Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — NorthWest Healthcare Properties Real Estate Investment Trust — Q1 2018 Earnings Presentation
46 slides from Vital Infrastructure Property Trust's earnings presentation, May 15, 2018
Slide 1: Q1 2018 Investor Update
Q1 2018 INVESTOR UPDATE May 15, 2018
Slide 2: Disclaimer
DISCLAIMER Thi s presentation provi des a summary description of Northwest Healthcare Properties Real Estate Investment Trust (“NWH” or the “REIT”). This presentation should be read i n conjunction with and i s qualified in its entirety by reference to the REIT’s most recently filed financial s tate
Slide 3: Core Healthcare Infrastructure in Major Markets
CORE HEALTHCARE INFRASTRUCTURE IN MAJOR MARKETS TO RO NTO NorthWest Healthcare Properties Real Estate A UC K L A ND S ÃO P AUL O Investment Trust (TSX: NWH.UN) is a specialist healthcare real estate investor that owns a high quality portfolio of medical office and hospital properties located MELBOUR
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS FOCUSED Healthcare Real Estate Management Deep Specialists Expertise Relationships Pure play healthcare real estate Aligned leadership with a team of Leading tenant relationships and and infrastructure healthcare real estate experts operational understanding DIFFERENTIATED 96%+
Slide 5: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER DELIVERING STABLE Capitalizing on a robust acquisition pipeline: AND CONSISTENT Leveraging its existing platform, the REIT acquired two post acute care clinics in Germany for $57M; major milestone as the first non-MOB properties acquired in Germany RESULTS Significant
Slide 6: Dashboard
DASHBOARD GROSS BOOK VALUE ( 3) NORMALIZED AFFO / UNIT +30.5% YoY (8x increase since inception) (8) 15% since inception (8) $4,757m $3,646m $0.94 $0.92 $572m $0.80 At inception Q1-2017 Q1-2018 At inception Q1-2017 Q1-2018 OCCUPANCY WEIGHTED AVERAGE LEASE EXPIRY International portfolio above 99% +1.5
Slide 7: 2018 YTD Summary of Investment Activity
2018 Y TD SUMMARY OF INVESTMENT ACTIVITY Significant transactional activity to start 2018 Q1 Q2 Acquired an MOB in Berlin and two post-acute care clinics in Bad Kissingen and Acquired the 2nd largest MOB in Berlin, Germany for Wilhelmshaven, Germany, totaling $75M. Acquired the remaining 50% of Epwo
Slide 8: Solidifying Australasian Leadership
SOLIDIFYING AUSTRALASIAN LEADERSHIP History and key accomplishment in Australia Developed local Initial investment knowledge and Expansion and consolidation Integration and further expansion regional growth Generation In Region: Vital Manager Manager Full integration and rebranding of the strengthen
Slide 9: Recent Strategic Acquisitions and Initiatives in Australia
RECENT STRATEGIC ACQUISITIONS AND INITIATIVES IN AUSTRALIA Successful acquisition of Generation Healthcare REIT: NWH completed the $664M acquisition of Generation Healthcare REIT (“Generation”) in July, 2017 The transaction is accretive to AFFO and NAV in 2018 with development completions and fu
Slide 10: Recent Strategic Acquisitions and Initiatives in Australia - Continued
RECENT STRATEGIC ACQUISITIONS AND INITIATIVES IN AUSTRALIA - C ONTINUED Acquisition of a 10% interest in Healthscope (“HSO”): HSO is a leading Australian private healthcare provider, operating 45 Australian hospitals, 48 medical centers and 63 pathology laboratories. On May 7, 2018 NWH acquired
Slide 11: Strategic Acquisition of Post Acute Care Clinics in Germany
STRATEGIC ACQUISITION OF POST ACUTE CARE CLINICS IN GERMANY EXPANSION INTO REHAB NWH acquired two post acute care clinics in Germany from Median Kliniken (“Median”), a leading rehabilitation clinic operator CLINICS IS IN LINE WITH THE REIT’S Major milestone as the first non-MOB properties acquir
Slide 12: Financial Overview
FINANCIAL OVERVIEW 11
Slide 13: Q1-18 Financial Dashboard
Q1-18 FINANCIAL DASHBOARD As Reported Normalized Target Run Rate Track to management run rate and Deliver stable property operating Reflects completed and/or guidance performance, cash flow and contracted investment and finance Completion of the committed distributions activity as well as no
Slide 14: Financial Highlights - Profitability
FINANCIAL HIGHLIGHTS - PROFITABILITY POSITIVE OPERATING Q1-18 Q1-18 RESULTS IN LINE WITH As Reported Normalized MANAGEMENT NOI $66.2M $68.9M GUIDANCE FFO $23.2M $25.7M NORMALIZED RESULTS AFFO $25.1M $27.6M HAVE BEEN ADJUSTED W.A Units 120,138 120,300 Outstanding TO REFLECT THE IMPACT OF RECENTLY Ann
Slide 15: Financial Highlights - Capitalization
FINANCIAL HIGHLIGHTS - CAPITALIZATION QUARTER OVER Q4-17 Q1-18 QUARTER NAVPU As Reported As Reported INCREASED 2.7% TO Gross Book Value $4,684.0M $4,758.0M $12.32 DRIVEN BY Debt $2,124.8M $2,213.7M FX GAINS Convertible $296.9M $293.9M Debentures Other $881.7M $768,8M Net Asset V alue $1,440.7 $1,481
Slide 16: Balance Sheet Optimization and Regional Debt Strategy
BALANCE SHEET OPTIMIZATION AND REGIONAL DEBT STRATEGY BALANCE SHEET OPTIMIZATION DEBT MATURITY PROFILE (11) Near term interest savings ~$245M of 2018 maturities and potential refinance of ~$105M; targeted 100bps of interest rate savings Refinance ~$40M, 7.25% - 2018 par call convert Leverage g
Slide 17: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 10 YEAR PERIOD, PORTFOLIO INDEX HAS REMAINED RELATIVELY IN-LINE WITH ITS BASE VALUE 106 103 RENTAL INDEXATION 98 ACTS AS NATURAL 98 82 CURRENCY HEDGE LOCAL CURRENCY PROPERTY / CORPORATE DEBT TO REDUCE INVESTMENT RISK FX Rate - Spot day Var. % 31-Mar-17 31-De
Slide 18: Portfolio Overview
P O RT F O LI O OV E RV I EW 17
Slide 19: Portfolio Overview
PORTFOLIO OVERVIEW $4.8Bn International Platform C A N A D A B R A Z I L L EADING MEDICAL STRONG RELATIONSHIPS OF FICE BUILDING WITH LEADING P L ATFORM OP ERATORS 56 P ROPERTIES 7 P ROPERTIES 1 , 037 TENANTS S P NOI Growth (9) 1.2% 2 TENANTS 2.7% S P NOI Growth (9) Occupancy 91.4% F ITCH AAA+ RATED
Slide 20: Portfolio Diversification
PORTFOLIO DIVERSIFICATION NOI DIVERSIFICATION TOP 10 TENANTS BY GROSS RENT (12) GEOGRAPHICALLY BY GEOGRAPHY ( 4) DIVERSIFIED Q 1- 18 % of Gross Tenant Region PORTFOLIO OF CORE Rent 1 HEALTHCARE REAL Re de D`Or 14.0% ESTATE ASSETS IN Q 1- 17 2 Hea lthe Care STABLE AND GROWING RE G IONS 3.6% 3 INTERNA
Slide 21: Representative Investments
REPRESENTATIVE INVESTMENTS Toronto West Health Rede D’Or Hospital Median Portfolio Acurity Portfolio Centre Portfolio Ba d Kissingen and Wa kefield, Bowen and Royston IFOR a nd Santa Wilhelmshaven Helena Assets MOB - development Assets 2 Hospitals Assets 2 post-acute clinics Assets 3 Hospitals 294 B
Slide 22: Accretive Development & Expansion Pipeline
ACCRETIVE DEVELOPMENT & EXPANSION PIPELINE ~$295M of committed low risk development & expansions in Australasia, Brazil, and Canada WITH A TRACK to be funded through a combination of existing resources and property financing RECORD OF – $223M of Australasian hospital expansions at Vital and NWAUS
Slide 23: Committed Accretive Development & Expansions – Australasia
COMMITTED ACCRETIVE DEVELOPMENT & EXPANSIONS – AUSTRALASIA $223M of committed development at a weighted yield of ~7%. NINE DEVELOPMENT $15M of stabilized net operating income (at 100% interest) PROJECTS TOTALLING $53M of potential development gains on completion (at 100% interest) ~$223M ARE C
Slide 24: Strategy & Outlook
STRAFEGY & OUTLOOK S NORTHWEST
Slide 25: Relative Valuation
RELATIVE VALUATION AFFO Multiple THE REIT IS TRADING 20.0x AT A SIGNIFICANT $14.85 $15.08 DISCOUNT TO ITS 15.0x 16.1x 16.4x $11.37 $12.28 PEERS ON AN AFFO 12.4x 13.3x 10.0x MULTIPLE AND NAV BASIS 5.0x 0.0x NWH.UN Canadian REITS Internationally Focused US Healthcare REITS (EV > $1BN) Canadian REITS (
Slide 26: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly Distribution Type 100% Return of Capital in 2017 Unit Price $11.37 (May 11, 2018) Market Capitalization ~$1.4Bn Distribution Yield ~7.0% 52-Week Trading Range $10.34- $11.70 Volume Weighted Avg. Price (VWAP) (20-day) $
Slide 27: Investment Thesis
A P P E N D I X 1 INVESTMENT THESIS 26
Slide 28: Investment Highlights: Defensive, High Yielding Security with Growth Potential
INVESTMENT HIGHLIGHTS • Favourable demographics and industry trends Supportive • Aging populations Fundamentals • Rising healthcare expenditures • Defensive core healthcare infrastructure Attractive • Global gateway cities Asset Class • Leading healthcare operators • Significant internal and externa
Slide 29: Key Drivers of Health Care Real Estate
KEY DRIVERS OF HEALTH CARE REAL ESTATE Aging Population >65 population cohort growing rapidly in developed countries > 656mm people worldwide over 65 by 2021, ~11.5% of global population Consolidation & Cost Increased Healthcare The Rise of Private Savings Spending Healthcare Scale required fo
Slide 30: Healthcare Real Estate Opportunities
HEALTHCARE REAL ESTATE OPPORTUNITIES • NWH’s markets comprise a total population of ~350 million, slightly larger than the United States NWH’s Market • Total healthcare real estate opportunity estimated to be comparable to Opportunity the US (~$1 Trillion) across NWH’s markets • Significant potentia
Slide 31: Financial Metrics
A P P E N D I X 2 FINANCIAL METRICS 30
Slide 32: Transformational Growth Continues
TRANSFORMATIONAL GROWTH CONTINUES $6,000 $5,000 $4,684 $4,793 Total Book Value of Assets (C$mm) $4,000 $3,686 $3,000 $2,700 $2,000 $1,282 $1,315 $1,245 $1,012 $572 $746 $1,000 - IPO 2010 2011 2012 2013 2014 2015 2016 2017 2018 NWI investment and Canadian Medical Office Building (MOB) Consolidation i
Slide 33: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS GROSS BOOK VALUE (3) PORTFOLIO QUALITY Normalized GBV has increased from $3.6Bn to $4.8.Bn, a Portfolio quality improved – occupancy up to 96.3%; WALE ~30.5% increase increased from ~11 years to ~13 years. SP NOI NAV / UNIT (7) Cash SP NOI in source currency in
Slide 34: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS FINANCIAL PROFILE CAPITALIZATION Annualized AFFO / unit has increased from $0.91 to $0.92. Consolidated LTV (Incl. Converts) has been decreasing since Q3- Payout Ratio is down 598bps to ~87% 17 and achieved 53.1% in Q1-18. CAPITAL RAISING CAPITAL MARKETS AND LIQ
Slide 35: Regional Portfolio Overviews
A P P E N D I X 3 R E G I O N A L P O RT F O L I O OVERVIEW S 34
Slide 36: Portfolio Profile
PORTFOLIO PROFILE PORTFOLIO GLOBAL HEALTHCARE REAL ESTATE INFRASTRUCTURE COMPRISES 149 PROPERTIES Canada Brazil Germany Vital Trust NWAUS Platform TOTALING 10.1M Q1 2018 PF SQUARE FEET OF GLA IN FIVE COUNTRIES Number of 56 7 27 45 14 149 Properties STRONG OPERATING ~25% MOB & / ~75% Hospital ~64% MO
Slide 37: Canada: Largest Portfolio of MOB Assets
CANADA: LARGEST PORTFOLIO OF MOB ASSETS INVESTMENT AND MARKET OVERVIEW Canada’s largest non-government owner/manager of MOBs and healthcare related facilities YT Portfolio of 56 properties comprising GLA of 3.5 million sf and NT 1,037 tenants NU 91.4% occupancy and ~5.2 year WALE AB High qua
Slide 38: Brazil: Newly Built Private Pay Hospital Assets
BRAZIL: NEWLY BUILT PRIVATE PAY HOSPITAL ASSETS INVESTMENT AND MARKET OVERVIEW Institutional quality, core healthcare infrastructure assets in strategic markets including São Paulo, Brasilia and Rio de Janiero 100.0% occupancy and ~20.4 year WALE RORAIMA AMAPÁ Stable cash flow with long-term,
Slide 39: Germany: Strategically Located MOB Assets
GERMANY: STRATEGICALLY LOCATED MOB ASSETS INVESTMENT AND MARKET OVERVIEW High quality MOB assets located in the major markets including Berlin, S C HLESWIG- Hamburg, Frankfurt, Ingolstadt and Leipzig HO LSTEIN 97.2% occupancy and ~8.8 year WALE M E CK LENB URG-VORPOMMERN Wilhelmshaven 1 2 Expa
Slide 40: Australasia (1): Major Market Hospital and MOB Portfolio
AUSTRALASIA (1): MAJOR MARKET HOSPITAL AND MOB PORTFOLIO PORTFOLIO OVERVIEW Northwest Healthcare Properties Australia REIT “NWHP AUS” owns a leading Australian healthcare real estate portfolio with $924M in existing assets and a $89+ development pipeline of yields at ~6.0% on average. E pworth Vic
Slide 41: Australasia (2): Strategic Investment in Vital Trust
AUSTRALASIA (2): STRATEGIC INVESTMENT IN VITAL TRUST INVESTMENT AND MARKET OVERVIEW AUSTRALIA Manager and 24.9% strategic shareholder of Vital Trust (NZX:VHP), Australasia’s listed healthcare real estate owner with 26 private hospitals, 10 MOBs, 5 aged care assets and 4 development lots 99.3% oc
Slide 42: Management Biographies
A P P E N D I X 4 MANAGEMENT BIOGRAPHIES 41
Slide 43: Global Platform with Regional Capability and Expertise
GLOBAL PLATFORM WITH REGIONAL CAPABILITY AND EXPERTISE HIGHLY EXPERIENCED MANAGEMENT – COMBINED REIT REGIONAL OPERATING PLATFORM AND EXPERTISE AND ALIGNED EXECUTIVE Leading healthcare real MANAGEMENT TEAM Gerson Amado estate asset management Pa ul Dalla Lana Founder of NWH & NWI platform REITs M
Slide 44: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $11.37/unit as of May 11, 2018. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q1 -18 AFFO of $0.92/unit. 3. Based on total assets of NWH, Vital Trust on a fully consolidated basis including post -quarter acquisition
Slide 45: Contact Information
CONTACT INFORMATION NORTHWEST HEALTHCARE PROPERTIES REIT Paul Dalla Lana, Chairman & CEO 416-366-2000 Ext. 1001 Shailen Chande, CFO 416-366-2000 Ext. 1002 44
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NorthWest Healthcare Properties Real Estate Investment Trust — Q1 2018 Earnings Presentation on 6ix