Killam Apartment REIT (KMP-UN) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2-2026 operating performance with 3% same property NOI growth and 4.6% growth in the apartment portfolio, driven by high occupancy (97.6%) and robust demand, especially in Atlantic Canada.

• Consolidated property revenue reached $99.2M, up 3.7% year-over-year; net income rose to $63.3M from $33.1M, primarily due to $30.8M in fair value gains.

• Strategic capital recycling included $51M in year-to-date dispositions, with a 2026 target of $150M+.

• Major development milestones achieved: Brightwood (Waterloo) completed and 45% leased, Eventide (Halifax) on track for Q4 completion, and Nolan Hill (Calgary) progressing.

• Repurchased and cancelled 1.7 million Trust Units at a discount to NAV, reflecting disciplined capital allocation.

Financial highlights

• Same property apartment revenue grew 3.8% year-over-year; NOI up 4.6%; weighted average rental increase on renewals and turns was 3.6%.

• FFO was CAD 39.6 million, up 0.5% from Q2 2025; FFO per unit unchanged at CAD 0.32; AFFO payout ratio stable at 67% for the quarter and 69% on a rolling 12-month basis.

• Debt as a percentage of total assets was 42.8% at June 30, up from 41.9% at year-end 2025.

• Interest coverage ratio declined to 2.85x from 2.93x; debt to normalized EBITDA rose to 9.78x from 9.66x.

• In-place rents remain about 10% below market, providing mark-to-market growth potential.

Outlook and guidance

• Targeting at least 3.5% same property apartment revenue growth for 2026 and $150M in non-core asset sales; $51M completed YTD.

• NOI growth targets: 3.5% for apartments, 2.5% for consolidated portfolio.

• Expect similar apartment same property NOI growth in 2027, supported by mark-to-market rent opportunities and high occupancy.

• Redevelopment of Westmount Place and stabilization of Brightwood expected to contribute to FFO growth starting in 2027/2028.

• Renewable energy investments progressing, with $1.2M invested YTD toward a $6M minimum target.