Q3 2021 Kennedy-Wilson Holdings Inc Earnings Call
We do have a number of risks uncertainties and other factors indicated in reports and filings with the Securities and Exchange Commission.
Now I'd like to turn the call over to our chairman and CEO Bill Mcmorrow.
Thanks, Kevin and good morning, everybody and thank you very much for joining the call today.
Very pleased with our strong third quarter results, which saw EBITDA adjusted EBITDA increase over 165% compared to Q3 of 2020.
And the record results, we have posted for the first nine months of the year.
Adjusted EBITDA totaled $741 million, thus far in 2021 compared to $261 million for the first nine months of 2020.
We've made tremendous progress this year on our two key initiatives growing our in place annual NOI and growing our fee bearing capital.
We had a very active quarter, completing $1 $8 billion of investment transactions, bringing our year to date total to $4 4 billion.
Our assets under management has grown by 17% in 2021% to a record $25 billion from $17 6 billion at the end of 2020.
We have a strong pipeline of new transactions that we expect to close by the end of the year, which would further increase our AUM and result in a record year of capital deployment for kw.
I'd like to start by providing some perspective on what we're seeing in our markets is real estate fundamentals continued to improve in the quarter.
Global transaction volumes remain healthy with Q through three volumes in the U S increasing 150% from last year's levels.
According to real capital analytics.
Institutional demand for real estate remains high with trillions of dollars of capital globally that continue to search for sound risk adjusted returns.
2021 operating metrics continue to improve for us and our U S market. We saw continued impressive apartment rent growth with rents increasing at one of the fastest rates in recent memory across all our regions.
Investor demand for high quality rental housing remain very strong and has resulted in cap rate compression and further increases to the value of our real estate portfolio.
Our mountain West apartment portfolio, which is our largest region with almost 11000 units outperformed once again.
Driven by very attractive migration trends and relative affordability.
We also saw significant improvements in our Pacific Northwest and California portfolio as pandemic related moratoriums began to burn off.
And we expect meaningful rent growth and all of these areas over the next 15 months.
In Europe, we saw outstanding performance in our U K and Dublin properties.
On June July 19th the UK removed, all COVID-19 restrictions and in Dublin, essentially all travel reopened on July 26.
And we saw gradual return to office that we expect will accelerate over the next six months and have a positive impact on our portfolio.
Strong leasing demand in our Dublin multifamily portfolio resulted in occupancy growing by over 400 basis points in Q3 to 96, 6% occupancy.
The key acquisitions in the quarter were three wholly owned multifamily assets totaling 879 units that we acquired for a total of $399 million.
Two of these assets are located in suburban Seattle and the third asset is located in suburban Denver.
We look forward to implementing our value add programs at these communities, which has consistently shown our ability to drive outsized returns.
Our multifamily portfolio globally grew to a record 33400 units at quarter end.
Including almost 5000 units under development, which we expect to complete at yields well above current market cap rates.
We're on track to increase our global unit count to 35000 by year round.
Mario will speak later on the impressive growth of our European logistics portfolio.
Our Q3 transactions grew estimated annual NOI to $413 million, an increase of $19 million in the year and we increased our fee bearing capital to $4 8 billion, representing a 23% growth year to date.
I'm also pleased to announce that yesterday, our board of directors authorized a 9% increase to our quarterly dividend, which now annualized as to <unk> 96 per share.
Looking ahead I believe the key drivers of our business will be or are well positioned with our multifamily portfolio.
The reopening of our European markets.
Growth of our investment management platform.
And the completion of our development projects.
Yeah.
Before we discuss these initiatives in more detail I'd like to pass the call over to our CFO, Justin and body to highlight our Q3 financial results.
Thanks, Bill in Q3, we had GAAP EPS of <unk> 47 per diluted share compared to a loss of 18.
In Q3 of last year.
Adjusted net income in the quarter grew to $112 million compared to $27 million last year and.
And adjusted EBITDA grew to $203 million in the quarter compared to $76 million in 2020 for the year. We've had GAAP EPS of $1 96 per share adjusted net income of $424 million and as Bill mentioned adjusted EBITDA of $741 million representing record results for.
For the first nine months of the year.
And our co investment portfolio, which includes our unconsolidated funds and joint ventures, we continued to see appreciating asset values driven by strong NOI growth and further cap rate compression.
This strong performance led to $79 million in gains and $46 million of accrued performance fees in the quarter for.
For the quarter, including promotes total adjusted fees were $56 million up from $8 million in Q3 of last year.
Turning to our balance sheet in August we issued $600 million of unsecured bonds maturing in 2030. The proceeds were used to fully pay off our line of credit as well as the remaining $296 million of our KWE bonds due in 2022, which was completed in October.
Significantly improved our maturity schedule with no unsecured debt maturities until 2025, and nothing outstanding on our $500 million revolving credit facility.
Our debt has a pro forma average interest rate of three 6% and a weighted average maturity of six five years, which has improved by two and a half years since the beginning of the year.
During the quarter, we bought back $25 million of stock at an average price of $21 55.
Since the beginning of 2018, we've now returned $750 million or approximately $5 40 per share to shareholders in the form of dividends or share repurchases, which includes repurchasing $15 7 million shares or approximately 10% of our outstanding share count.
We still have $213 million on our $500 million buyback authorization remaining a portion which was utilized in October.
And with that I'd.
Now I'd like to turn the call over to Matt Windisch to discuss our multifamily portfolio. Thanks, Justin our global multifamily portfolio continues to outperform due to our market selection and our hands on asset management style.
Our assets are experiencing improving market conditions, lower delinquencies and increasing rents.
Positive migration trends and affordability continued to create outsized demand in particular for our mountains mountain West portfolio.
Which saw same property revenues grow by 11% and NOI grow by 15%.
We think it remains strong upside in our mountain west portfolio.
Our average rents are $1366 per month, and as people continue to seek a higher quality of life and migrate out of higher rent higher tax states.
We are also starting to see improving trends from our Pacific Northwest and our California assets.
Offices began to reopen which has been a positive for renter demand rent concessions in the U S were down 63% in Q3 compared to Q3 of 2020.
And we saw leasing spreads averaged a record 27% on new leases across our U S portfolio.
We also continue to work with our tenants and take advantage of the rent relief measures that are available.
The combination of these factors resulted in robust same store revenue growth across our U S market rate multi.
Multifamily portfolio at 8% and NOI growth of 12% versus Q3 of 2020.
This represents our best quarter of NOI growth in the last five years sequentially from Q2 of this year revenues grew by an impressive 6% and NOI by 8%.
In place rents in our U S portfolio on a 6% above pre pandemic levels.
And with an average loss to lease of 15%. We believe our portfolio is set up for strong growth in 2022 and beyond.
Similarly at our Dublin apartment portfolio.
We continue to see strong demand as people began returning to the city.
This led to <unk> being stabilized in Q2.
And currently capital Dock is 77% leased and on track to be stabilized in Q4.
Overall occupancy is now returning to pre pandemic levels in Dublin.
In addition to the Mega cap Tech companies that have been large employers in Dublin for many years other.
Other high growth Tech companies are looking to expand their presence in Dublin, such as strike Tictoc service now and first data.
We continue to believe in the long term prospects of the Irish apartment market.
Driven by a young and growing population. Additionally, there are a large number of multinational companies with their European headquarters in Dublin.
With a workforce that is more likely to rent and buy.
Now I'd like to turn the call over to our President Mary Ricks to discuss our office portfolio and our investment management business.
Great. Thanks, Matt.
Turning to our office portfolio as tenants began to return to the workplace, we are seeing improvement in the operational environment, including a growing number of firm requirements.
First for tourists and deals being executed.
Quality in both design and construction and staff wellness continues to be an important factor as tenants are drawn towards amenity rich building with ESG credentials.
Hey, medically we continue to focus on office tenants and high growth and essential business sectors, including life Sciences media and technology.
When you include our suburban apartment and growing logistics assets. We believe this thematic approach positions, our overall portfolio well for future cycles.
A great. Recent example is that one of our largest office assets 111, Buckingham Palace Road in London, whereby October we transacted on approximately 100000 square feet at lease transactions, including.
Including 20000 square feet under offer which in total represent 45% of the building.
These transactions alone prove the occupancy significantly from 80% to 100% and Q4.
<unk> delivered 26% growth above in place rents and 40% of the income at pre Covid top brand and.
In excess of 70 pounds per square foot.
Compared to 15% in Q3 of 2020.
Major tech firms represented 80% of the new leases illustrating the top tenants are active in the market and willing to make decisions for the REIT space.
71% of our office NOI from our European portfolio, which saw Q3 same property revenue growth by 4% and NOI grow by 5%.
These results were driven by strong rent collections, lower bad debt and the burn off of free rent in the quarter.
With an even larger focus on employee retention large corporate tenants are taking advantage of the benefits of modern low rise suburban offices, such as affordability shorter commute times and outdoor amenities.
We continue to see this play out in our own portfolio with approximately 90% of the NOI from low and mid rise property.
We completed 585000 square feet of leasing in the quarter.
Our year to date total to $1 5 million square feet with the walls of seven six years.
Our leasing pipeline remains strong with 152000 square feet of leasing completed thus far in Q4 and.
And another 600000 square feet in Legals.
Actively working on closing out giving us good momentum heading into next year.
Turning to our investment management platform, we've continued to see strong growth in the quarter with our fee bearing capital trying to $4 8 million.
This has now increased over 160% since the beginning of 2018.
Our fast growing global credit platform continued to lead the charge in Q3.
In July we announced a new 500 million pound commitment focus on European loans, bringing total global commitment to $3 billion.
In Q3, we completed $440 million of loan investments Inc.
<unk>, our first loans in Europe.
On a few large industrial portfolios.
Our debt platform grew by 24% to $1 4 billion in loans outstanding with $140 million and future unfunded commitments.
We've been able to attract institutional quality borrowers with high quality assets to our GAAP platform with an average loan size of $70 million and weighted average maturity of four years.
We continue to see a strong macroeconomic environment and the European logistics sector.
Occupational demand has driven vacancy to an all time low in the U K of three 4%.
And yields continue to compress across Europe due to accelerating rent growth.
Our thesis from the start when we launched this platform was the last mile logistic properties in close proximity to transit centers would have strong demand as they allow for companies to get their products to the end customer in an efficient manner manner.
Covid has accelerated this thesis as online sales penetration continues to grow.
Online sales, making up 28% of total retail sales in the U K.
Our industrial portfolio has grown rapidly and including assets under offer our portfolio has a gross value of approximately $1 $1 billion today across 59 assets with kw share at approximately 20%.
We look forward to further growing both our debt platform and our logistics platform in the fourth quarter and continued expansion of our investment management business, which has in total $2 $1 billion in future commitments from our various strategic partners.
Another important area of growth for <unk> will be the completion of our development and lease up projects, where we continued to make progress throughout the pandemic.
Our developments totaling $2 7 billion at cost.
Being delivered with strong sustainability credentials with environmental improvements and tenant wellness at the center of our focus.
Once these assets are completed and stabilized we expect an incremental $105 million of estimated annual NOI to kw.
This represents an initial yield on cost of approximately 6%.
We are nearing completion of two office properties in the heart of Dublin, Hanover Key and Kildare Street.
Which totaled 134000 square feet that are expected to complete in Q4 and Q1, respectively.
We remain on track to complete the majority of our construction projects and 2023 and 2024 on time and on budget.
Last month, we announced a new project that we are extremely excited about and a public private partnership with Cal State Channel Islands.
We're going to develop 589 residential units as part of a master planned community in Camarillo, California.
That project will have 310 wholly owned market rate units 170, affordable units built through our vintage housing joint venture and 109 for sale Townhomes sold by Comstock counts.
This development sits adjacent to a 386 unit wholly owned community, which we acquired in 2016 a.
A project of this nature was a natural fit for kw, given our broad multifamily expertise in developing both market rate and affordable units. We are aiming to complete construction in 2024 and look forward to breaking ground and Camry out later this month with that I'd like to pass it back to Bill.
Thanks Mary.
As you can see that we have a combination of ways to further drive earnings and cash flow growth that Kennedy Wilson.
As I mentioned on the last call, we have a clear path to grow our stabilized NOI of the rate of 10% to 15% a year over the next three years.
Driven by strong organic NOI growth, new acquisitions, and the completion of our construction.
We also plan to grow our fee bearing capital and resulting fees by 15% to 20% per year over the next three years.
The combination of these factors should lead to significant growth in both our net asset value per share and our assets under management.
As we look ahead to 2022 I'm very optimistic in our ability to continue expanding our business for a number of reasons.
First business conditions have rebounded as economies reopen and we have a very healthy transaction and financing market, perhaps the strongest we've seen in the last decade.
Second over the last 18 months, we either grew or establish new investment platforms with well capitalized extremely liquid.
Global strategic partners, who have a keen desire to expand their relationship with Kennedy Wilson.
We can now creatively allocate capital across the entire capital structure and in a wide range of asset classes.
Finally, our global investment team remains intact, and our global communication has never been better.
I'm very pleased with the progress our team has made not only in Q3, but over the course of 2021.
I am also reminded of the importance of long term relationships, both internally and externally to kw.
Although on bias, we have an exceptional global team that has been working together for decades, and our internal communication as I mentioned is the is the best it's ever been.
This fact, combined with very high quality properties and the right product category located in diversified and growing markets is setup kw for excellent long term growth.
I'd like to thank our tremendous kw team our shareholders our board and our partners for their continued support of Kennedy Wilson.
And with that Devin I'd like to open it up to any questions.
Yes.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
You are using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
The first question will be from Anthony <unk> of Jpmorgan. Please go ahead.
Great. Thank you my first.
<unk> for Bill I mean, given you've got a deep level of experience doing this for a long time, how are you thinking about inflation or what does that kind of.
I suggest you do from a real estate point of view strategy geography property type et cetera.
Yes.
Well I think there's many facets to that Tony them and as you heard from that and marry that.
<unk>.
Growth in our <unk>.
Top line.
Rents is really increasing at a very rapid pace way far ahead of inflation rates.
And.
I think about it in terms of our own.
Exposure and really when you think about it really primarily relates to what we'd be doing in the construction and development area.
And you know when we started really building seven or eight years ago.
We made a decision that the vast majority of our projects were going to be handled through what we call GMP contracts, which is it's a fixed price contract that you do with the general contractors.
And so I would say into the 90% range everything that we're doing.
Has got a guaranteed Max price audits.
And.
I think also we've demonstrated over a very long period of time.
Between our two construction teams in the U S and in Ireland, which now total probably close to 35 people.
We have the capacity to bring things in on time and on budget.
So I'm not really concerned about inflation as it relates to kw.
And then the only other question that really comes up in this whole discussion is what's happening in the supply chain issue in terms of really getting materials.
Not only to the construction projects, but too.
Yeah.
Two the Capex that we're doing on properties that were just doing value add to.
And we really are.
I haven't seen any impact in terms of our ability to get there.
Raw materials lumber steel.
Furniture or whatever it is that we need at the properties, we've got very little impact.
We not that it's any bellwether here, but we see the supply chain issue as it relates to <unk>.
Cargo moving at all about.
It's really a temporary kind of situation.
We happen to sit here at least in Los Angeles, and one of the largest ports in the United States.
And really the issue is not whether things are getting shipped it's just getting them off the ships in truck.
And so.
I think we will see that you know the trucking companies figure it all out they'll hire more people they will deploy there.
Trucks.
I think by certainly the middle of next year of this whole discussion.
I think be less relevant.
So that's kind of how we're looking at everything.
Okay got it. Thank you and then just my other question is.
You know in the past you've you've got experience in lodging and other property types outside of multifamily and office are you spending more time in any other areas just given liquidity out there in need to go find returns in other places.
Well I think that really when you think about it are clearly the multifamily is the biggest part of our business today.
That's one that we have.
Really want to continue to grow we think that's really the best real estate asset class.
We also very much as Mary pointed out like the industrial space. So both here and in Europe.
Particularly in the United Kingdom and Ireland.
Spain to a secondary degree we want to see that business grow.
The.
Office business here in the United States, just its not has nothing to do with occupancy, but because of the lease terms here.
Generally are in the three to five year.
Range.
<unk>.
Don't present as attractive an option for us in terms of our capital.
Because we like to get cash flow out of our properties every month.
Where we do find it attractive though was actually in the markets that we're in in Europe, particularly the United Kingdom.
Because the lease terms that are can be 10 15 in some cases 20 years.
So you've got income certainty for long periods of time, which also means you are not putting additional capital into those buildings every three or four years.
So we're very very focused on really.
Kind of those three.
Asset classes.
Great. Thank you.
The next question comes from Derek Johnston with Deutsche Bank. Please go ahead.
Hi, everybody good morning.
Just wanted to focus on.
Multifamily and value add how substantial today does remain the value add opportunity in the multifamily book I do believe some projects were slowed or may be halted during the pandemic wondering if they've been reignited and where youre focusing your value add spend.
Clearly the IRR is a pretty solid use of capital given today's compressed cap rates.
So just if any elaboration there would be helpful. Thanks.
Yes, Eric Thank you it's good good points.
Just to be clear, we've made a very very conscious decision in March of 2020 that we were not going to stop any construction or capital spending.
On our development projects unless were mandated by the local jurisdiction. The government entities that were in that particular geographic area. So we were able to hold true to that so we pushed through all of our construction and really the only only place where we saw.
Yeah.
I would say modest time delays was was in Ireland, where they shut down construction sites for a couple of months, but everywhere else that we operated.
Didn't have any slowdowns at all and so you know I've learned over time. The results of that is that then you're finishing brand new properties at a time, where in some cases people other people might have stopped their capital spending given the uncertainty that existed in 2020. So.
We're fortunate now.
You know I think Mary pointed out are Matt pointed out.
We are continuing now to roll off.
New finished properties.
We just finished a big property up in Boise now that's running at full occupancy.
We're finishing too.
Really first class office buildings in Ireland, we've got great leasing interest in.
And so the key in our business as long as you can as really to not stop.
Lessors, some external reason to stop.
But I'm going to ask Matt to amplify and the other part of your question. Thanks, Bill Yeah, So I'd say across the U S market rate multifamily portfolio.
Roughly 40% of the units that we have not renovated yet so theres significant upside to doing the renovations and when you look at the return on cost on those they can range from 15% to 25% when we're putting capital into these units.
I'd say additionally.
We certainly in the mountain West continue doing renovations throughout the pandemic, we were slower in California, and the Pacific Northwest just given that rents were kind of flat and so we are now re implementing some of those value add initiatives.
So we've got a combination of a 15% loss to lease and then 40% of the portfolio that we can invest capital into the units. So we think.
There's some good runway here to grow rents over the next couple of years in that portfolio.
Okay great.
Both comments very helpful. The the loan book was also pretty active in <unk> with over $400 million could you go into some detail on the type of loans, you're seeing and what you're interested in funding.
Yeah, I'm going to start and then turn it over to Matt Derek but I think the key there is that.
It's Ben.
Really interesting and I really think over time this will become probably the largest part of our fee bearing capital wall business, but where we.
We're transacting in many cases with people that we've known for years decades in some cases.
And so no.
And then the other part of it is that since we're active on the equity investing side and we're also active on the construction side, we know cost we know values and we know costs.
And Matt and his team are also able to leverage the other parts of our company that.
For example, our multifamily group, where he has done a he's done a number of loans to multifamily.
Developers.
Not construction loans, but transition type of loans and so we're able to leverage all parts of our platform.
And I would say the other great thing about the debt business as it gives us.
You know a great information flow in terms of what's going on in various markets and I've always felt that even though yes. We are in the real estate business more than anything we're in the information business.
Knowing values and what's going on in a variety of markets. So it's been a really from a standing start in may of 2020, it's Ben.
Quite remarkable to see the growth, but Matt you want to give some more.
Just.
Starter I'd tell you that we're really focused on institutional quality sponsors very high quality assets that fit within the geographies, we already owned and operated properties then.
That gives us a competitive advantage and our average loan size is $70 million. So we're doing.
Relatively large loans.
For the quarter to give you a sense we did.
One loan that was secured by a hotel one loan secured by a multifamily property one loan secured by an office building.
And then we did a few loans secured by industrial.
So it's across the gamut.
Our product types, but if you look through the entire portfolio. It's still a majority of multifamily and office just like our equity portfolio.
But we do have the flexibility to invest lower down in the capital stack for hospitality and retail where to date over the past few years, we've not been investing in the equity we are still investing in the debt and those product types.
Good stuff thanks, guys.
Once again, if you have a question. Please press Star then one.
The next question will come from Sheila Mcgrath of Evercore ISI.
I guess good morning.
Kelly your advantage in.
Investing in the mountain states.
While ago was that there wasn't much institutional investor competition.
Just wondering if that's still the case and maybe you could describe the competitive landscape.
In mountain States versus Pacific Northwest in other markets.
Ill.
Well, thanks, Sheila yes, it takes a long time to get yourself established in any new markets we restarted.
Probably 16 or 17 years ago.
We made a conscious decision and it had nothing to do with.
What was going on.
In any way in California, but we wanted to diversify our income streams into other western geographies and so.
Between Seattle, and Salt Lake City, and Boise, Idaho in Albuquerque, in Denver, and Colorado Springs, and so on.
We've got a really really great footprint in these.
Yeah.
Other markets in some cases smaller markets.
And so.
It's not easy it takes time.
And so were the probably the largest multifamily owner now in Boise, Idaho, and I don't have any statistics on the greater Seattle market, but we'd be in the top five I'm sure if not the top two or three.
So it takes time and I think.
Two generally speaking although this is a big generalization the institutional.
Deploys of capital you know the big cut.
Companies don't go into these smaller markets.
So it's competitive it's never not been competitive.
You know over my three decades here, it's always competitive but I think we have a very big advantage in these smaller markets because we've got.
As they say boots on the ground and we've got assets in these markets.
And you know the other thing that I can't stress enough time Sheila is the.
If you look at the people that run our multifamily business they've been doing it here at kw for 17 years.
And so that is that that really has been over the last couple of years as we all dealt with.
You know all kinds of different issues related to this pandemic.
They are real.
Great strength that we've had has been the fact that our teams have been together for all of these periods of time.
So.
I mean, yes, there's always competition, but I really feel like the relationships and that was kind of what I was alluding to when I talked about the relationship both internally and externally.
I think we're viewed as a very very good counterparty in every market that we're in.
Because we always do what we say we're going to do.
And so.
I'd like to thank them for all of those reasons, we have a competitive advantage.
Okay. That's helpful and then on stock buyback just.
Curious your thoughts with acquisition cap rates compressing meaningfully.
Particularly in multifamily does that make stock back buyback more of a priority just your thoughts there.
No.
Well I think the stock buybacks like any company is always it's always been a capital allocation decision.
And we've got you know.
Like any growing business.
We are you've got to make capital allocation decisions, whether it's to new acquisitions, whether it's to your development pipeline.
And so.
Way, we look at it as just part of the whole menu.
We still believe that the stock price is a very attractive price and I think particularly with the dividend increase that we did.
You know we feel that the.
Overall total yield opportunity in our stock is really good.
And as we said on the call even though it was past the quarter in October we continued.
To deploy capital into the stock buyback.
And.
You know as if its well known I've been personally, but a buyer of our stock over the last.
Nine to 12 months so.
I think that kind of tells you how I feel about where the values are.
Okay.
Okay, Great and then on <unk>.
Affordable housing there are some programs in D C.
<unk> are under discussion allocating more capital to affordable housing.
One wanted your thoughts on do you think that's another avenue of growth for kw, and maybe you could comment on that new acquisition.
In southern California, because that seem to have a portable and markedly.
<unk>.
Right.
Yeah Sheila.
Yes, we're well aware of the legislation in Washington that will impact kind of the amount of bond cap available for affordable housing.
I'd say in a number of our markets we continue to have.
Availability, but there are certain markets, where the bond cap is getting smaller and smaller so it is making it more challenging to invest.
And in certain markets right now so certainly that will that will be a huge help to the affordable housing business, which.
Clearly, there's a huge need for affordable housing across the U S and.
Particularly in our markets, we certainly have other ways to deploy capital into affordable housing without the bond allocation.
But it certainly does help so.
It is something we're closely monitoring and we're hopeful that we.
We get a good result, there and then with regards to the project in Southern California.
Yes.
It's a project we have.
One the adjacent property for five years now and we've been working on this.
Land acquisition for several years and so it's a unique to be able to have the ability to build both market rate housing and have the affordable housing capability with our partner to be able to deliver really all of these units in house.
Okay. Thank you.
The next question is from Jamie Feldman with Bank of America Merrill Lynch.
Great. Thank you.
As you take a step back and think about all the growth you've had over the last couple of years in terms of both partners in and product type.
What do you think is still missing from the platform at this point.
Well.
Yeah.
Yeah.
I would say that the main focus.
I think we're in all the right businesses now and now it's just the ability to continue to grow those businesses and so that all relates to your team and the people you have.
And so.
We've had really great success on the people front so in terms of new hires over the last.
12 to 20 months I would say Kennedy Wilson, our real estate World is a very desirable place to work.
So we're attracting really high quality.
Young or people into our business.
And of course, we have the one I would say senior addition to our team and Gary Palmer here.
This year.
So we're in all the right markets and all of the right businesses and so now you just have to make sure that you.
<unk> got the right team.
Our in place to support that growth.
Okay. That's helpful and then.
You announced a nice dividend increase can you just talk about how you think about.
Whether it's a.
It's there.
Or assets or just kind of NOI from the platform and how do you how can we tie kind of growth in the business to growth.
The dividend going forward.
You mean.
Like as a policy I'm not sure I follow your question just to understand how you think about the I guess number one is what drove the dividend increase.
You don't have a required payout under your structure.
So is there a good way to think about.
How you is that you and your board think about when to grow the dividend.
The key driver as well I would say, we don't have any formal policy in terms of some percentage or a yield that we're trying to hit and so it all but I think as Justin pointed out we've done for a company our size we have been.
Very conscious of returning capital to our shareholders and so the dividend increases are all really relate to how we view future cash flows and so.
I think it was.
And we've had great success this year, reducing our unsecured debt costs.
And so you know.
We look at kind of net cash flows.
The natural result out of all of this is that our assets under management are going to grow significantly over the next three to five years. When you talk about the NOI and you talk about the fee bearing capital.
Assets under management, and we're going to come right along with that.
And so I think in nine months to 17% growth off of a reasonably big number that's really good.
And we're going to continue to evaluate the dividend over time.
But as I said, it really relates to.
Our.
Very optimistic outlook about future cash flows that's why we did the dividend increase.
Okay. Thanks for your thoughts.
Okay.
And this concludes our question and answer session I would now like to turn the conference back over to Bill Mcmorrow for any closing remarks.
Well as I said in my closing remarks, I really appreciate everybody's interest in the company and as I always say any of the four of US that were on the call today are always available to answer any questions that come up.
Post this call. So thank you again and have a great day.
Thank you. The conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines have a great day.
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