Killam Apartment REIT T.KMP.UN

Alternate Symbol(s): KMMPF

Real Estate REIT - Residential

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 Mar 17, 2025 8:54am

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Post# 36496037

TD Notes

REAL ESTATE Q4/24 RECAP; EXTREME CANADA DISCOUNT HAS STARTED TO FADE

THE TD COWEN INSIGHT

Q4/24 results were slightly ahead of our forecasts and fundamentals in most sectors remain healthy despite macro concerns. Looking ahead, we remain confident in our growth forecasts and believe current valuations are very attractive and already capture today's headline risks. Current valuations remain particularly attractive relative to U.S. REITs.

Q4/24 results slightly ahead: Overall AFFO/unit growth* of +6.6% y/y (+4.4% excluding Seniors) was 2% ahead our estimates. Seniors was once again the growth leader at +28% and also had the biggest beat at +13% (SIA's was 24%). Retail delivered closer to its potential with +4% y/y growth (and a 2% beat). Residential's growth moderated to +6% (and missed by 2%) while Industrial's growth ticked up to +5% with a slight beat (both led by GRT). During Q4/24 earnings, we raised five target prices and reduced three (and d/g ERES to HOLD). Our detailed Q4/24 reviews: Retail, Residential.

We have updated our property sector preferences to Retail, Apartments, Seniors Housing, and Industrial, followed by Office and Diversified.

Within the three main 'core' sectors (Retail, Industrial, Residential), Industrial REITs YTD have seen continued erosion in their relative valuations — likely due to a greater perceived exposure to tariffs. As expected, tariffs were featured in Industrial REIT management commentaries/outlooks more than all other sectors. But even there, the expected near-term impact is quite modest.
Residential REITs have bounced off a bottom, keeping their relative valuations tight vs historically. This likely reflects valuations having fallen so low that further downside seems unlikely, increased economic recession risk can shift investor favour toward apartments, and media reports of Anson taking a 9% stake and pushing for change at Interrent REIT (link).
Retail REIT relative valuations have deservedly improved over the past year based on recent quarters' performance. While the outlook has remained strong, today's 'trade war' and HBC's CCAA process (link) have somewhat clouded the visibility.
Seniors Housing units/shares are tracking toward the third consecutive year of leading returns. While we see highly visible strong fundamentals and limited macro risks, we note that y/y AFFO growth this year is set to fall closer in line with the range of other sectors. At some point (e.g., when macro certainty returns), we expect relative valuations to begin mean-reverting.

Our overall top larger-cap picks are FCR.un, BEI.un, SIA, KMP.un, and PMZ.un.