (sq ft) Dublin 8 2.
Slide 35: KW top 20 assets
KW top 20 assets 1 Accounts for 39% of Estimated Annual NOI KW share Commercial Units Acquisition 2 Asset name Location Region Sector of NOI (000 sq ft) /rooms date 1 Bella Vista Richmond, CA Nor. California Multifamily 14.6 - 1,008 May-11 2 90 East Issaquah, WA Pacific Northwest Office 14.5 587 - J
Slide 36: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA ($ in m) 3Q-20 2019 2018 2017 2016 2015 2014 Net (loss) income $(19.7) $321.1 $212.1 $138.0 $76.5 $59.0 $90.1 Non-GAAP adjustments: Add back: Interest expense 50.8 215.1 238.2 217.7 191.6 155.7 103.4 Early extinguishment of corporate debt - - - - - 1.0
Slide 37: Reconciliation of Net Income to Adjusted Net Income
Reconciliation of Net Income to Adjusted Net Income ($ in m) 3Q-20 2019 2018 2017 2016 2015 2014 Net (loss) income $(19.7) $321.1 $212.1 $138.0 $76.5 $59.0 $90.1 Non-GAAP adjustments: Add back (less): Depreciation and amortization 44.3 187.6 206.1 212.5 198.2 166.3 104.5 Kennedy Wilson’s share of de
Slide 38: Appendix: Definitions
Appendix DEFINITIONS: Adjusted EBITDA: represents net income before interest expense, our share of interest expense included in income from investments in unconsolidated investments, depreciation and amortization, our share of depreciation and amortization included in income from unconsolidated inve
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