Kennedy-Wilson (KW) 8 Aug 24 2024 Q2 Earnings call transcript

Kennedy-Wilson's second quarter 2024 earnings call highlighted the company's resilience and adaptability amidst challenging market conditions. Despite facing high inflation and interest rates, Kennedy-Wilson reported a 5% increase in estimated annual NOI to $485 million and a 16% growth rate in assets under management. The company's focus on its multifamily portfolio, investment management business, and strategic asset sales have positioned it for future growth.

Multifamily Portfolio and Investment Management Business

Kennedy-Wilson's multifamily portfolio has been a significant contributor to its success, with a 60,000-unit rental housing business and a strong track record in the U.S., U.K., and Ireland. The company's investment management business, which includes rental housing, has seen a 37% increase in revenue and a 5% growth in baseline EBITDA. These achievements reflect the company's successful execution of its investment strategies and its ability to navigate the current market challenges.

Asset Sale Plan and Capital Deployment

The company's asset sale plan, which includes the recent sale of a retail center in Spain, is part of its strategy to strengthen its balance sheet and focus on core assets. The sale generated $35 million in cash, contributing to the company's efforts to reduce unsecured debt and pursue future co-investment opportunities.

Market Conditions and Future Outlook

Kennedy-Wilson's optimistic outlook is supported by improving market conditions, including lower interest rates and increased liquidity in the U.S. apartment sector. The company's ability to adapt and expand its business, such as its plans to expand beyond construction lending, positions it well for future growth.

Investor and Analyst Questions

During the call, investors and analysts asked questions about the company's debt platform, the prospects for longer-term debt deals, and the impact of fair value adjustments on earnings. Kennedy-Wilson's executives provided insightful responses, highlighting the company's strategic approach and its commitment to transparency.

Conclusion

Kennedy-Wilson's second quarter 2024 earnings call underscored the company's resilience and adaptability in a challenging market. Its focus on multifamily housing, investment management, and strategic asset sales has positioned it for future growth. As the company continues to navigate market conditions and deploy capital, it remains committed to delivering value for its shareholders.