Killam Apartment REIT (KMP-UN) Q1 2025 earnings summary

Executive summary

• Delivered Q1-2025 FFO per unit of CAD 0.28, up 7.7% year-over-year, and AFFO per unit up 9.5% to CAD 0.23, with strong same property NOI growth of 7.8% and high occupancy at 97.5%.

• Net income reached CAD 102 million, including CAD 70 million in fair value gains, reflecting robust operating performance and capital recycling.

• Maintained a 15% rental increase on unit turns and a 5.1% blended rental rate increase, with Atlantic Canada leading regional NOI growth.

• Strategic progress on development, ESG initiatives, and capital allocation, including all-electric and solar projects.

• Continued capital recycling with over CAD 34 million in asset sales completed or under agreement, and a conditional acquisition of Ottawa JV properties.

Financial highlights

• FFO per unit grew 7.7% to CAD 0.28; AFFO per unit increased 9.5% to CAD 0.23; net operating income rose 7.2% to CAD 59 million.

• Same property NOI growth of 7.8% driven by 6.6% revenue growth and 4.6% expense growth; operating margin up 70 bps to 64.1%.

• Net income of CAD 102 million, including CAD 70 million in fair value gains.

• AFFO payout ratio improved to 70%-78%, down from Q1-2024.

• Expense growth moderated by lower utilities; property taxes up 4.8%, utilities up 7.9%.

Outlook and guidance

• Expect to end 2025 at the middle to upper end of 4%-7% same property NOI growth target.

• Revenue growth target reaffirmed at 5%-6% for 2025, supported by mark-to-market opportunities and stable leasing.

• On track to sell CAD 100-150 million of non-core assets in 2025, with proceeds for development, acquisitions, and debt reduction.

• Development projects progressing, with The Carrick (Waterloo) 26% pre-leased ahead of June 1 opening.

• Targeting 10% of operationally controlled energy from renewables by year-end 2025.