Reit, from the owner of Halifax headquarters, reported its greatest increase in net operating income in Halifax in the last five years, according to the new Financial Financial Report of the company.
Killam received $ 67.32 million in net operational income, revenues made after subtracting the expenses of operating a building, from its Halifax apartments last year. Net operational income is not the same as profits because it excludes expenses such as mortgage payments.
“Halifax and Kitchener-Waterloo-Cambridge are still two of Killam’s strongest markets,” said Executive Vice President Robert Richardson during the company’s fourth-quarter profit call with analysts on February 13.
Killam has 5,600 apartments in Halifax and more than 18,000 throughout Canada.
A key issue discussed in the gain call was a strong decrease in the late 2024 in Killam’s estimate of how much the highest market rentals are compared with its average rental, a financial metric called “Marca de Marca to the market.”
Killam, like other owners, tries to increase the rent of an apartment at the highest market rate when the new tenants move. In Nueva Scotia, the rental limit of the province only applies to lease renovations.
“It is a key key to its ability to increase income over time,” said Neil Lovitt, vice president of the real estate consulting company Turner Drake.
As the gap closes between Killam rentals and the market rate, there are fewer opportunities to increase rentals.
“The income of Killam’s apartments portfolio has space to move [upward]Probably in the 15 percent range, “Richardson said, referring to the company’s apartments in Canada.
In its end of the year report, the company said it is associated with non -profit organizations and governments to address the need for affordable homes.
The report points to market stabilization as a reason for the decrease in the propagation of Mark-To Market of Killam.
“We are reaching a point where … the growth in the market rentals has reached a roof,” Lovitt said, added that this is a broad pattern both in Halifax and throughout Canada.
Rentals in Nueva Scotia increased by 4.8 percent on average in December compared to the same month in 2023, according to Statistics Canada. That has significantly decreased from a maximum rental inflation rate of 14.6 percent in October 2023.
Even so, Killam estimates that market income in Halifax is approximately 25 percent higher than its average rental, the highest differential between the regions in which it has apartments, according to Killam’s Slide show show.
The financial director Dale Origworthy said that the company’s success in increasing rentals to the market rate is also part of the reason why his opportunity to do so has decreased.
“We have achieved some really strong rentals,” Orizworthy said during the earning call. “I would say … both markets [Halifax and Kitchener-Waterloo-Cambridge] They are enduring very well. “
