KILLAM APARTMENT REIT ANNOUNCES Q3-2025 OPERATING PERFORMANCE AND FINANCIAL RESULTS

HALIFAX, NS, Nov. 5, 2025 /CNW/ - Killam Apartment REIT (TSX: KMP.UN) ("Killam") today reported its results for the three and nine months ended September 30, 2025.

"We are pleased with our financial and operating performance for the third quarter of 2025. We delivered a 5.5% increase in same property NOI [net operating income] and a 3.0% increase in FFO [funds from operations] per unit compared to Q3-2024," noted Philip Fraser, President and CEO. "Same property revenue growth of 5.2% was an important contributor to our financial results.

"We are committed to our capital recycling program and were active with both acquisitions and dispositions during the third quarter. Killam completed the sale of 12 properties located in Prince Edward Island [PEI] for gross proceeds of $90.9 million, and the sale of an apartment property located in Saint John, New Brunswick [NB] for $17.0 million. These transactions bring Killam's 2025 disposition total to $147.6 million, and funds from capital recycling were used in the quarter to acquire $168.8 million of properties, including $140.1 million in Ottawa, ON, and $28.7 million in Fredericton, NB.

"Growth through development continues to be a key element of our strategy. With a disciplined approach, we are enhancing our portfolio with high-quality apartment developments. I am pleased to announce that The Carrick, completed in July 2025, has reached a leasing rate of 80%, with full occupancy anticipated by early 2026. Additionally, two projects currently under construction in Waterloo and Halifax remain on schedule for completion in 2026."

Q3-2025 Financial & Operating Highlights  

• Reported net income of $41.9 million compared to $62.7 million in Q3-2024. Killam recorded a fair value loss on investment properties of $4.8 million in Q3-2025, compared to fair value gains of $51.3 million in Q3-2024.
• Generated net operating income of $67.8 million, a 5.2% increase from $64.4 million in Q3-2024.
• Achieved a 5.2% increase in same property revenue compared to Q3-2024 and generated 5.5% same property NOI growth compared to Q3-2024.¹
• Earned FFO per unit of $0.34, a 3.0% increase from the $0.33 earned in Q3-2024.²
• Earned adjusted funds from operations (AFFO) per unit of $0.29, a 3.6% increase from $0.28 in Q3-2024³, and improved the rolling 12-month AFFO payout ratio by 300 basis points (bps) to 69%, from 72% in Q3-2024.²
• Same property apartment occupancy remained healthy in Q3-2025 at 97.2%, compared to 97.7% in Q3-2024.¹
• Ended the second quarter with debt as a percentage of total assets of 40.5% and debt to normalized EBITDA of 9.68x.⁴

Summary of Q3-2025 Results and Operations

Generated 3.0% FFO per Unit Growth and 3.6% AFFO per Unit Growth
Killam generated FFO per unit (diluted) of $0.34 in Q3-2025, representing a 3.0% increase over $0.33 in Q3-2024. AFFO per unit (diluted) grew 3.6% to $0.29, up from $0.28 in the same period in 2024. The growth in FFO and AFFO reflects strong same property NOI and contributions from recently completed developments, partially offset by higher interest and administrative expenses. The increase in AFFO per unit highlights the success of Killam's capital recycling strategy, which is focused on disposing of older, capital-intensive properties and reinvesting in newer, more efficient assets through acquisitions and development.

Delivered Same Property NOI Growth of 5.5%
Killam achieved same property NOI growth of 5.5% during the quarter, driven by a 5.2% increase in same property revenue. The revenue growth reflects a 5.2% year-over-year increase in apartment rental rates and higher ancillary revenue, partially offset by a 50 bps decline in same property occupancy to 97.2%, compared to Q3-2024. The weighted average rental rate increase on units that renewed and turned during the quarter was 4.7%, comprising 9.2% growth on units that turned during the quarter and 3.4% on renewals, compared to 7.7% in Q3-2024. Rental incentives also increased quarter-over-quarter; however, they remain location- and property-specific, representing less than 0.7% of total same property apartment revenue in Q3-2025 (Q3-2024 – less than 0.3%).

Total same property operating expenses increased 4.7% in the quarter. Same property tax expense rose 6.2%, reflecting higher assessments and mill rate increases across the portfolio. Same property general operating expenses were up 5.1%, primarily due to higher wage costs and the timing of certain contract service and repairs and maintenance expenses. Same property utility and fuel costs increased modestly by 0.8%, driven by higher water and electricity costs, partially offset by lower natural gas costs as a result of the elimination of the consumer carbon tax.

Achieved Net Income of $41.9 Million
In Q3-2025, Killam generated net income of $41.9 million, compared to $62.7 million in Q3-2024. The decrease in net income was primarily driven by a $4.8 million fair value loss on investment properties in the quarter, compared to fair value gains of $51.3 million in Q3-2024. The reduction in fair value gains quarter-over-quarter reflects stabilization in asking rents, as well as a slight decline in occupancy rates following peak levels over the last two years. This was partially mitigated by a $3.4 million increase in NOI and a $11.3 million reduction in deferred tax expense related to the internal reorganization that was completed by way of a plan of arrangement effective November 30, 2024 (the "Arrangement," as described on page 23).

Recycled Capital through $110.6 Million in Dispositions and $168.8 Million in Acquisitions
Killam's capital recycling program is focused on the disposition of non-core and slower-growth properties, or those that are more capital intensive. During the quarter, Killam completed the sale of 12 properties located in Charlottetown and Summerside, PEI, for gross proceeds of $90.9 million, and one apartment property located in Saint John, NB, for gross proceeds of $17.0 million. These transactions bring Killam's 2025 disposition total to $147.6 million, achieving the upper range of its disposition of non-core assets target of $100–$150 million in 2025. The sale of the 12 properties located in PEI reduces Killam's apartment exposure in this region to only 85 units. Proceeds from these sales were used to acquire 114 recently built units in Fredericton, NB, for $28.7 million and the remaining 50% ownership interest in three apartment buildings (representing 302 units, for a total ownership interest of 604 units) and one commercial property in Ottawa, ON that were held in a joint venture for $140.1 million.

Completed a 139-Unit Development Located in Waterloo, ON
The Carrick, Killam's 139-unit development located in Waterloo, ON, reached substantial completion in July 2025. Leasing activity has been strong, with 110 units (80%) leased to date. Management expects the building will reach stabilized occupancy in early 2026, and will contribute positively to FFO growth next year. Killam has also continued to advance the development of Brightwood (150 Wissler), a 128-unit building located in Waterloo, ON and Eventide, a 55-unit development located in Halifax, NS. Both projects are scheduled for completion in 2026 and are expected to contribute positively to FFO per unit growth in late 2026 and into 2027. Development is a key component of Killam's growth strategy, and Management remains confident in its ability to drive value through its development platform.

Continued Improvement in Killam's Annual GRESB Results
In Q3-2025, Killam received its 2025 GRESB results, based on performance for the 2024 reporting year. Killam achieved a score of 82 out of 100, representing a three-point improvement year-over-year, which reflects Killam's ongoing commitment to ESG-related initiatives. Killam also received the results from its annual employee satisfaction survey, achieving an overall satisfaction score of 81%, which exceeds its annual target of 80%. The survey results demonstrate strong employee engagement and provide valuable insights to guide ongoing employee initiatives.

Financial Statements

Killam's unaudited condensed consolidated interim Financial Statements and Management's Discussion and Analysis (MD&A) for the three and nine months ended September 30, 2025, are posted under Financial Reports in the Investor Relations section of Killam's website at www.killamreit.com, and are available on SEDAR+ at www.sedarplus.ca. Readers are directed to these documents for financial details and a discussion of Killam's results.

Results Conference Call

Management will host a webcast and conference call to discuss these results and current business initiatives on Thursday, November 6, 2025, 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 which 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, 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, deferred tax expense (recovery), internal commercial leasing costs, depreciation on an owner-occupied building, and change in principal related to lease liabilities. 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, deferred tax (recovery) expenses, 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. Transaction costs associated with the Arrangement are excluded from adjusted EBITDA. In addition, adjustments have been made to eliminate earnings associated with properties sold in the last twelve 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 all interest bearing debt, being mortgages and loans payable, credit facilities and construction loans, 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 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 2025 and 2024. Same property revenue is a supplementary financial measure defined as revenue for stabilized properties that Killam has owned for equivalent periods in 2025 and 2024. Same property results represent 92.7% of the fair value of Killam's investment property portfolio as at September 30, 2025. Excluded from same property results in 2025 are acquisitions, dispositions and developments completed in 2024 and 2025.
• 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 2025 and 2024.

Capital Management Financial Measure

• 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 22 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: elements of Killam's strategy; expected occupancy rates of Killam's properties; the completion of Killam's development properties and the timing and costs thereof; the impact of Killam's development properties on its business and financial condition, including FFO per unit, and the timing thereof; Killam's ability to drive value through its development strategy; Killam's same property NOI growth for 2025; Killam's commitment to its capital recycling program; the amount, locations, timing and consideration for or proceeds of Killam's future acquisitions and dispositions, as applicable; Killam's commitment to environmental, social and governance (ESG) and sustainability; Killam's ongoing employee initiatives 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; 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 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