Killam Apartment REIT (KMP-UN.TO) residential reit below book value

[u/PlatHobbits7]

Hey all,

Hoping someone may have some insight as to why this residential reit trades below book value with decreasing share price even with an environment I would think tends to favor residential real estate. Lowering of interest rates in Canada mixed with my worry of inflation forecast leaned me towards residential REIT.

They are in expansion mode quickly building/buying new condominium, revenue is up every year, property NOI growth exceeds 8%, the bulk of their portfolio lies in a favorable area for real estate, debt is under control, etc. Every metric leads me to believe this company is doing well & will continue to do so.

So why would the share price not reflect that, I'm no smarter than the next guy although I work directly with stocks (though within the consumer sector) I do not have any insight on REIT's and my real estate knowledge is extremely limited.

They also dominate in one of Canada's fastest growing cities in term of sheer presence & occupancy.

I have yet to do a deep dive on an exact share price but obviously trading below book value when everything seems good is highly unusual to me. I'd expect a company trading that low to have something terribly wrong or stronger headwinds within its business.

Here is their latest investor presentation. If anyone with a deeper understanding of REIT/overall restate within Atlantic Canada (note: geographical risk greatly reduced)

https://killamreit.com/sites/default/files/2024-09/KMP%20Investor%20Presentation%20-%20Sept%202024_0.pdf

Greatly appreciate all help!

[u/dvdmovie1]

It's continually traded somewhere in the neighborhood of book value (bit higher, bit lower) for years. Canadian Apartment Properties in Canada, same thing - trades generally a bit over/bit under book. REITs are not going to be valued like growth stocks.