Killam Apartment REIT (KMP-UN) Q4 2025 earnings summary

Executive summary

• Achieved 6.1% same property NOI growth in 2025, driven by 5.4% revenue growth in apartments and 7.8% in MHC portfolio, exceeding strategic targets.

• Net income for 2025 was CAD 29.4 million, down CAD 638 million year-over-year due to CAD 120.5 million fair value loss and absence of a one-time deferred tax recovery from 2024.

• FFO per unit increased 4.2% to CAD 1.23; AFFO per unit rose 5.1% to CAD 1.04; AFFO payout ratio improved to 69%.

• Completed $148.3 million in non-core asset dispositions, funding $168.8 million in acquisitions and ongoing developments.

• The Carrick development in Waterloo was substantially completed and is now 95% leased.

Financial highlights

• Property revenue rose 5.1% year-over-year to $383.4 million, with same property NOI up 6.1%.

• Q4-2025 NOI was $64.0 million, up from $61.1 million in Q4-2024; Q4 FFO per unit was $0.30, up 3.4%.

• Same property apartment occupancy was 97.3%, 30 bps lower year-over-year, with average monthly rent up 4.8%.

• Debt as a percentage of total assets was 41.9% at year-end, up from 40.4% last year; debt to normalized EBITDA improved to 9.66x.

• CMHC insured mortgages represented over 90% of total apartment mortgage debt, enabling favorable borrowing rates.

Outlook and guidance

• Targeting at least 3% revenue and NOI growth for same property apartments in 2026, with Atlantic markets expected to outperform.

• Expect continued FFO growth in 2026 from stabilized occupancy at The Carrick and completion of new developments in Waterloo and Halifax.

• Interest expense growth expected to stabilize by 2027, easing financing headwinds.

• Ongoing focus on energy efficiency, capital recycling, and maintaining debt below 42% of total assets.

• Disposition target for 2026 is a minimum of CAD 50 million in assets.