Killam Apartment REIT Announces Q2-2026 Operating Performance and Financial Results

HALIFAX, NS, Aug. 5, 2026 /CNW/ -- Killam Apartment REIT (TSX: KMP.UN) ("Killam") today reported its results for the three and six months ended June 30, 2026.

"Killam delivered another quarter of strong operating performance, generating 3.0% same property NOI [net operating income] growth driven by positive leasing spreads and resilient occupancy levels of 97.6% across our apartment portfolio. Atlantic Canada continues to lead our performance, supported by exceptional occupancy and strong mark-to-market opportunity. We remain optimistic that growing investments in Canadian defence spending will provide an additional long-term catalyst for economic growth and housing demand across the Atlantic region, which is home to Canada's two largest military bases by personnel," noted Philip Fraser, President and CEO.

"Brightwood, in Waterloo, Ontario, reached substantial completion during the quarter. This property is currently 45% leased and is expected to contribute meaningfully to FFO [funds from operations] as the property stabilizes in early 2027. While FFO per unit growth was muted in Q2, following the departure of a large office tenant at Westmount Place in Waterloo, Ontario, we have now taken possession of the space and are advancing redevelopment plans that will create a stronger mix of retail and office tenants and enhance the property's long-term value.

"We remained focused on disciplined capital allocation, repurchasing and cancelling approximately 1.7 million Trust Units during the quarter. Given the continued disconnect between our unit price and underlying net asset value, we believe NCIB [normal course issuer bid] activity remains a highly attractive use of capital and an effective way to create long-term value for our unitholders."

Q2-2026 Financial & Operating Highlights
 

• Reported net income of $63.3 million compared to $33.1 million in Q2-2025. The increase in net income is primarily driven by fair value gains on investment properties of $30.8 million in Q2-2026 compared to $3.8 million in Q2-2025, driven by apartment revenue growth and year-over-year improvement in NOI. 
• Generated NOI of $67.2 million, a 4.8% increase from $64.1 million in Q2-2025. 
• Achieved a 2.6% increase in consolidated same property revenue compared to Q2-2025, and generated 3.0% consolidated same property NOI growth compared to Q2-2025.¹ 
• Revenue and NOI from the same property apartment portfolio was up 3.8% and 4.6%, respectively, compared to Q2-2025.¹ 
• Despite the temporary loss of income from a large tenant departure at Westmount Place, FFO per unit of $0.32 and adjusted funds from operations (AFFO) per unit of $0.27 both remained consistent with Q2-2025.^{2, 3} 
• Same property apartment portfolio achieved a year-over-year weighted average rental increase of 3.7%. 
• Same property apartment occupancy improved by 20 bps to 97.6% in Q2-2026, compared to 97.4% in Q2-2025.¹ 
• Repurchased 1,707,015 Trust Units for cancellation at a weighted average purchase price of $18.36 per Trust Unit, a meaningful discount to net asset value per unit. 
• Ended the quarter with total debt as a percentage of total assets of 42.8% and debt to normalized EBITDA of 9.78x.⁴

Summary of Q2-2026 Results and Operations

Achieved Same Property NOI Growth of 3.0%
Killam generated same property NOI growth of 3.0% in Q2-2026, supported by a 2.6% increase in same property revenue and disciplined expense management. Revenue growth was driven by higher same property apartment weighted average rental rates which were up 3.7% year-over-year, increased ancillary revenue, and a 20 bps improvement in same property occupancy to 97.6%. These increases were partially offset by increased rental incentives and lower same property commercial revenue resulting from the departure of a major office tenant at Westmount Place in Waterloo, ON.

The weighted average rental rate increase on apartment units that renewed and turned during the quarter was 3.6%, consistent with Q1-2026. Rental increases averaged 5.0% on unit turns and 3.0% on renewals. While rental incentives increased year-over-year, they continued to represent less than 1.0% of same property apartment revenue in Q2-2026 (Q2-2025 – less than 0.6%).

Same property operating expenses increased 1.9% during the quarter. Same property tax expense rose 1.9% due to higher assessments and mill rates across the portfolio, which were partially offset by the capitalization of property taxes associated with the area being redeveloped at Westmount Place. Same property general operating expenses increased by 3.0%, primarily due to the timing of preventative maintenance costs and higher advertising expenses. These increases were partially offset by a 0.5% decline in same property utility and fuel costs, which were driven by lower natural gas commodity pricing in Alberta coupled with savings in electricity costs in Ontario.

Generated FFO Growth of 0.5% and Maintained FFO per Unit of $0.32
During Q2-2026, Killam generated FFO growth of 0.5% and AFFO growth of 0.4% compared to Q2-2025. Growth was driven by an increase in same property NOI, contributions from The Carrick, a development completed in Q2-2025, and lower administrative expenses, partially offset by higher interest costs. FFO per unit (diluted) was $0.32 and AFFO per unit (diluted) was $0.27, both consistent with Q2-2025. Overall results were impacted by the departure of a large office tenant at Westmount Place, which reduced FFO by approximately $0.9 million during the quarter. Excluding the effects of this vacancy, FFO per unit would have increased by 2.3% year-over-year. Per unit FFO and AFFO results also benefited from units repurchased under Killam's NCIB program.

Active Quarter of NCIB Activity  
During the quarter, Killam significantly increased its NCIB activity, repurchasing 1,707,015 Trust Units for cancellation at a weighted average purchase price of $18.36 per unit. The repurchases were completed at a meaningful discount to net asset value per unit and reflect Killam's approach to capital allocation. This represented the most active quarter of NCIB activity in Killam's history.

Earned Net Income of $63.3 Million
In Q2-2026, Killam earned net income of $63.3 million compared to $33.1 million in Q2-2025. The increase was primarily driven by fair value gains on investment properties of $30.8 million, compared to fair value gains of $3.8 million in Q2-2025. The fair value gains recognized during the quarter were supported by a $3.1 million year-over-year improvement in NOI. Net income was also impacted by unrealized fair value losses of $6.5 million on the mark-to-market adjustments related to Killam's unit-based compensation and to recent unit price appreciation of Exchangeable Units, compared to a fair value loss of $7.9 million in Q2-2025.

Completed a 128-Unit Development Located in Waterloo, ON
Brightwood (150 Wissler), Killam's 128-unit development in Waterloo, ON, reached substantial completion in June 2026, ahead of schedule and below budget. Leasing activity has been strong, with 57 units, or 45% of the building, leased to date. Management expects Brightwood to reach stabilized occupancy in early 2027 and contribute to FFO growth in 2027. Killam also continues to advance the development of Eventide, a 55-unit development in Halifax, NS, which remains on track for completion in Q4-2026. In addition, The Carrick, Killam's 139-unit development in Waterloo, ON, which reached substantial completion in 2025, contributed approximately $0.4 million to FFO growth during the quarter.

Subsequent Events

Subsequent to June 30, 2026, and up to July 31, 2026, Killam repurchased 627,389 Trust Units for cancellation under its NCIB at a weighted average purchase price of $18.83 per Trust Unit.

On August 4, 2026, Killam completed the disposition of nine MHC properties containing 746 sites located in Ontario, for gross proceeds of $50.9 million.

Results Conference Call

Management will host a webcast and conference call to discuss these results and current business initiatives on Thursday, August 6, 2026, at 9:00 AM Eastern Time. The webcast will be accessible on Killam's website at the following link: http://www.killamreit.com/investor-relations/events-and-presentations. A replay of the webcast will be available at the same link for one year after the event.

The dial-in numbers for the conference call are as follows:
North America (toll free): 1-888-699-1199
Overseas or local (Toronto): 1-416-945-7677

Profile

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada's largest residential real estate investment trusts, owning, operating, managing and developing a $5.6 billion portfolio of apartments and manufactured home communities. Killam's strategy to enhance value and profitability focuses on three priorities: 1) increase earnings from its existing portfolio; 2) expand the portfolio and diversify geographically through accretive acquisitions that target newer properties and through the disposition of non-core assets; and 3) develop high-quality properties in its core markets.

Non-IFRS Measures

Management believes the following non-IFRS financial measures, ratios and supplementary information are relevant measures of the ability of Killam to earn revenue and to evaluate Killam's financial performance. Non-IFRS measures should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS, or as indicators of Killam's performance or the sustainability of Killam's distributions. These measures do not have standardized meanings under IFRS and, therefore, may not be comparable to similarly titled measures presented by other publicly traded organizations.

Non-IFRS Financial Measures

• FFO is a non-IFRS financial measure of operating performance widely used by the Canadian real estate industry based on the definition set forth by REALPAC. FFO, and applicable per unit amounts, are calculated by Killam as net income adjusted for fair value gains (losses), interest expense on Exchangeable Units, gains (losses) on disposition, internal commercial leasing costs, depreciation on an owner-occupied building, and land lease adjustments. FFO is calculated in accordance with the REALPAC definition. A reconciliation between net income and FFO is included below. 
• AFFO is a non-IFRS financial measure of operating performance widely used by the Canadian real estate industry based on the definition set forth by REALPAC. AFFO, and applicable per unit amounts and payout ratios, are calculated by Killam as FFO less an allowance for maintenance capital expenditures ("capex") (a three-year rolling historical average capital investment to maintain and sustain Killam's properties),  internal and external commercial leasing costs and commercial straight-line rents. AFFO is calculated in accordance with the REALPAC definition. Management considers AFFO an earnings metric. A reconciliation from FFO to AFFO is included below. 
• Adjusted earnings before interest, tax, depreciation and amortization (adjusted EBITDA) is a non-IFRS financial measure calculated by Killam as net income before fair value adjustments, gains (losses) on disposition, financing costs, restructuring costs, and depreciation. A reconciliation between net income and adjusted EBITDA is included below. 
• Normalized adjusted EBITDA is a non-IFRS financial measure calculated by Killam as adjusted EBITDA that has been normalized for a full year of stabilized earnings from recently completed acquisitions, dispositions and developments, on a forward-looking basis. In addition, adjustments have been made to eliminate earnings associated with properties sold in the last 12 months. A reconciliation between adjusted EBITDA and normalized adjusted EBITDA is included below. 
• Net debt is a non-IFRS measure used by Management in the computation of debt to normalized adjusted EBITDA. Net debt is calculated as the sum of mortgages and loans payable, credit facilities and construction loans (total debt), reduced by the cash balances at the end of the period. The most directly comparable IFRS measure to net debt is debt. A reconciliation is included below. 

Non-IFRS Ratios

• Interest coverage is calculated by dividing adjusted EBITDA by mortgage, loan and construction loan interest and interest on credit facilities. 
• Per unit calculations are calculated using the applicable non-IFRS financial measures noted above, i.e. FFO and/or AFFO, divided by the diluted number of units outstanding at the end of the relevant period. 
• Payout ratios are calculated using the distribution rate for the applicable period divided by the applicable per unit amount, i.e. AFFO per unit. 
• Debt to normalized adjusted EBITDA is calculated by dividing net debt by normalized adjusted EBITDA.

Supplementary Financial Measures

• Same property NOI is a supplementary financial measure defined as NOI for stabilized properties that Killam has owned for equivalent periods in 2026 and 2025. Same property revenue is a supplementary financial measure defined as revenue for stabilized properties that Killam has owned for equivalent periods in 2026 and 2025. Same property results represent 96.1% of the fair value of Killam's investment property portfolio as at June 30, 2026. Excluded from same property results in 2026 are acquisitions, dispositions and developments completed in 2025 and 2026. 
• Same property apartment occupancy is a supplemental financial measure defined as actual residential rental revenue, net of vacancy, as a percentage of gross potential residential rent for stabilized properties that Killam has owned for equivalent periods in 2026 and 2025. 

Capital Management Financial Measure

• Total debt as a percentage of total assets is a capital management financial measure and is calculated by dividing total debt by total assets, excluding right-of-use assets. This measure is reconciled in note 21 of the unaudited condensed consolidated interim financial statements.

Non-IFRS Reconciliation (in thousands, except per unit amounts)

For information, please contact:

Claire Hawksworth, CPA
Senior Manager, Investor Relations
chawksworth@killamREIT.com
(902) 442-5322

Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

Certain statements in this press release may constitute forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "commit," "estimate," "potential," "continue," "remain," "forecast," "opportunity," "future", "proposed" or the negative of these terms or other comparable terminology, and by discussions of strategies that involve risks and uncertainties. Such forward-looking statements may include, among other things, statements regarding: investment in Canadian defence spending and its impact on housing demand and the economy generally; the completion of Brightwood's impact on FFO and the timing thereof; the redevelopment of Westmount Place and the impact thereof on Killam's business; Killam's strategy; Killam's same property apartment NOI and revenue growth and the timing thereof; Killam's same property consolidated NOI growth and the timing thereof; the amount, nature and timing of Killam's dispositions; the use of proceeds from Killam's dispositions; Killam's commitment to its capital recycling program and repurchases under Killam's NCIB; expected occupancy rates of Killam's properties; Killam's ability to achieve its development and other targets and the timing thereof; the amount, timing and consideration for or proceeds of Killam's future acquisitions and dispositions, as applicable; and Killam's priorities.

Readers should be aware that these forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated or implied, or those suggested by any forward-looking statements, including: the effects and duration of local, international and global events, any government responses thereto and the effectiveness of measures intended to mitigate any impacts thereof; competition; government legislation and the interpretation and enforcement thereof; litigation to which Killam may be subject; global, national and regional economic conditions (including interest rates and inflation); the availability of capital to fund further investments in Killam's business; Killam's ability to refinance its existing debt; and other factors identified under the "Risk Factors" section of Killam's most recently filed annual information form, under the "Risks and Uncertainties" of Killam's most recently filed MD&A, and in other documents Killam files from time to time with securities regulatory authorities in Canada, each of which is available on SEDAR+ at www.sedarplus.ca. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events may not occur. Although Management believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. While Killam anticipates that subsequent events and developments may cause its views to change, Killam does not intend to update or revise any forward-looking statement, whether as a result of new information, future events, circumstances, or such other factors that affect this information, except as required by applicable law. The forward-looking statements in this press release are provided for the limited purpose of enabling current and potential investors to evaluate an investment in Killam. Readers are cautioned that such statements may not be appropriate and should not be used for any other purpose. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE Killam Apartment Real Estate Investment Trust

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