Kennedy-wilson Holdings Inc. · NYSE:KW

Kennedy-wilson — Q2 2023 Earnings Presentation

43 slides from Kennedy-wilson's earnings presentation, Aug 3, 2023

  1. Slide 1: Q2-2023 Investor Presentation

    Kennedy Wilson Q2-2023 Investor Presentation

  2. Slide 2: Table of Contents

    TABLE OF CONTENTS SECTION 1 Strategic Review Page 2 SECTION 2 Real Estate Portfolio Page 8 SECTION 3 Investment Management Platform Page 14 SECTION 4 ESG Page 17 SECTION 5 Financial Review Page 20 SECTION 6 U.S. Markets Page 23 SECTION 7 European Markets Page 28 © KENNEDY WILSON SECTION 8 Appendix P

  3. Slide 3: Strategic Review

    © KENNEDY WILSON S T R AT EG I C R E V I E W The Clara, Boise, Idaho

  4. Slide 4: Q2-23 Highlights

    Q2-23 HIGHLIGHTS Acquired $4.1 billion loan portfolio off-market from Pacific Western Bank (“PacWest”) Pacific Western with experienced PacWest construction lending team joining KW Bank Transaction KW investment was 5%; transaction added $1.9 billion in Fee-Bearing Capital Estimated Annual NOI incre

  5. Slide 5: Case Study: Pacific Western Bank Loan Acquisition

    CASE STUDY: PACIFIC WESTERN BANK LOAN ACQUISITION Providing liquidity to regional bank through discounted loan purchase Opportunity Execution • Off-market opportunity to • Entered exclusivity in May 2023 acquire discounted $4.1 with extremely short due billion portfolio totaling 65 diligence period

  6. Slide 6: Kennedy Wilson at a Glance

    KENNEDY WILSON AT A GLANCE (NYSE: KW) $25B Real Estate AUM1 37,400 26M Multifamily Units2 Commercial Sq Ft3 © KENNEDY WILSON 1) As defined in definitions section in the appendix. 2) Includes 990 lease-up units and 3,824 units under development. Capital Dock, Dublin, Ireland 3) Includes 1.7m sq ft of

  7. Slide 7: About Kennedy Wilson

    ABOUT KENNEDY WILSON Kennedy Wilson (NYSE:KW) is a leading global real estate investment company. We own, operate, and invest in real estate through our balance sheet and through our investment management platform across the United States, United Kingdom, and Ireland. We primarily focus on multifami

  8. Slide 8: The Kennedy Wilson Advantage

    THE KENNEDY WILSON ADVANTAGE Globally diversified real estate portfolio in growing markets with complementary investment management platform Long-term relationships with major financial institutions Local expertise to accretively allocate capital First-mover advantage from early entry in key target

  9. Slide 9: Real Estate Portfolio

    © KENNEDY WILSON R EA L E S TAT E P O R T F O L I O Bristol at Southport, Renton, Washington

  10. Slide 10: Two Key Investment Segments

    TWO KEY INVESTMENT SEGMENTS Consolidated Portfolio Co-Investment Portfolio Wholly-owned investments with accretive Real estate and loan investments with asset management opportunities strategic partners and commingled fund business (KW ownership 5-50%) $295M 1 $38M $249M $7.9B $61M Estimated Annual

  11. Slide 11: Stabilized Portfolio Breakdown

    STABILIZED PORTFOLIO BREAKDOWN Sectors Geography $499M Multifamily: 53% Office: 29% $499M U.S.: 61% Ireland: 19% Estimated Estimated Annual NOI1 Retail: 6% Annual NOI1 U.K.: 17% Loans: 5% Italy & Spain: 3% Hotel: 4% Industrial: 3% 456 37,362 25.8 93.9% No. of investments No. of Commercial Occupancy4

  12. Slide 12: Suburban Assets Comprise 90% of Multifamily NOI

    SUBURBAN ASSETS COMPRISE 90% OF MULTIFAMILY NOI Multifamily $262M Suburban: 90% Multifamily: Mission Hills, Camarillo, CA, U.S. Estimated Urban: 10% Annual NOI © KENNEDY WILSON Multifamily: Atlas, Issaquah, WA, U.S. Q2-2023 Investor Presentation 11

  13. Slide 13: Development and Leasing Pipeline Expected to Add ~$99M in NOI

    DEVELOPMENT AND LEASING PIPELINE EXPECTED TO ADD ~$99M IN NOI 2023 2024-2025 $11M $88M Quinn by Vintage, Shoreline, WA Dovetail, Boise, Idaho Kona Village, Kona, Hawaii The Oaks, Thousand Oaks, CA Oxbow, Bozeman, Montana Coopers Cross, Dublin © KENNEDY WILSON Station by Vintage, Covington, WA Grange

  14. Slide 14: Expected NOI from Completion of Development & Future Leasing

    EXPECTED NOI FROM COMPLETION OF DEVELOPMENT & FUTURE LEASING +$99M of Est. Ann. NOI by 2025 $60 $59 $50 $20 $40 $29 $30 $15 $20 $39 $11 $10 $2 $14 $9 $0 2023 2024 2025 US Europe © KENNEDY WILSON Based on expected stabilization date for development projects . The scope of these projects are subject t

  15. Slide 15: Investment Management Platform

    © KENNEDY WILSON I N V E ST M E N T M A N A G E M E N T P L AT F O R M Clancy Quay, Dublin, Ireland

  16. Slide 16: Fee-Bearing Capital Raised from Broad Institutional Investor Base

    FEE-BEARING CAPITAL RAISED FROM BROAD INSTITUTIONAL INVESTOR BASE Investor Type Investor Geography Investor Type Insurance Geography Company: 65% Canada: 55% $7.9B Sovereign Wealth Fund: 13% $7.9B U.S.: 18% Fee-Bearing Pension Fund: 10% Fee-Bearing Asia: 16% Capital1,2 Capital1,2 Private Equity: 5%

  17. Slide 17: Debt Investment Platform

    DEBT INVESTMENT PLATFORM Sectors Geography $4.6B Multifamily: 38% Office: 21% $4.6B So. California: 27% No. California: 21% Outstanding Outstanding Loan Balance Hotel: 17% Loan Balance Mountain West: 12% Retail: 7% Pacific Northwest: 10% Industrial: 6% Northeast: 12% Student Housing: 6% Southeast: 1

  18. Slide 18: ESG Overview

    © KENNEDY WILSON E S G OV E RV I E W Kona Village Resort, Kona, Hawaii

  19. Slide 19: Our ESG Program Focuses on Four Pillars

    OUR ESG PROGRAM FOCUSES ON FOUR PILLARS © KENNEDY WILSON Q2-2023 Investor Presentation 18

  20. Slide 20: ESG Program at a Glance

    ESG PROGRAM AT A GLANCE © KENNEDY WILSON Please visit esg.kennedywilson.com for more information. Q2-2023 Investor Presentation 19

  21. Slide 21: Financial Review

    © KENNEDY WILSON FINANCIAL REVIEW One Embassy Gardens , London, UK

  22. Slide 22: Strong Protection Against Rising Interest Rates

    STRONG PROTECTION AGAINST RISING INTEREST RATES Reduced Floating Rate Exposure Cash and Credit Facility 99% Fixed: 70% Hedged via interest $738M Cash: $387M Fixed or Revolving credit rate caps: 29% Cash and Lines hedged debt facility: $351M (KW Share) Floating: 1% of Credit Credit Profile 4.3% 5.5yr

  23. Slide 23: Components of Value

    COMPONENTS OF VALUE Below Are Key Valuation Metrics as of June 30, 2023 Investments Kennedy Wilson’s Share ($ in millions) Income Producing Assets Description Est. Annual NOI(1)(2) 1 Multifamily 32,548 units $261.5 2 Office 9.8 million sq ft 145.0 3 Industrial 10.2 million sq ft 14.2 4 Retail 3.6 mi

  24. Slide 24: U.S. Markets

    © KENNEDY WILSON U.S.MARKETS Prosper Place, Denver, Colorado

  25. Slide 25: U.S. Stabilized Portfolio

    U.S. STABILIZED PORTFOLIO $237m $305M $305M Estimated Estimated Annual NOI1 Annual NOI1 Sectors Geography Multifamily: 76% Mountain West: 36% Office: 14% Pacific Northwest: 32% Loans: 8% Southern California: 17% Retail / Industrial: 2% Northern California: 13% Other U.S.: 2% © KENNEDY WILSON 1) As d

  26. Slide 26: Mountain West Portfolio by State

    MOUNTAIN WEST PORTFOLIO BY STATE As of Q2-23 Other2 9% Colorado 13% Idaho New Mexico $110M 24% Alpine Meadows, Sandy, UT 14% Estimated Annual NOI1 Nevada 21% Utah 19% © KENNEDY WILSON Whitewater Park, Boise, ID 1 ) As defined in definitions section in the appendix. 2 ) Includes Montana and Arizona.

  27. Slide 27: Mountain West Represents Largest Apartment Region

    MOUNTAIN WEST REPRESENTS LARGEST APARTMENT REGION 191% Growth in last four years Q2-19 Q2-23 191% Est. Ann. NOI1 $35M $102M Multifamily units 100% (stabilized) 6,195 12,395 Multifamily units (under development) 1,086 1,193 © KENNEDY WILSON 1) As defined in definitions section in the appendix. Q2-202

  28. Slide 28: Vintage Housing: Growing Our Affordable Housing Portfolio

    VINTAGE HOUSING: GROWING OUR AFFORDABLE HOUSING PORTFOLIO 26% Growth Expected in Stabilized Units by YE-25 Vintage at Urban Center, Lynwood, WA, U.S. Southside by Vintage, Seattle, WA, U.S. Steamboat by Vintage, Reno, NV, U.S. At acquisition (Q2-15) Q2-23 Q4-251 Communities (stabilized) 30 46 56 Sta

  29. Slide 29: European Markets

    © KENNEDY WILSON E U R O P EA N M A R K E T S Coopers Cross, Dublin, Ireland

  30. Slide 30: Europe Stabilized Portfolio

    EUROPE STABILIZED PORTFOLIO $194M $194M Estimated Estimated Annual NOI1 Annual NOI1 Sectors Geography Office: 52% Ireland: 49% Multifamily: 16% United Kingdom: 44% Retail: 14% Italy: 4% Hotel: 11% Spain: 3% Industrial/Loans: 7% © KENNEDY WILSON 1) As defined in definitions section in the appendix. Q

  31. Slide 31: Irish Multifamily: Market Imbalance Creates Opportunity

    IRISH MULTIFAMILY: MARKET IMBALANCE CREATES OPPORTUNITY Low institutional Urgent need for new Fewer apartment dwellers ownership residential stock than other EU countries 342,612 34,000 46.3% Private rental units Annual residential % of apartment dwellers in Ireland1 requirement3 in EU countries5 <5

  32. Slide 32: Ireland: KW's Dominant Presence in Dublin

    IRELAND: KW’S DOMINANT PRESENCE IN DUBLIN 1 Capital Dock 2 Alliance Hanover Quay Liffey Trust 1 3 12 8 Northbank 2 4 3 4 State Street 5 11 Alto Vetro 6 5 9 6 10 7 Coopers Cross 8 7 9 10 11 12 © KENNEDY WILSON KW owned buildings Q2-2023 Investor Presentation 31

  33. Slide 33: Ireland: Resilient Growth Market Opportunity

    IRELAND: RESILIENT GROWTH MARKET OPPORTUNITY Economic & Market Overview One of the most defensive Destination for the world’s fastest global economies growing industries5 +3.7% GDP growth forecasted in 20241 Global Leader in Competitiveness innovation 2nd 2nd World ranking most competitive for Ecolo

  34. Slide 34: Strong Office Fundamentals and Favorable UK & Irish Lease Structures

    STRONG OFFICE FUNDAMENTALS AND FAVORABLE UK & IRISH LEASE STRUCTURES UK & Irish leases KW UK & Ireland office portfolio1 Long-term with 5-year rent reviews 39% 96% Upward-only FRI leases rent reviews or fixed uplifts Upward-only rent reviews in UK (and pre-2010 in Ireland) 8.2yrs 5.4yrs WAULT WAULT

  35. Slide 35: Robust European Office Fundamentals Driving Future Growth

    ROBUST EUROPEAN OFFICE FUNDAMENTALS DRIVING FUTURE GROWTH Key European Office Markets For KW Watford Harlow M25 M25 Reading Windsor London Farnborough Dublin London Q2-23 South East Q2-23 Dublin Q2-23 Prime rents (£ psf) 140.00 Prime rents (£ psf) 42.50 Prime rents (€ psf) 65.00 Take-up (m sq ft)1 1

  36. Slide 36: Appendix

    © KENNEDY WILSON APPENDIX The Shelbourne Hotel, Dublin, Ireland

  37. Slide 37: Multifamily Portfolio: $262M of Estimated Annual NOI

    MULTIFAMILY PORTFOLIO: $262M OF ESTIMATED ANNUAL NOI 1 Seattle WA MT Portland OR Reno ID Boise NV San Francisco UT Salt Lake City CA Dublin Bay Area Las Vegas AZ Los Angeles Cork U.S. Ireland $231.0M Assets Units $30.5M Assets Units Est. Ann. NOI1 1152 30,0372 Est. Ann. NOI1 103 2,5113 Mountain West

  38. Slide 38: Office Portfolio: $145M of Estimated Annual NOI

    OFFICE PORTFOLIO: $145M OF ESTIMATED ANNUAL NOI 1 Seattle WA Milan MT OR ID Rome WY NV UT San Francisco CO CA Denver Bay Area Dublin AZ Los Angeles London U.S. Europe $43.2M Assets Area (sq ft) $101.8M Assets Area (sq ft) Est. Ann. NOI1 202 6.1M2 Est. Ann. NOI1 253 3.7M3 Pacific Northwest Southern C

  39. Slide 39: KW Top Assets

    KW TOP 20 ASSETS Accounts KW share Commercial Units Acquisition Asset name for 35% of Location Estimated Annual Region NOI Sector of NOI1 (000 sq ft) /rooms date 1 Shelbourne Dublin Ireland Hotel 20.9 - 265 Aug-14 2 111 BPR London UK Office 17.6 216 - Nov-14 3 90 East Issaquah, WA Pacific Northwest

  40. Slide 40: Reconciliation of Net Income to Adjusted EBITDA

    RECONCILIATION OF NET INCOME ATTRIBUTABLE TO KWH COMMON SHAREHOLDERS TO ADJUSTED EBITDA ($ in M) Q2-23 2022 2021 2020 2019 Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders $39.0 $64.8 $313.2 $92.9 $224.1 Non-GAAP adjustments: Add back (Kennedy Wilson’s Share): Interest ex

  41. Slide 41: Reconciliation of Net Income to Adjusted Net Income

    RECONCILIATION OF NET INCOME ATTRIBUTABLE TO KWH COMMON SHAREHOLDERS TO ADJUSTED NET INCOME ($ in M) Q2-23 2022 2021 2020 2019 Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders $39.0 $64.8 $313.2 $92.9 $224.1 Non-GAAP adjustments: Add back (less): Depreciation and amortiza

  42. Slide 42: Estimated Annual NOI Reconciliation to GAAP NOI

    ESTIMATED ANNUAL NOI RECONCILIATION TO GAAP NOI ($ in M) Q2-23 Rental Revenues $106.6 Hotel Revenues 15.5 Rental (Expenses) (38.7) Hotel (Expenses) (9.7) Loans and other 4.7 Consolidated NOI $78.4 Adjustments: Non-controlling interest (2.0) NOI from unconsolidated investments (KW Share) 41.7 Propert

  43. Slide 43: Appendix: Definitions

    APPENDIX DEFINITIONS: Adjusted EBITDA: represents net income before interest expense, loss on early extinguishment of debt, our share of interest expense included in unconsolidated investments, depreciation and amortization, our share of depreciation and amortization included in unconsolidated inves

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