Kennedy-wilson Holdings Inc. · NYSE:KW

Kennedy-wilson — Q1 2022 Earnings Presentation

43 slides from Kennedy-wilson's earnings presentation, May 2022

1. Slide 1: 1Q-2022 Investor Presentation

   Kennedy Wilson 1Q-2022 Investor Presentation

2. Slide 2: Table of Contents

   TABLE OF CONTENTS SECTION 1 Strategic Review Page 2 SECTION 2 Real Estate Portfolio and Creation Page 7 Valuation Opportunities SECTION 3 Investment Management Platform Page 14 SECTION 4 ESG Page 16 SECTION 5 Financial Review Page 19 SECTION 6 Western U.S. Markets Page 23 SECTION 7 European Markets

3. Slide 3: Strategic Review

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

4. Slide 4: 1Q-22 Highlights

   1Q-22 HIGHLIGHTS Adjusted EBITDA: $160M (vs $128M in 1Q-21) Financial Adjusted Net Income: $85M (vs $47M in 1Q-21) Highlights EPS: $0.24 per diluted share (vs ($0.04) in 1Q-21) Revenue +11% and NOI +14% in global market-rate same-property portfolio Strong Multifamily Performance 14% NOI growth in U.

5. Slide 5: Kennedy Wilson at a Glance

   KENNEDY WILSON AT A GLANCE (NYSE: KW) $23B 36,500 Real Estate AUM1 Multifamily Units 4.3% 24M Dividend Yield2 Commercial Sq Ft © KENNEDY WILSON 1 ) As defined in definitions section in the appendix 2 ) Based on annual dividend of $0.96 and closing share price of $22.41 on 5/4/22 Capital Dock, Dublin

6. Slide 6: 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. Multifamily: Radius Office: 150

7. Slide 7: 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

8. Slide 8: Real Estate Portfolio and Value Creation Opportunities

   © KENNEDY WILSON R EA L E S TAT E P O R T F O L I O A N D VA LU E C R EAT I O N O P P O R T U N I T I ES Bristol at Southport, Renton, Washington, U.S.

9. Slide 9: Two Key Investment Segments

   TWO KEY INVESTMENT SEGMENTS Consolidated Portfolio Co-Investment Portfolio Targeting wholly-owned investments with Includes real estate and loan investments accretive asset management opportunities with strategic partners and commingled fund business (KW ownership 5-50%) U.S. Multifamily: Lofts at 1

10. Slide 10: Excellent Scale Across Multifamily and Office

    EXCELLENT SCALE ACROSS MULTIFAMILY AND OFFICE Sectors Geography $461M Multifamily: 52% Office: 33% $461M Western U.S.: 59% UK: 20% Estimated Estimated Annual NOI1 Retail: 9% Annual NOI1 Ireland: 18% Hotel / Loans / Italy & Spain: 3% Industrial: 6% 385 36,465 24.2 94.5% No. of investments No. of Comm

11. Slide 11: Suburban Assets Comprise 73% of Multifamily and Office NOI

    SUBURBAN ASSETS COMPRISE 73% OF MULTIFAMILY AND OFFICE NOI Multifamily and Office $391M Suburban: 73% Multifamily: Mission Hills, Camarillo, CA, U.S. Estimated Urban: 27% Annual NOI © KENNEDY WILSON Office: Hamilton Landing, Novato, CA, U.S. 1Q-2022 Investor Presentation 10

12. Slide 12: Office NOI: 89% from Low and Mid-Rise Properties

    OFFICE NOI: 89% FROM LOW AND MID-RISE PROPERTIES Low / Mid / High-Rise Low-rise: 31% $150M Mid-rise: 58% Estimated High-rise: 11% Annual NOI Low-rise office: The Heights, Weybridge, UK Tenant Concentration Single Tenant / $150M Business Park: 69% Estimated Multiple: 31% Annual NOI © KENNEDY WILSON M

13. Slide 13: Development and Leasing Pipeline to Add ~$101M in NOI

    DEVELOPMENT AND LEASING PIPELINE TO ADD ~$101M IN NOI 2022-2023 2024-2025 $33M $68M Kildare Street, Dublin 2 Dovetail, Boise, Idaho Kona Village Resort, Kona, Hawaii 136 El Camino, Beverly Hills, CA Oxbow, Bozeman, Montana Coopers Cross, Dublin © KENNEDY WILSON 38° North Phase II, Santa Rosa, CA Gra

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

    NOI DELIVERY FROM COMPLETION OF DEVELOPMENT & FUTURE LEASING +$101M if Est. Ann. NOI by 2025 $60 $55 $50 $21 $40 $30 $23 $20 $8 $34 $13 $10 $3 $10 $15 $9 $10 $0 2022 2023 2024 2025 US Europe © KENNEDY WILSON 1Q-2022 Investor Presentation 13

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 By Geography Investor Type Insurance Geography Company: 49% Canada: 34% $5.3B Sovereign Wealth Fund: 18% $5.3B U.S.: 28% Fee-Bearing Pension Fund: 14% Fee-Bearing Asia: 22% Capital1,2 Capital1 Family Office: 8%

17. Slide 17: ESG Overview

    © KENNEDY WILSON E S G OV E RV I E W Kona Village Resort, Kona, Hawaii 16

18. Slide 18: Our ESG Program Focuses on Four Pillars

    OUR ESG PROGRAM FOCUSES ON FOUR PILLARS © KENNEDY WILSON 1Q-2022 Investor Presentation

19. Slide 19: ESG Program at a Glance

    ESG PROGRAM AT A GLANCE © KENNEDY WILSON Please visit esg.kennedywilson.com for more information 1Q-2022 Investor Presentation 18

20. Slide 20: Financial Review

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

21. Slide 21: Solid Balance Sheet with Strong Liquidity Position

    SOLID BALANCE SHEET WITH STRONG LIQUIDITY POSITION Cash and Credit Facility Reduced Floating Rate Risk $962M Cash: $462M 94% Fixed: 72% Hedged via interest Revolving credit Fixed or Cash and Lines rate cap: 22% facility: $500M hedged debt of Credit (KW Share) Floating: 6% Strong Credit Profile 3.6%

22. Slide 22: Key Annual Financial Metrics

    KEY ANNUAL FINANCIAL METRICS Adjusted EBITDA Adjusted Net Income $ in M $ in M $928 $509 $713 $728 $443 $397 $608 $307 $456 $243 2017 18 19 20 21 2017 18 19 20 21 Fee-Bearing Capital1 EPS $ in B $5.0 $2.24 $3.9 $1.58 $3.2 $3.0 $1.04 $0.83 $1.8 $0.66 © KENNEDY WILSON 2017 18 19 20 21 2017 18 19 20 21

23. Slide 23: Components of Value

    COMPONENTS OF VALUE Below Are Key Valuation Metrics as of March 31, 2022 Investments Kennedy Wilson’s Share ($ in millions) Income Producing Assets Description Est. Annual NOI(1)(2) 1 Multifamily 31,664 units $240.6 2 Office 10.4 million sq ft 150.0 3 Retail and Industrial 10.9 million sq ft 51.5 4

24. Slide 24: Western U.S. Markets

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

25. Slide 25: U.S. Stabilized Portfolio

    U.S. STABILIZED PORTFOLIO $237m $272M $272M Estimated Estimated Annual NOI1 Annual NOI1 Sectors Sectors Multifamily: 77% Pacific Northwest: 34% Office: 16% Mountain West: 33% Retail / Industrial: 4% Southern California: 18% Loans: 3% Northern California: 15% © KENNEDY WILSON 1) As defined in definit

26. Slide 26: Mountain West Portfolio by State

    MOUNTAIN WEST PORTFOLIO BY STATE As of 1Q-22 Other2 11% Colorado 13% Idaho $89M 28% Alpine Meadows, Sandy, UT Estimated Annual NOI1 Nevada 22% Utah 26% © KENNEDY WILSON Whitewater Park, Boise, ID 1 ) As defined in definitions section in the appendix 2 ) Includes New Mexico, Montana and Arizona 1Q-20

27. Slide 27: Mountain West Represents Largest Apartment Region

    MOUNTAIN WEST REPRESENTS LARGEST APARTMENT REGION 216% Growth in Since 1Q-18 1Q-18 1Q-22 216% Est. Ann. NOI1 $25M $79M Multifamily units 129% (stabilized) 5,006 11,445 Multifamily units (under development) 845 1,034 © KENNEDY WILSON 1 ) As defined in definitions section in the appendix 1Q-2022 Inves

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

    VINTAGE HOUSING: GROWING OUR AFFORDABLE HOUSING PORTFOLIO 24% Growth in Stabilized Units by YE-24 Vintage at Urban Center, Lynwood, WA, U.S. Southside by Vintage, Seattle, WA, U.S. Steamboat by Vintage, Reno, NV, U.S. At acquisition (2Q-15) 1Q-22 4Q-241 Communities (stabilized) 30 43 53 Stabilized u

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 $189M $189M Estimated Estimated Annual NOI1 Annual NOI1 Sectors Geography Office: 57% United Kingdom: 49% Retail: 17% Ireland: 43% Multifamily: 16% Italy: 5% Hotel: 5% Spain: 3% Industrial / Loans: 5% © KENNEDY WILSON 1) As defined in definitions section in the appendix 1

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 46.2% 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 1Q-2022 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 industries4 +7.1% GDP growth forecasted in 20221 Global leader in innovation 1st Top 20 World ranking for Ecological World ranking Sustainabi

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 32% 99% Upward-only FRI leases rent reviews or fixed uplifts Upward-only rent reviews in UK (and pre-2010 in Ireland) 8.0yrs 5.5yrs 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 Hook Farnborough Dublin London 1Q-22 South East 1Q-22 Dublin 1Q-22 Prime rents (£ psf) 125.00 Prime rents (£ psf) 38.50 Prime rents (€ psf) 58.50 Take-up (m sq f

36. Slide 36: Appendix

    © KENNEDY WILSON APPENDIX One Embassy Gardens , London, UK

37. Slide 37: Multifamily Portfolio: $241M of Estimated Annual NOI

    MULTIFAMILY PORTFOLIO: $241M 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 $209.6M Assets Units $31.0M Assets Units Est. Ann. NOI1 1102 29,1202 Est. Ann. NOI1 113 2,5443 Mountain West

38. Slide 38: Office Portfolio: $150M of Estimated Annual NOI

    OFFICE PORTFOLIO: $150M 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 $42.9M Assets Area (sq ft) $107.1M Assets Area (sq ft) Est. Ann. NOI1 212 6.2M2 Est. Ann. NOI1 293 4.2M3 Pacific Northwest Southern C

39. Slide 39: KW Top Assets

    KW TOP 20 ASSETS KW share Commercial Units Acquisition Accounts for 35% of Location Asset name Estimated Annual Region NOI Sector of NOI2 (000 sq ft) /rooms date 1 Bella Vista Richmond, CA Nor. California Multifamily 15.6 - 1,008 May-11 2 90 East Issaquah, WA Pacific Northwest Office 15.2 587 - Jun-

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

    RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA ($ in M) 1Q-22 2021 2020 2019 2018 Net income $40.0 $336.4 $107.8 $321.1 $212.1 Non-GAAP adjustments: Add back: Interest expense 50.5 192.4 201.9 214.2 238.2 Loss on early extinguishment of debt - 45.7 9.3 0.9 - Kennedy Wilson’s share of interest expen

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

    RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME ($ in M) 1Q-22 2021 2020 2019 2018 Net income $40.0 $336.4 $107.8 $321.1 $212.1 Non-GAAP adjustments: Add back (less): Depreciation and amortization 43.3 166.3 179.6 187.6 206.1 Kennedy Wilson’s share of depreciation and amortization included in 1.

42. Slide 42: Estimated Annual NOI Reconciliation

    ESTIMATED ANNUAL NOI RECONCILIATION ($ in M) 1Q-22 Rental Revenues $104.2 Hotel Revenues 6.5 Rental (Expenses) (35.7) Hotel (Expenses) (4.3) Loans and other 2.3 Consolidated NOI $73.0 Adjustments: Non-controlling interest (1.3) NOI from Unconsolidated investments (KW Share) 38.7 Property-Level NOI –

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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