Killam Apartment REIT T.KMP.UN

Alternate Symbol(s): KMMPF

Killam Apartment Real Estate Investment Trust (Trust) is a Canada-based residential real estate investment trust. The Trust owns, operates, and develops a $5.3 billion portfolio of apartments and manufactured home communities (MCHs). Its segments include Apartment, MHC, and Commercial. Its Apartment segment acquires, operates, manages and develops multifamily residential properties across Canada. Its MHC segment acquires and operates MHC communities in Ontario and Eastern Canada. Its Commercial segment acquires and operates stand-alone commercial properties in Ontario, Nova Scotia and Prince Edward Island. Its apartment portfolio consists of over 18,801 units, including 1,343 units jointly owned with institutional partners. It owns over 5,975 sites in 40 MHCs, also known as land-lease communities or trailer parks, in Ontario and Atlantic Canada. It owns the land and infrastructure supporting these communities and leases sites to tenants who own their own homes and pay Killam site rent.

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Killam Apartment REIT

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Post by retiredcfon Nov 07, 2024 7:21am

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Post# 36300430

RBC

November 6, 2024

Killam Apartment REIT
Solid Q3; divvy increase; a positive tone for 2025

TSX: KMP.UN | CAD 18.10 | Outperform | Price Target CAD 24.50

Sentiment: Neutral

First Look: Killam Apartment REIT (“KMP”) reported FFO/unit of $0.33, +2% y/y, vs. RBCe/consensus of $0.33/$0.33. Results were solid with rent growth on turnover healthy at +20% and portfolio MTM opportunity at +22%. Its preliminary 2025 outlook struck a noticeably positive tone, noting expected “strong SP NOI growth”, margin expansion, and Atlantic Canada potentially outperforming ON and Western Canada.

Key points:

SP NOI growth: +7.4% (SP-Rev +5.9%; SP-Exp +2.6%). Property tax +5%, general opex +3.6%, Utilities -4%. SP NOI margin: 68.7% (+100 bps y/y).
Apartment SP-Occupancy: 97.9% (-30bps q/q, -50 bps y/y); SP Apartment rent +7.2% y/y
2024 SP NOI growth target/guide maintained at >8% (+8.7% YTD)
Rent growth on turnover: +20.4% vs.+20.2% in Q2/24, +19.6% in Q1/24, +19.8% in Q4/23, +16.8% in Q2/23. Renewal spread was 4.7% for a blended spread of +7.7%. 5.8% of suites (14% YTD) turned in Q3.
Portfolio MTM opportunity: +22% (+25% in Q2)
Market rent commentary: Market rents softening in Western Canada and higher end of ON, stable in NS, and accelerating across rest of Atlantic Canada
Asset sales: Sold 144 units for $17.9M in Q3 and 60 units for $8.2M in Halifax ($137K/unit) post Q3. Targeting $100–150M in 2025.
Distribution increased +2.9% to $0.72/unit annualized, starting November.
Leverage: Debt to assets of 40.7% (-50 bps q/q). Net debt to EBITDA 9.86x (-0.14x q/q).
IFRS BV (pre-tax) $24.85 (-0.5% q/q). Cap rates for its apartment and MHC portfolio were 4.61% (-1bps q/q) and 6.03% (-1 bps q/q), respectively.