• Adjusted EBITDA: Increased from $190 million in 2023 to $540 million in 2024.
• Investment Management Fees: Grew by 60% year-over-year to approximately $100 million in 2024.
• New Loan Originations: Completed a record $1.4 billion in Q4 and $3.5 billion for the year.
• Asset Sales: Generated $475 million in cash and $200 million in gains in 2024.
• GAAP EPS: $0.24 per share for Q4 compared to a loss of $1.78 in Q4 2023.
• Investment Management Revenue: Increased by 83% to $30 million in Q4.
• Baseline EBITDA: Totaled $98 million in Q4, increased by 4% year-to-date to $407 million.
• Estimated Annual NOI: $467 million from real estate equity and credit investments.
• Same-Property NOI Growth: 5.6% in Q4.
• Occupancy Rate: Apartment portfolio ended the quarter with 95% occupancy.
• Unsecured Debt Repayment: $262 million repaid in Q4, including $184 million of KWE bonds.
• Consolidated Cash: Ended the quarter with $218 million.
• Fee-Bearing Capital: Reached a record $8.8 billion.
• Interest Rate Hedging: Produced cash benefits of $8 million in Q4 and $41 million in 2024.
• Apartment Portfolio NOI: $300 million with an additional $16 million expected from development.
• Mountain West NOI Growth: 7.3% in Q4.
• Pacific Northwest NOI Growth: 6.6% in Q4.
• Vintage Housing NOI Growth: 10.5% in Q4.
• Irish Apartment Portfolio Occupancy: 97% at the end of the quarter.
• Office Portfolio NOI Growth: 2% same-property growth in 2024.
• European Industrial Platform: 98% occupied with 23% rent increase in Q4.

• Warning! GuruFocus has detected 5 Warning Signs with KW.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kennedy-Wilson Holdings Inc (NYSE:KW) reported a significant increase in adjusted EBITDA, nearly tripling from $190 million in 2023 to $540 million in 2024.
• Investment Management fees grew by 60% year-over-year, reaching approximately $100 million in 2024, driven by strong momentum in their credit platform.
• The company successfully completed a record $1.4 billion of new loan originations in Q4 and $3.5 billion for the year, focusing on high-quality market rate multifamily and student housing.
• Kennedy-Wilson Holdings Inc (NYSE:KW) achieved its $550 million asset sale target for 2024, generating $475 million in cash and $200 million in gains from asset sales.
• The company's apartment portfolio ended the quarter with 95% occupancy, and same-property NOI grew by 5.6% in Q4, indicating strong operational performance.

Negative Points

• Despite improvements, the company still faces the challenge of reducing its unsecured debt, with $310 million maturing in November 2025.
• The refinancing of Irish apartment portfolio debt will result in higher interest rates, moving from just under 3% to mid-4s, potentially impacting future cash flows.
• The company is exiting non-core markets like Italy and Spain, which may limit its geographic diversification.
• Kennedy-Wilson Holdings Inc (NYSE:KW) is still exposed to potential interest rate volatility, although 97% of its debt is fixed or hedged.
• The company faces ongoing challenges in the office sector, with a focus on exiting non-core office and retail assets, which could impact short-term revenue.

Q & A Highlights

Q: Can you clarify the $400 million of incremental proceeds from dispositions in 2025? Are there specific assets targeted for sale? A: Yes, the strategy will be similar to 2024, focusing on core competencies like housing-related investments and investment management. Non-core assets, such as wholly owned office and retail properties, particularly in markets like Italy and Spain, will be targeted for sale. Proceeds will be used to pay down unsecured debt and fund co-investment platforms for better returns. (Matthew Windisch, President)

Q: With the competitive construction lending environment, how flexible is Kennedy-Wilson in reallocating committed capital? A: Some commitments are already made with future funding obligations. The construction lending space remains compelling, especially in apartment and student housing construction. The pipeline is robust, and there are plans to expand offerings and grow the credit platform in different ways. (Matthew Windisch, President)

Q: How important is it to add more equity capital to fee-bearing AUM for longer duration investments? A: Institutional partners are being cultivated, primarily interested in the UK and US markets, focusing on rental housing, credit, and industrial sectors. The company expects to deploy more capital this year, with a significant portion in the credit space. More equity opportunities are anticipated as pricing becomes more realistic. (William Mcmorrow, CEO)

Q: What are the expected yields and margins for the UK single-family rental platform, and how will it be managed? A: The platform aims for yields stabilizing in the high 5s to 6%. It will be managed with an in-house asset management team, supplemented by outsourced property management as needed. The focus is on acquiring properties at discounts from housebuilders to create rental communities. (Michael Pegler, President, Europe)

Q: What is the outlook for apartment supply in the Sunbelt markets, and how does it affect Kennedy-Wilson's strategy? A: Supply is not expected to significantly increase in the near term. Only top developers are securing capital, and construction volumes remain below previous levels. While some projects are completing, a significant ramp-down in deliveries is anticipated in the next 18 months. (Matthew Windisch, President)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.