Killam Apartment REIT (KMP-UN) Q4 2024 earnings summary

Executive summary

• Achieved 8.4% same property NOI growth in 2024, exceeding the 8% target, with 38.9% of NOI generated outside Atlantic Canada.

• Completed a corporate restructuring, simplifying the organizational structure and reversing $279M in deferred taxes, boosting net income by a non-cash gain.

• Disposed of $59.2M in non-core assets, surpassing the $50M target, supporting portfolio optimization and geographic diversification.

• Broke ground on two new developments and advanced a third, with strong pre-leasing momentum.

• Maintained debt as a percentage of total assets at 40.4%, a record low and a 250 bps improvement from 2023.

Financial highlights

• Property revenue reached $364.6M, up 4.7% year-over-year; FFO per unit rose 2.6% to $1.18; AFFO per unit increased 2.1% to $0.99.

• Same property NOI grew 8.4%, driven by a 6.0% increase in same property revenue and 1.7% rise in operating expenses.

• Net income rose to $667.8M from $266.3M, mainly due to $279M deferred tax recovery and $252.4M in fair value gains.

• AFFO payout ratio improved to 71% from 72% in 2023.

• Operating margin improved by 150 basis points year-over-year.

Outlook and guidance

• 2025 targets include 4–7% same property NOI growth, $100–$150M in non-core asset sales, and maintaining debt below 42% of total assets.

• Developments in Halifax and Waterloo expected to complete in 2025-2026, with The Carrick pre-leasing ahead of expectations.

• Anticipate 5%-6% organic top-line revenue growth in 2025, with occupancy levels expected to remain high.

• Operating expenses projected to rise 5%-7% in 2025, mainly due to property taxes and higher utility costs.

• Plans to complete one development and break ground on another in 2025.