Killam Apartment REIT (KMP-UN) Q2 2024 earnings summary

Executive summary

• Achieved same property NOI growth of 8.5% in Q2 2024 and 9.3% year-to-date, surpassing targets, with FFO per unit stable at CAD 0.30 compared to Q2 2023.

• Record rental rate growth on turnover at 20.2% and weighted average increase in apartment rental rates of 8.2%.

• High apartment occupancy maintained at 98.2% and strong rental demand across the portfolio.

• Completed lease-up of two major developments, with a third nearing completion, expected to drive FFO growth in H2 2024 and 2025.

• Executed capital recycling strategy, selling non-core assets for $27.6 million in Q2 and post-quarter, with a target of $50 million in dispositions for 2024.

Financial highlights

• Net income of $114.5 million for Q2 2024, with NOI of $59.9 million, up 6.6% from Q2 2023.

• Fair value gains on investment properties totaled CAD 85.5 million in Q2 2024.

• FFO per unit and AFFO per unit remained at $0.30 and $0.25, respectively, with AFFO payout ratio improving to 69%.

• Same property apartment operating margin improved by 140 bps to 66.5%.

• Property revenue for Q2-2024 was $90.8 million, up 4.5% year-over-year.

Outlook and guidance

• 2024 same property NOI growth target raised to over 8%, up from the original 6%.

• New developments are expected to contribute over $3 million in FFO in 2025.

• Additional asset dispositions planned to meet or exceed the $50 million target for 2024.

• Positive outlook on interest rates and refinancing opportunities for 2025.

• Expect approximately 18% turnover for the year, slightly below last year’s 19%.