Killam Apartment Reit · TSX:KMP.UN
Killam Apartment Reit — Killam Apartment Real Estate Investment Trust — Q3 2023 Earnings Presentation
23 slides from Killam Apartment Reit's earnings presentation, Nov 8, 2023
Slide 1: Q3-2023 Results Conference Call
Q3-2023 Results Conference Call November 8, 2023 | 9am EDT 1
Slide 2: Cautionary Statement
Q3-2023 | Cautionary Statement This presentation may contain forward-looking statements with respect to Killam Apartment REIT ("Killam") and its operations, strategy, financial performance and condition. These statements generally can be identified by use of Harlington Apartments, Halifax forward-lo
Slide 3: Focus on Long-Term Growth Drivers
Q3-2023 | Focus on Long-Term Growth Drivers NOI Contribution by Market (%) as at September 30, 2023 AB | 8.3% Calgary | Edmonton NL | 4.5% St. John’s BC | 3.6% PEI | 6.0% Victoria| Courtenay Charlottetown NS | 31.7% Halifax ON | 25.2% NB | 20.7% Ottawa | London Moncton | Fredericton Toronto | KWC Sa
Slide 4: Financial Highlights
Q3-2023 | Financial Highlights Q3 FFO & AFFO Per Unit Same Property Portfolio For the three months ended Sept 30, 2023 Q3-2023 Q3-2022 8.1% 5.6% 0.7% $0.32 $0.31 $0.28 $0.27 Revenue Expense NOI FFO AFFO YTD FFO & AFFO Per Unit Same Property Portfolio For the nine months ended Sept 30, 2023 2023 2022
Slide 5: Financial Highlights
Q3-2023 | Financial Highlights $68.3M $0.32 8.1% 62% 42.8% Net Income FFO per Unit(1) Same Property NOI AFFO payout ratio(3) Total Debt as a % of Total Growth(2) Assets (4) Includes $60.5 million of net 3.2% increase from $0.31 per AFFO payout ratio was 62%, a unit in Q3-2022. AFFO per unit 8.1% gro
Slide 6: Strategic Targets
Q3-2023 | Strategic Targets Target: Average 3.0%–5.0% Killam achieved same property NOI growth of 7.5% for the nine months ended September 30, 2023. Based on the results achieved to date in 2023, Killam expects same property NOI growth in 2023 to exceed the top end of its target and has increased it
Slide 7: Financial Highlights – Apartments
Q3-2023 | Financial Highlights – Apartments Apartments Same Property Rental Rate Growth by Quarter Upon Lease Renewal For tenants with lease renewals in For new tenants moved in during Q3, Upon Unit Turn Q3, rents increased by 3.2%. rents increased 16.8%. 18% Combined Average Increase % 16% 14% 12%
Slide 8: Capturing Market Rents: Annual Turnover by Region
Q3-2023 | Capturing Market Rents Annual Turnover by Region Killam’s turnover was 2020 2021 2022 22% in 2022 YTD Oct 2023 Avg 2021 Avg 2022 and expect turnover 50% for 2023 to be ~19%. 40% 30% 20% 10% 38% 30% 36% 26% 30% 23% 27% 19% 25% 14% 23% 20% 22% 20% 22% 16% 21% 15% 20% 14% 14% 12% 10% 9% 0% *R
Slide 9: Financial Highlights – Expenses
Q3-2023 | Financial Highlights – Expenses Total same property operating expenses were up 0.7% in Q3-2023. The increase was driven a 1.7% increase in general operating expenses, and a 1.3% increase in utility and fuel expenses. These increases were offset by a 0.9% decrease in property taxes. Same Pr
Slide 10: Conservative Debt Metrics
Q3-2023 | Conservative Debt Metrics Total Debt as a % of Assets(1) Interest Coverage Ratio(2) Debt to Normalized EBITDA(3) 47% 45% 43% 41% 39% 37% 43.4% 44.6% 45.0% 45.3% 42.8% 3.20 3.36 3.53 3.31 3.11 10.15 10.78 11.33 11.21 10.51 35% 2019 2020 2021 2022 Q3-2023 2019 2020 2021 2022 Q3-2023 2019 202
Slide 11: Debt Ladder
Q3-2023 | Debt Ladder Apartment Mortgage Maturities by Year As at September 30, 2023 Mortgage Maturities ($) 5 year estimated CMHC-insured rate 10 year estimated CMHC-insured rate Weighted average interest rate (apartments) $500 6% $450 5% $400 $350 4% $300 3.56% 3.68% $250 3.28% 3% 3.09% $200 2.94%
Slide 12: Financial Highlights – Commercial
Q3-2023 | Financial Highlights – Commercial Commercial Portfolio 949,879 SF Commercial Same Property NOI Growth Revenue NOI Other 27.9% Brewery Westmount 18.9% Market, Place, 10.4% Halifax Waterloo 8.0% 6.6% 6.3% 0.5% 0.8% Royalty Crossing, Charlottetown Q3-2020 Q3-2021 Q3-2022 Q3-2023 Total Commerc
Slide 13: Financial Highlights – MHC
Q3-2023 | Financial Highlights – MHC MHC Same Property Portfolio For the three months ended Sept 30, 2023 Permanent Seasonal Consolidated 6.2% 5.9% 5.8% 5.5% 5.4% 5.4% 5.2% 5.0% 4.6% NL ON NB NS Revenues Expenses NOI MHC Operating Margins Permanent MHC Seasonal Resorts Q3 Seasonal Resorts 75% 70% 65
Slide 14: ESG Update
Q3-2023 | ESG Update Killam successfully completed its 5th annual GRESB submission 85% of employees are satisfied with their role of employees feel positively about 90% Killam’s diversity efforts of employees report excellent relationships 87% with their supervisors 92% ofwork employees like the peo
Slide 15: Disposition Activity
Q3-2023 | Disposition Activity Killam is focused on identifying dispositions that will maximize value for our Unitholders and strengthen our balance sheet. Our strategic target of recycling $100 million of non-core assets in 2023 is accretive to NAV and FFO. Sale Price Property Location Disposition
Slide 16: Leasing of Developments Continues
Q3-2023 | Leasing of Developments Continues Fully leased Latitude, Ottawa The Kay, Mississauga Luma, Ottawa 42% 54% leased leased Governor, Halifax Civic 66, Kitchener 16
Slide 17: Completed Developments – The Governor, Halifax
Q3-2023 | Completed Developments – The Governor, Halifax The Governor - 12 luxury suites and 3,500 square foot ground floor commercial development in downtown Halifax 17
Slide 18: Completed Developments – Civic 66, Kitchener
Q2-2023 | Completed Developments – Civic 66, Kitchener Green features: - Geothermal heating & cooling - Sub-metered water - Low-flow plumbing fixtures - PV solar panels - EV car chargers - Heat pumps for domestic hot water 18 18
Slide 19: Active Developments
Q3-2023 | Active Developments Killam currently has two active developments underway, which will add an additional 373 new high-quality suites to Killam’s portfolio in the next two years. Nolan Hill Phase 2 | 234 units The Carrick | 139 units Calgary Waterloo Cost $65M (1) $84M Expected Completion Da
Slide 20: Future Development Activity – Nolan Hill, Calgary
Q3-2023 | Future Development Activity – Nolan Hill, Calgary Killam has a 10% interest* in the 234-unit second phase of the Nolan Hill development Broke ground in Q4-2021 and is expected to be completed in late 2023 Progress shots as of October 2023 20 *Killam has a $65.0 million commitment to purcha
Slide 21: Future Development Activity – The Carrick, Waterloo
Q3-2023 | Future Development Activity – The Carrick, Waterloo WESTMOUNT PHASE 1 (The Carrick) Broke ground on the 139-unit development in Waterloo in Q2-2022. Progress shots as of November 2023 Key Statistics Number of units 139 Start date Q2-2022 Est. completion date Q1-2025 Project budget ($M) $83
Slide 22: Non-IFRS Measures
Non-IFRS Measures Management believes the following non-IFRS financial measures, ratios and supplementary information are relevant measures of the ability of Killam to earn revenue and to evaluate Killam's financial performance. Non-IFRS measures should not be construed as alternatives to net income
Slide 23: Q3-2023 Results Conference Call
Q3-2023 Results Conference Call November 8, 2023 | 9am EDT 23
Killam Apartment Real Estate Investment Trust — Q3 2023 Earnings Presentation on 6ix