Q1 2025 Killam Apartment REIT Earnings Call
Speaker Change: Good morning, ladies and gentlemen, and welcome to the Killam Apartment Real Estate Investment Trust First Quarter 2025 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session.
Speaker Change: I said any time during this call you require assistance, please press star zero for the operator. This call is being recorded on May 8, 2025. I would now like to turn the conference over to Mr. Philip Fraser, President and CEO . Please go ahead.
Speaker Change: Thank you. Good morning and thank you for joining Killam Apartment Reef's first quarter 2025 conference call. I am here today with Robert Richardson, Executive Vice President, Dale Noseworthy, Chief Financial Officer, and Erin Cleveland, Senior Vice President of Finance.
Speaker Change: Slides to a company today's call are available on the Investor Relations section of our website under events and presentations.
I will now ask Erin to read her cautionary statement.
Erin Cleveland: Thank you, Philip. This presentation may contain forward-looking statements with respect to Killam Apartment REIT and its operations, strategies, financial performance conditions or otherwise. The actual results and performance of Killam discussed here today could differ materially from those expressed to implied by such statements.
Erin Cleveland: Such statements involve numerous inherent risks and uncertainties, and although Killam Management believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results level the activity performance or achievements will occur as anticipated.
Erin Cleveland: For further information about the inherent risks and uncertainties in respect to forward-looking statement, please refer to Killam's most recent annual information form and other security's regulatory files found online on Cedar.
Erin Cleveland: All horror-looking statements made today speak only as of the date, which this presentation refers, and Killam does not intend to update or revive any such statements, unless otherwise required by applicable securities laws. Thank you, Aaron. We are very pleased with our strong financial and operating results for the first quarter of 2025.
Erin Cleveland: Killam Delivered FFO of $0.28 per unit in the quarter, a 7.7% increase from $0.26 per unit in Q1 2024.
Erin Cleveland: We achieve 7.8% same-property NOI growth across the portfolio, which included 8% same-property NOI growth in our apartment portfolio.
Erin Cleveland: 7.5 same property in a live growth in our manufacturing home community portfolio and 4.2% same property in a live growth for our commercial properties.
Erin Cleveland: The multi-family fundamentals in Canada are still very strong, and our same property of permanent hypocrisy at the end of the quarter was 97.5%.
Erin Cleveland: The same as Q1 2024. We have completed the first quarter with meaningful progress towards our strategic targets listed on slide three. And we are on track to meet these targets by the end of the year.
Erin Cleveland: We remain very optimistic about the future of the Canadian rental market and will continue to focus on growing our earnings, cash flow, and the underlying value of our assets.
Speaker Change: Dale will take us through our financial results, followed by Robert, who will discuss spring, lease-up trends and our ability to produce top-line growth.
Speaker Change: I will conclude with an update on our current developments and our capital allocation strategy. I will now hand it over to Dale.
Dale Noseworthy: Thanks Phil. Key highlights of Killam's Q1 financial performance can be found on slide 4. Killam earned net income of $102 million, which includes $70 million in fair value gains driven by robust, same property and a wide growth across our portfolio.
Dale Noseworthy: We are pleased with our 7.7% increase in FFO per unit growth in Q1, generating 28 cents per unit compared to 26 cents in Q1 last year.
Dale Noseworthy: Our three most recently completed developments contribute meaningfully, adding 1.5 million in FFO growth compared to Q1 2024. Adjusted funds from operations also increased, up 9.5%.
Dale Noseworthy: The growth in AFFO is a function of our strong same-property performance and is further enhanced by our Capital Recycling Program, which focuses on selling older capital intensive assets.
Dale Noseworthy: Our 7.8% same property performance in Q1 was driven by 6.6% revenue growth and 4.6% expense growth. Killam's same property operating margin was also up by 70 basis points.
Dale Noseworthy: With this strong start to the year, our same property NOI target for the year remains intact. We expect to end the year in the middle to upper end of our same property NOI target of 4-7%.
Dale Noseworthy: As shown on slide 5, Q1 delivered 15% rental increases on unit turns. Combined with units that renewed in Q1, we achieved a 5.1% weighted average combined increase in apartment rental rates in the quarter.
Dale Noseworthy: The step down in the weighted average rental rate change from 7.9% in Q4 2024 was anticipated based on Q1 and January in particular having the highest number of renewals during the year and a recognition that market rents are off their highs from mid-year last year.
Dale Noseworthy: Our achieved average rental increase on unit turns of 15% was in line with the current mark to market of our portfolio.
Dale Noseworthy: Slide 6 highlights the variability of mark-to-market spreads between regions, with Halifax and Kitchener Waterloo Cambridge maintaining the greatest opportunity on turnover of approximately 25%.
Dale Noseworthy: While we are confident in this figure, it's important to note that this spread will be captured over time based on the length of tenure from the units turning and the markets in which the units turn.
Dale Noseworthy: Slide 7 highlights Q1 expense growth by category. Total expense growth across the same property portfolio was 4.6 percent, with general operating expenses up only 2.1 percent.
Dale Noseworthy: Property taxes increase 4.8% due to higher assessments across the portfolio.
Dale Noseworthy: Utility and fuel expenses were up 7.9 percent due to higher natural gas pricing and higher consumption through the colder winter heating season compared to the mild winter experience in 2024.
Dale Noseworthy: We do not expect the same level of energy expense pressure during the remainder of 2025. The recent removal of carbon tax is estimated to provide annualized savings of approximately $2.5 million.
Dale Noseworthy: We expect to see approximately half of this carbon tax removal savings realized over the remainder of 2025 with the other half realized in early 26.
Dale Noseworthy: We're pleased with our strong balance sheet positioning with our debt to total assets ratio down to 39.9%. This marks the first quarter in Killam's operating history that this ratio reached below 40%.
Dale Noseworthy: We also reduced our debt to normalized EBITDAH to 9.66 times at the end of the first quarter and improved our interest coverage and debt service coverage ratios compared to Q4, 2024.
Dale Noseworthy: Slide 9 includes average apartment mortgage rates by year versus prevailing CMHC-insured mortgage rates. In Q1, Killam Refinance, 51 million of maturing mortgages with approximately 97.1 million of new debt at a weighted average interest rate of 3.67%.
Dale Noseworthy: We have $253 million in apartment mortgage refinancing during the remainder of the year at a weighted average interest rate of 2.03%
Dale Noseworthy: The longer-term outlook for mortgage maturities are favorable. Based on current market rates, Killam anticipates refinancing at close to its current weighted average rate in 2026 and below the average interest rate for maturities in 2027 to 2029.
Dale Noseworthy: As part of our debt management strategy, we are also leveraging CMHC programs as mortgages come do with a focus on increasing our CMHC-insured coverage.
Dale Noseworthy: which is now at 83.4% for our carbon portfolio up from 79% this time last year.
Dale Noseworthy: I will now turn the call over to Robert, who will discuss our operating results in more detail. Thank you, Dale, and good morning, everyone. Although new apartment supply is evident in Killam's markets, its impacts have been nominal.
Robert Richardson: We are very pleased with Killam's Q1 2025 leasing of rental growth results that generated a 15% weighted of average rental increase on unit turns. We are very pleased with Killam's Q1 2025 leasing of rental increase on unit turns.
Robert Richardson: As well, Killam is continuing to achieve strong leasing results with its spring 2025 leasing program. Our ability to achieve these spreads on new leases speaks to Killam's well-positioned rental rate diversified portfolio.
Robert Richardson: Further, Killam's Dynamic Operating Platform drives pricing decisions based on up-to-date market information, keeping us informed so we may quickly move rental rates to address market changes.
Robert Richardson: The graph shown on slide 10 illustrates Killam's apartment portfolio's rental buckets and highlights the rental options for tenants for a range of price points.
Robert Richardson: 17% of Killam's portfolio has asking rents over $2,000 per month, which may experience a limited competition from newly constructed buildings that the man rents between $2,000 and $2,500 per month to make their economics work
Robert Richardson: Killam is confident it can retain its market share because our Swedes have an established 10-a-base excellent locations and modern and amenity offerings.
Robert Richardson: Like Killam's decision to operate in seven provinces, our portfolio's further diversification based on rental rates is defensive and creates inherent opportunities for growth with lower risk.
Robert Richardson: Killam Calgley's its average market market opportunity for Department Portfolio to be approximately 15% providing ample opportunity for additional rental growth across the portfolio.
Robert Richardson: For Q1 2025, the market's driving, Killam's strong rental growth include Halifax, Moutain, Frederickine, and Listenland.
Robert Richardson: We are skimming the resiliency of the Atlantic Canadian rental market. We are confident these cities will perform in 2025. In addition to strong rental growth and market market opportunities,
Robert Richardson: as shown on slide 11. Occupancy levels and NOI growth in the region are above Portfolio Averages.
Robert Richardson: 512 details of variability in the tenured land of tenants who moved out in Killam's markets for the first four months in 2025
Robert Richardson: To date, in 2025, Alberta, BC, and Ontario are experiencing the highest proportion of turns from units having tenancy of only one year, and are delivering lower N.O.I. gross.
Robert Richardson: Interestingly, the average increase in net operating income for New Brunswick is 12.44%, so this place of 50% of New Brunswick's turnover is from tenancies of only one year, demonstrating the strength of the market rents in this province.
Robert Richardson: More broadly, Killam's portfolio turnover is increasing modestly. With turnover trending higher year-to-date in 2025 by 100 basis points to 19% turnover from 18% last year.
Speaker Change: Using data analytics, we can see the average increase achieved on new leases based on the tenure length of the vacating tenants.
Speaker Change: No surprise here, a longer attendance tenure to hire the increase in rent for the incoming tenant.
Speaker Change: As shown on slide 14, we are slightly behind last year's record-breaking numbers. Our rental increases year-to-date are in line with or slightly above to five-year average across all 10-year terms.
Speaker Change: We are seeing leasing activity returned to pre-pandemic norms with asking rents beginning to stabilize, as illustrated by the Blue VAR for 2025, the year-to-date highlighted with the circle.
Speaker Change: and Summary, this battery enforces our ability to achieve our target of 5% to 6% revenue growth in 2025 and will now hand you back to Philip to provide an update on our development and disposition activity.
Thank you, Robert.
Philip Fraser: Subsequent to the end of the first quarter, Killam sold four properties in infant land. On May 2nd, we completed the disposition of a manufactured home community in Gander and one-in-corner broke for a total sale price of 4.8 million and net proceeds of 2.9 million.
Philip Fraser: On native theft, we completed the disposition of two apartment buildings in Grand Falls, Newfoundland, totaling 148 units for 13.7 million with net proceeds of 11.5 million.
Philip Fraser: We have three properties under a firm agreement to sell in PEI, containing 127 units for 15.7 million with expected net proceeds of approximately 9 million.
Philip Fraser: This transaction is expected to close by the end of May.
Philip Fraser: In addition, we have four separate conditional agreements to sell an additional 725 units in PEI in New Brunswick for approximately $129 million, which are expected to close honor before the end of August 2025.
Philip Fraser: We invested $530,000 in our PV solar initiative in Q1 2025 and planned to spend approximately $3,000,000 more by the end of the year on 11 additional PV solar installs throughout our portfolio.
Philip Fraser: Our PV solar program is a key cornerstone of our ESG commitment. By continuing to invest in our electrical power production, we are reducing our carbon footprint and operating cost.
Philip Fraser: Building new apartment buildings in our core markets is an important component of Killam's capital allocation strategy. The carrot, as shown on slide 17, is expected to open on June 1st, with the first 11 tenants moving in.
We have strong pre-leasing with 26% of the building pre-least [inaudible]
Philip Fraser: The carrot will be the Killam's first all electric heating and cooling system building.
Philip Fraser: The domestic hog water will be preheated using an air-to-water cheap pump.
Philip Fraser: The remainder of the hot water heating will utilize electricity, so the building will not require natural gas for day-to-day operations, thus mitigating the impact of carbon pricing and potential fuel taxes.
Philip Fraser: Other green features include the energy-efficient envelope, electric vehicle charging, low sea finishes, LED lighting, and low-flow fixtures and full submetering to encourage conservation.
Philip Fraser: As shown on slide 18, Disruption continues at Eventite, our 55-unit building off-Spring Garden Road in Halifax. Completion is expected by Q3, 2020, 6 and pre-leasing will start in October .
Philip Fraser: Slide 19 shows progress to date of the Brightwood, heart 128-unitwood frame building at 150 Whistler located in Waterloo. Completion is scheduled for June 2026 and pre-lacing will also start in October .
Philip Fraser: In health acts, we are working on a 95-unit development at Victoria Gardens and a 150-unit development at our Huntington Crescent Community.
Philip Fraser: We hope to start at least one of the above mentioned developments by the end of the year and access the existing ACLP financing program from CMAC, which reduces overall development risk by providing below market interest rate construction debt.
Philip Fraser: On the acquisition front, we are actively looking at touring properties in Western Canada and Ontario, plus looking at a couple of our landing Canada markets for new acquisitions.
Philip Fraser: As Reel Can reported on Tuesday, we have entered into a conditional agreement to purchase their 50% interest.
Energy Department located in Ottawa.
Philip Fraser: <unk> committed to investing in high quality assets and developments executing our overall strategy and creating value for all of our unit holders.
Philip Fraser: We'd like to thank our employees for their hard work and dedication. Thank you.
Speaker Change: I will now open up the call for questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session. If you have a question. Please press star followed by one on your Touchtone phone and you'll hear a prompt that your hand has been raised which declined from the polling process. Please press star followed by Xu and Mr.
Speaker Change: We are using a speaker phone please lift your handset before pressing any keys one moment for your first question.
Speaker Change: Okay.
Speaker Change: Your first question comes from Mike <unk> with BMO capital markets. Please go ahead.
Speaker Change: Hello, Mr. Makita, Sir are you there.
Speaker Change: You may be on mute.
Speaker Change: I was on mute sorry about that good morning. Thank you.
Speaker Change: <unk>.
Speaker Change: Just first on the same property guidance I know, it's early in the year and you'd probably being a little bit conservative just given that we still got three quarters to go but I think if I remember correctly Q1 was sort of the worry.
Speaker Change: In terms of where utility expenses would go and now we have.
Speaker Change: Certainty on where that came out of it and we've got the carbon tax so I'm just wondering.
Speaker Change: We're looking at where you guys came in on Opex This year and looking at what you're still expecting what are the other opex pressures that might still be there in the portfolio because I think on a blended basis you were below your opex expectations for the year and we know what's going on with carbon taxes, sorry long winded question, but.
Speaker Change: Hopefully that's clear.
Speaker Change: Yeah, I think property tax is still the one that you know where we won't have final numbers on what those will actually be until the end of Q2 likely for the whole portfolio. So.
Speaker Change: We are expecting it to come in around six and unfortunately, a lot of what we've seen is supporting those numbers, though I would say that that is one that continues to be out there as an uncertainty.
Speaker Change: We will have more color.
Speaker Change: But you're right we were.
Speaker Change: We were going to have some higher utility costs in Q1, but they are they actually came in a little bit less than we had expected.
Speaker Change: So so that there are some positives on that front.
Speaker Change: Slowly.
Speaker Change: Okay is the property tax is it.
Speaker Change: Specific to a specific region or regions or is it broad based with 6%.
Speaker Change: It's quite broad based.
Speaker Change: Yeah.
Speaker Change: I'd say you know Halifax is one that you know of that of course for US is an important one in terms of what our average is in that one has come in and around that range.
Speaker Change: Okay.
Speaker Change: It sounds like you guys are.
Speaker Change: Pretty well I mean, you pretty much got the agreements.
Speaker Change: Traditionally in place to hit your your disposition targets. So congrats on that.
Speaker Change:
Speaker Change: You haven't had a chance to make an estimation, but how should we be thinking about the purchase price of the remaining 50% interest relative to the volume of dispositions that you expect to close this year.
Mike: Hi, Mike It's Phil.
Speaker Change: Are you asking what the purchase prices.
Speaker Change: I guess in a backwards way I am yes.
Speaker Change: $136 million.
Speaker Change: In accounting between $4 to $4 six.
Speaker Change: Four five to four six okay and can you remind us the blended cap on the dispositions.
Speaker Change: The first wave that we closed.
Speaker Change: Bear in mind that they were in Newfoundland and they were sort of assets. We had picked up in many many years ago and smaller portfolio. So they are sort of.
Speaker Change: We never ever went back into those markets to purchase so the liquidity it was a little bit higher than the norm. So they were about.
Speaker Change: Between six five and seven for those four assets.
Speaker Change: Obviously, the the remaining.
Speaker Change: Deals will be lower than that.
Speaker Change: Okay can you give us an indication of lower.
Speaker Change: Lower between five in the quarter and five five.
Speaker Change: Okay.
Speaker Change: Alright, so just as we I mean, you have a strong year over year earnings growth rate, but just as we look going forward just given the capital recycling and I guess, you'll still have a bit of a drag.
Speaker Change: Now offsetting when that comes online.
Speaker Change: Is it fair to say that your <unk>.
Speaker Change: Year over year earnings growth in the next three quarters will be lower than where you came in.
Speaker Change: Q1.
Speaker Change: Okay.
Speaker Change: I think well I think so because partially because the benefit from the developments that were completed in late 'twenty three the biggest.
Speaker Change: Every quarter the year over year change is less so when you think of that had meaningful impact in terms of <unk> growth this quarter that well by the time, we hit Q4 will be.
Speaker Change: Yeah positive, but not near to the same extent.
Speaker Change: So when I think when you look at <unk> per unit growth when you factor that and that alone is going to.
Speaker Change: I think.
Speaker Change: Q1 will be could be the highest in terms of <unk> per unit growth.
Speaker Change: Yes, that's fair and then last one before I turn it back can you just remind us I think theres, a pretty favorite boys C. L. P. On the character I'm, just trying to figure out how to model it in the.
Speaker Change: Interest and I imagine you start capitalizing in Q2, how would a worker.
Speaker Change: Yeah, Yeah, exactly it's that once that one for a substantially complete and leasing commences and people move in and start capitalizing interest. So we would expect right now likely based on the timing and it'll probably be in July.
Speaker Change: Sure, Okay, and what's the rate on the loans, specifically again can you remind us.
Speaker Change: Three 8%.
Speaker Change: Wonderful. Thanks, so much congrats on the strong quarter. Thank you.
Speaker Change: Your next question comes from Jonathan <unk> with J D. Cowen. Please go ahead.
Speaker Change: Thanks.
Speaker Change: Morning.
Speaker Change: First just on the elevated amount of renewables.
Speaker Change: In January was that is that just a hangover from from Covid and then we should I guess, we should expect to see your blended rental rates sort of inch up over the course of the year.
Speaker Change: Yes, yes, it is and part of it as one region that has the majority of the renewals in January I'm hearing a lot in game.
Speaker Change: Okay.
Speaker Change: And then the increase in incentives is that market specific asset specific maybe let us know how youre thinking about that going forward.
Speaker Change: Yes, it's very much asset specific and very specific to the know when phase two lease up and Phillips 66 as well.
Speaker Change: Okay. So outside of that you're not a lot of incentives.
Speaker Change: Yes, I think that 70% of the incentive balance in the month of March with specific to 10 assets in the portfolio. So it's pretty limited and then across there it would be very tiny sprinkling here or there.
Speaker Change: Okay, and then just lastly on the development side I guess outside of government programs. What are you guys seeing in terms of where hard costs are trending with tariffs and everything going on.
Speaker Change: Okay.
Speaker Change: They've trended down but.
Speaker Change: And I guess really.
Speaker Change: The one that we just priced and mortar Lou.
Speaker Change: <unk> costs came in at about 360000 for wood frame and then all the other costs.
Speaker Change: Are the solid plus the land.
Speaker Change: So we're pretty encouraged about that.
Speaker Change: Okay. So overall.
Speaker Change: It's stable to slightly declining unheard.
Speaker Change: Okay and would that be similar for concrete as well or just.
Speaker Change: Absolutely yes.
Speaker Change: Okay. Thanks, I'll turn it back thank you.
Speaker Change: Okay.
Speaker Change: Your next question comes from Kyle Stanley with Jordan. Please go ahead.
Kyle Stanley: Thanks, Good morning, everyone.
Speaker Change: As we sit here today.
Speaker Change: Approaching completion on the character you know, obviously, a deep pipeline of opportunities still to come but can you just talk through the yield dynamics on taking on the development yourself versus maybe looking to acquire newbuild assets.
Speaker Change: Either stabilize or not stabilized.
Speaker Change: Just how do you think you rank those in your capital allocation pecking order.
Speaker Change: Okay.
Speaker Change: I think we've tried to communicate in the past the development side you have to look at it from our point of view that is 2% to 3% on the on the balance sheet size.
Speaker Change: So at any given time, there's only between $100 million to $200 million and the goal is to consistently be having or having.
Speaker Change: That amount of development in the pipeline are finishing up.
Speaker Change: Therefore in terms of growth.
Speaker Change: Obviously, the real growth will come from looking at acquisition opportunities now or in the future.
Speaker Change: Right Okay.
Speaker Change: That makes sense to me.
Speaker Change: A question just on on Halifax, and supply, obviously, you kind of touched on it in your disclosures.
Speaker Change: Wondering what is the market like for condo deliveries specifically in Halifax and are you seeing similar dynamics at play in Halifax, as maybe what we're hearing about.
Speaker Change: Toronto or Vancouver, more individual investors some distress in the market and the impact that that has maybe had on discounting of rents is that something that you see a risk of an <unk> at all.
Speaker Change: Well I think I can I can address the condo side of it and really there is there is one operator from Toronto, He's finishing up one thats about 70 units to a 100 units and he is in the ground for a second one about the same size.
Speaker Change: And I can't think of any other ones out there now maybe it might be a couple a couple of them, but it's way less than a handful.
Speaker Change: So that's similar to a lot of the other markets right now for sure.
Speaker Change: Okay.
Speaker Change: Mercury here.
Speaker Change: Well, we've never had a big condo market just isn't part of our market for rental for the most part because there is a very evolved.
Speaker Change: Newbuild on the mortgage side.
Speaker Change: Alex.
Speaker Change: Okay. Okay.
Speaker Change: As expected but.
Speaker Change: Doesn't have the same risk profile that we're seeing in other markets such as good to hear.
Speaker Change: Okay, I will turn it back thanks very much.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Your next question comes from Dean Wilkinson with CIBC. Please go ahead.
Dean Wilkinson: Thanks, Good morning, everyone.
Speaker Change:
Speaker Change: Phil maybe just want to come back on on the bright well I think we've talked about this a little bit before.
Speaker Change: But the $200000 close to differential between what you could build that and say say the Carrick is that land basis or is that just straight up because it's it's a timber frame construction.
Speaker Change: No I mean the carrot.
Speaker Change: Is it COVID-19 pre COVID-19 or Covid building, which means theres Hs to you too and that's a big chunk of the difference.
Speaker Change: Okay.
Speaker Change: And then going forward it still seems like there's quite a large spread between say.
Speaker Change: Steel frame concrete construction and wood frame are you seeing more builds going towards the wood or do you think that could happen or how is that playing out because it would it would appear that.
Speaker Change: What might not be as a hit by a potential cross border tariff issues and things like that.
Speaker Change: Well I think the way that we're looking at it inside kill them isn't as bad.
Speaker Change: If you look at two buildings and the land is yours, you can do either wood or mid rise concrete.
Speaker Change: We're taking the approach that the wood.
Speaker Change: Building provides an opportunity that we can start and finish it in relatively 18 months versus three years.
Speaker Change: So that's part of the decision as well.
Speaker Change: We're not saying we're going to go all wood there will be obviously in the next few buildings, if we get them ready to come out of the ground at.
Speaker Change: It will be a mixture of the wood frame and the concrete and it's about really looking at the timing it takes to develop these assets.
Speaker Change: As well as the differential in the cost.
Speaker Change: And the rents you are getting I would assume are fairly similar.
Speaker Change: Fairly similar yes, okay.
Speaker Change: That's great. Thanks, I'll hand, it back.
Speaker Change: Thank you.
Jimmy Chen: Your next question comes from Jimmy Chen with RBC capital markets. Please go ahead.
Speaker Change: Thank you.
Speaker Change: So maybe just on new Brunswick operation.
Speaker Change: 10 long term still very strong markets.
Speaker Change: It looks like how you're feeling about new Brunswick, you know over the course of this year just given.
Speaker Change: They do have they been exposure to U S trade exports and just kind of wondering what your thoughts are on that market.
Speaker Change:
Speaker Change: Right now we haven't seen any signs not saying that there isn't some in terms of the.
Speaker Change: The tariff sort of potential threat and I look at them I mean, they're thriving sort of basically all three cities right now.
Speaker Change: So from our point of view.
Speaker Change: When you also look at it from a affordable average cost of rent in that province.
Speaker Change: It's very affordable.
Speaker Change: So which helps.
Speaker Change: Okay.
Speaker Change: Cushion any type of economic sort of decline are you know.
Speaker Change: Impact on the tariffs.
Speaker Change: They're holding stronger on population growth.
Speaker Change: So.
Speaker Change: The main cities are still seeing people and therefore demands there.
Speaker Change: In terms of the tariffs, yes, so softwood type of tariff could be it.
Speaker Change: The impact but.
Speaker Change: So nothing else Atlantic, Canada has proved to be resilient and they find a way.
Speaker Change: Okay.
Speaker Change: Looking to early May now.
Speaker Change: How is leasing so far in occupancy trending relative to how it ended at the quarter.
Speaker Change: Yeah, it's been it's been robust.
Speaker Change: Quite similar to what we would have shown in in Q1. So I think what we have seen has a whole market seeing is that you know of France. If rents are too high and people are still looking for pricing from six months ago for new stuff it might not move as quickly, but once rents are adjusted to what a true market rents are we feel.
Speaker Change: A lot of activity. So we've been we've been very pleased.
Speaker Change: With the momentum from our spring leasing.
Speaker Change: Okay.
Speaker Change: So you just have one more slide 14, it's interesting.
Speaker Change: A table here, where you show the tenant turnover by tenure.
Speaker Change: I was curious if I look at the.
Speaker Change: Four to six year and over six year bucket.
Speaker Change: Where you're capturing obviously the biggest rental increase.
Speaker Change: Is there any.
Speaker Change: A common reason for move outs, you can gather from those two buckets.
Speaker Change: From the older buckets, sorry, just yeah, yeah from yoga buckets.
Speaker Change: You know we've been surveying people for years its homeownership.
Speaker Change: People.
Speaker Change: With growing families.
Speaker Change: Laura.
Speaker Change: With people moving to Athene or center so.
Speaker Change: Every year.
Speaker Change: From tracking mess tariffs movement that happens and we're not seeing anything.
Speaker Change: I wouldn't say every now and again, you get to 2020 five year tenant.
Speaker Change: So from.
Speaker Change: A multitude of things.
Speaker Change: We wouldn't know definitively what is it.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Speaker Change: Okay.
Speaker Change: Ladies and gentlemen, as a reminder, if you do have any questions. Please press star followed by one. Your next question comes from Matt <unk> with National Bank Financial. Please go ahead.
Matt: Good morning, guys.
Speaker Change: Just wanted to quickly touch I think you made the commentary that you are seeing market rents stabilized and in some cases.
Speaker Change: Accelerate again and that would be evidenced by your kind of holding 15% mark to market notwithstanding getting a pretty good rent increase this quarter.
Speaker Change: Sure.
Speaker Change: What markets are the markets that you're starting to see kind of a.
Speaker Change: Move higher again in an end market rents at this point, presumably there's not a supply issue in those but are interested.
Speaker Change: The acceleration is not significant but we are seeing at Halifax right now.
Speaker Change: It's doing well.
Speaker Change: We have good activity to three new Brunswick provinces, three new Brunswick cities have done very well and they continue.
Speaker Change: As we as we went through April.
Speaker Change: It did very well and plus Newfoundland.
Speaker Change: Right.
Speaker Change: And even assets in Ontario that where we did bring those.
We're seeing a little bit of vacancy we brought the rents down done those units leased up and now we're able to start moving up slowly.
Speaker Change: And select assets there too so.
Speaker Change: It's really.
Speaker Change: Variety of locations and assets.
Speaker Change: Affordable product are relatively affordable product versus call.
Speaker Change: Call it higher end product in terms of that rent trajectory.
Speaker Change: Well again, our slides showed I mean, we're just purely cresting over $500.
Speaker Change: As a full portfolio.
Speaker Change: Okay Fair enough goes to your point about affordability and value proposition in terms of our assets. We've we spent a lot of money on maintaining them and I think it shows within markets when they start to get a little more challenging.
Speaker Change: We seem to be doing very well in terms of maintaining our existing unable to attract.
Speaker Change: Other <unk> prices.
Speaker Change: Sure.
Speaker Change: Alright gains for us and works for them.
Speaker Change: That makes sense I did notice as well on the Capex front.
Speaker Change: I understand that it's one quarter and theres seasonality in terms of Capex spend but it did seem like even for this time of year. It was on the lower side of that is that a function of.
Speaker Change: Hum.
Speaker Change: Decision in terms of what to invest in or is it just a quarter.
Speaker Change: Good observation I actually we had a discussion with our capital team and it really is you'll see it pick up in Q2 and.
Speaker Change: We know that we need to be getting contracts in place early so we can have to work on and maybe gain on the operating cost for the year, but that was a bit of a slow start this year, but we'll make it up okay.
Speaker Change: Okay fair enough.
Speaker Change: And then lastly, I mean, I think you guys took advantage of the opportunity to get up to the 50% that you didn't own in Ottawa.
Speaker Change: But at the same time I think at the beginning of the year or maybe late last year, you were talking about the disposition program and maybe some of that going to unit buybacks should we think that instead of buying back stock you've done that transaction or is there still an opportunity to buy back stock at this point with disposition proceeds.
Speaker Change: I think theres still an opportunity to do buybacks with the.
Speaker Change: We finished up all our dispositions for 2025.
Speaker Change: Okay.
Speaker Change: Thanks, guys.
Speaker Change: Thank you. Thank you.
Speaker Change: There are no further questions at this time I would now like to turn it back to you speakers for any closing remarks.
Speaker Change: Thank you for listening and.
Speaker Change: And your questions today, and we look forward to our Q2 conference call.
Speaker Change: On August the seventh.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, this does conclude your conference call for today, we thank you for participating and ask that you. Please disconnect your lines have a great day.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.