Killam REIT Confirms Jan. Payout Amid Shifting Canadian Rental Market

HALIFAX, NS – January 16, 2026 – Killam Apartment REIT (TSX: KMP.UN) reaffirmed its commitment to unitholder returns today, announcing its regular monthly cash distribution of $0.06 per unit for January 2026. The distribution will be paid on February 17, 2026, to unitholders of record as of January 30, 2026.

While a routine operational announcement, the move underscores the company's position as a source of stable income for investors, particularly as the Canadian residential real estate market navigates a period of significant adjustment. The announcement also highlighted the company's Distribution Reinvestment Plan (DRIP), which offers participating unitholders an attractive 3% bonus in additional units, providing a powerful mechanism for compounding returns over time.

A Beacon of Consistency for Income Investors

In an economic environment marked by fluctuating interest rates and market uncertainty, consistency is a highly valued commodity. Killam has cultivated a reputation for just that, building a track record of reliable distributions spanning over 17 years. The REIT has maintained or grown its dividend over the last decade, with an average annual growth rate of 2.50% over that period.

This reliability is underpinned by a healthy financial position. While payout ratios can be measured in various ways, Killam’s ratio based on trailing year earnings hovers around a sustainable 16%. This conservative figure suggests that the distributions are well-covered by earnings, providing a significant buffer against operational volatility and leaving ample capital for reinvestment into the business.

For investors focused on long-term wealth creation, the REIT's DRIP presents a compelling value proposition. By allowing unitholders to automatically reinvest their cash distributions into new units, the plan facilitates a disciplined investment approach. The additional 3% distribution offered as a bonus to DRIP participants acts as a powerful accelerant, effectively boosting the total return and speeding up the compounding of their investment in the company's growth.

The Engine Room: A $5.6 Billion Residential Portfolio

The ability to consistently reward unitholders stems directly from the performance of Killam's substantial $5.6 billion portfolio of apartments and manufactured home communities. Headquartered in Halifax, the REIT is one of Canada's largest residential landlords, with a clear three-pronged strategy focused on long-term value creation.

First, the company prioritizes increasing earnings from its existing properties through operational efficiencies and targeted upgrades. Second, it focuses on expanding its portfolio through what it terms "accretive acquisitions," targeting newer properties in diverse geographic locations while strategically selling off non-core assets. Finally, Killam is actively involved in developing new, high-quality properties within its core markets, adding modern supply to meet persistent housing demand.

When benchmarked against its peers, Killam holds a strong position in the Canadian residential REIT sector. While it is smaller in market capitalization than the sector's largest player, Canadian Apartment Properties REIT (CAPREIT), Killam offers a competitive dividend yield of approximately 4.1%. This positions it favorably against competitors and provides an attractive income stream relative to the broader market.

Navigating a Shifting National Housing Market

Killam's latest distribution announcement comes as the Canadian rental market finds a new equilibrium. After a period of rapid rent growth, 2025 saw a market-wide cooling, with the national vacancy rate rising to 3.1% as a surge in purpose-built rental construction met with softer demand. This led to a notable slowdown in rent growth and, in major markets including Halifax, a decline in asking rents for new leases as landlords competed for tenants.

However, the outlook for 2026 suggests a return to gradual growth and stabilization. Pent-up demand, particularly from first-time homebuyers facing affordability challenges in the ownership market, is expected to continue fueling the rental sector. In Killam's home market of Halifax, record construction has increased supply and eased some of the intense pressure seen in previous years. While this has led to a softening in the luxury segment, demand for more affordable units remains robust.

With interest rates expected to remain relatively stable throughout 2026, the environment appears conducive for large, well-capitalized operators like Killam. The company's strategic focus on both established apartments and manufactured home communities provides a diversified asset base that can perform well across different economic cycles and renter demographics.

Wall Street's View on KMP.UN

Market analysts appear to view Killam's strategy and market position favorably. The consensus rating among analysts covering the stock is a "Moderate Buy," reflecting a positive outlook on its future performance. Two of the three most recent analyst ratings are "buy," with one "hold."

The average twelve-month price target for KMP.UN stands at C$20.30, suggesting a potential upside of over 14% from its current trading price. Forecasts range from a low of C$19.00 to a high of C$21.50, indicating that experts see a clear path for capital appreciation in addition to the steady income from distributions.

This positive sentiment reflects confidence in the REIT's ability to execute its growth strategy while navigating the complexities of the current housing landscape. By balancing operational discipline with strategic expansion and development, Killam appears well-positioned to continue delivering value to its unitholders through both reliable income and long-term growth.