Killam reports ‘largest rental gains’ on new leases in company’s history in most recent update

Killam Apartment REIT, a Halifax-based landlord, recently reported the “largest rental gains” in the company’s history for new tenants moving into their apartments. According to their financial report for the quarter ending on Sept. 30, Killam owns 5,710 apartment units in Halifax and over 18,000 units across Canada.

During the company’s third-quarter earnings call on Nov. 7, Killam’s executive vice-president, Robert Richardson, highlighted that rental increases achieved with new leases were strongest in Halifax, Saint John, and Moncton. Excluding the effects of property acquisitions and sales, Killam reported an average monthly rent of $1,443 in Halifax as of Sept. 30, representing an annual increase of 8.4%, nearly double the increase reported last year.

Like other landlords, Killam adjusts rents to market rates when new tenants sign a lease, surpassing Nova Scotia’s five percent cap on lease renewals. Neil Lovitt, a vice-president at Turner Drake, a real estate consulting company, noted that Killam’s financial results reflect the ongoing trend in rental markets where housing supply is inadequate, allowing for-profit housing providers to raise rents to market prices.

For their entire portfolio of apartments across Canada, Killam increased rents by 20.4% for new tenants moving in between July and September. In Halifax, the increase was even higher. Richardson expressed confidence in the company’s ability to achieve rent increases that align with Nova Scotia’s rent cap on lease renewals, despite market changes such as lower inflation.

Catherine Leviten-Reid, an associate professor at Cape Breton University specializing in affordable rental housing, emphasized that Killam’s financial results underscore the need for public and non-market housing to maintain lower rental rates. Killam has previously stated its commitment to providing affordable housing in Halifax, acknowledging that the private market alone cannot address the housing crisis.

During the earnings call, Richardson mentioned that Killam is working to increase the supply of apartments with long-term affordability commitments through partnerships with the Canada Mortgage and Housing Corporation. CEO Philip Fraser added that the majority of the company’s upcoming developments will include an affordability component.

Despite the challenges in the rental market, Killam reported a 10% increase in net operating income for its Halifax apartments compared to the previous year. The company generated $49.96 million in revenue over the first nine months of the year. While the rental market in Halifax has remained relatively stable in 2024, Lovitt highlighted a significant increase in housing construction starts in the city as a potential indication of future changes.

In conclusion, Killam Apartment REIT’s record-breaking rental gains reflect the ongoing dynamics in the rental market, emphasizing the importance of affordable housing initiatives in addressing housing affordability challenges.