Kennedy Wilson(KW)2019-05-03 23:53Financial Data and Key Metrics Changes - GAAP EPS was a loss of $0.04 per share compared to a loss of $0.02 in Q1 2018 [9] - Adjusted EBITDA was $120 million in the quarter, down from $123 million in Q1 2018 [9] - Adjusted net income totaled $54 million, compared to $63 million in Q1 2018 [9] - Estimated annual NOI of the real estate portfolio was $405 million, with 49% from the western U.S. and 51% from Europe [9][10] Business Line Data and Key Metrics Changes - Same property revenue and NOI grew by 3% across the global same property portfolio [11] - Excluding hotels, same property portfolio had a 5% NOI growth [11] - Multifamily portfolio saw same property revenue up 6% and NOI up 7% [12] - Southern California multifamily portfolio had an NOI growth of 10% [12] Market Data and Key Metrics Changes - The Irish multifamily portfolio had same property NOI growth of over 6% [14] - The Pacific Northwest same-store property portfolio had occupancies up 2% and NOI up almost 8% [14] - Office takeup in Dublin was the highest ever recorded in Q1 at over 1 million square feet [27] Company Strategy and Development Direction - Focus on growing NOI, investment management, and capital recycling [16] - Expecting to add $100 million of annualized NOI by the end of 2023 from current development projects [18] - Aiming to grow the multifamily portfolio in Dublin to 5,000 units [24] - Strategic asset sales to focus on high-quality investment opportunities [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals supporting rental growth in the multifamily portfolio [12] - The Irish economy is growing at a strong pace with GDP growth among the highest in the EU [27] - Anticipated strong performance in the hotel sector following renovations [61] Other Important Information - The company sold $323 million of assets during the quarter, generating $93 million in cash [41] - The company completed a EUR 261 million refinance on Capital Dock, achieving a low effective interest rate of 1.56% [44] Q&A Session Summary Question: Retail sector exposure and strategy - Management is both selling and adding value to retail assets, studying specific geographic markets for opportunities [47][49] Question: Impact of construction costs on development pipeline - Construction costs are manageable, but land prices have escalated, prompting caution in new acquisitions [51][52] Question: Revenue expectations for the Shelbourne hotel post-renovation - Management expects a return to strong performance with high occupancy rates and increased ADR [54][56] Question: Apartment pricing power in mountain states - Strong pricing power due to affordability and employment growth in markets like Boise and Reno [70][72] Question: Update on Dublin's apartment supply - There is a significant need for new housing, with estimates of 25,000 to 30,000 units needed annually [75] Question: Capital raising pipeline - The company has a robust pipeline for separate accounts and discretionary funds, with expectations for continued growth [80][82] Question: Future acquisition and disposition strategy - The company plans to prioritize high-quality assets and reduce the number of properties while increasing cash from sales [106]