Killam Apartment REIT Pauses New Developments
Killam Apartment REIT is pausing new development projects in the near term, citing challenging market conditions and water infrastructure constraints in key growth markets.
During REIT’s first-quarter earnings call, CEO Philip Fraser pointed to the Kitchener-Waterloo region as an example of infrastructure-related hurdles after local officials halted support for some development approvals due to water capacity concerns.
Fraser also said wastewater capacity in Halifax is “very constrained in a number of areas.”
Killam said it will only pursue future developments when the development spread meets a required threshold, reflecting sufficient returns to justify development risk.
Industry groups say the challenges extend beyond infrastructure. Michael Brooks, CEO of REALPAC, told CBC that new development is “almost becoming rare” in Canada.
“The numbers don’t work,” he told his interviewer. “There’s not enough return for the risk you have to take, if there’s any return at all.”
Duncan Williams, president of the Construction Association of Nova Scotia, told the media outlet that the province faces a “significant” infrastructure deficit and that recent population growth has added pressure to existing systems. He added that many proposed projects remain on hold.
“There are a lot of projects that are in the pipeline, but they are kind of on pause right now,” Williams told CBC.”
“I don’t anticipate that getting any better immediately. I think it will in the medium to long term. That will depend, however, on … world forces.”
Killam is one of Canada’s largest residential landlords, owning, managing and developing multi-residential properties primarily in Atlantic Canada, Ontario and Alberta.
Photo: Killam Apartment REIT
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