Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — NorthWest Healthcare Properties Real Estate Investment Trust — Q4 2018 Earnings Presentation
52 slides from Vital Infrastructure Property Trust's earnings presentation, Mar 7, 2019
Slide 1: Q4 2018 Investor Update
Q4 2018 INVESTOR UPDATE March 7, 2019
Slide 2: Disclaimer
DISCLAIMER This presentation provides a summary description of Northwest Healthcare Properties Real Estate Investment Trust (“NWH” or the “REIT”). This presentation should be read in conjunction with and is qualified in its entirety by reference to the REIT’s most recently filed financial statements
Slide 3: Core Healthcare Infrastructure in Major Markets / NWH at a Glance
CORE HEALTHCARE INFRASTRUCTURE IN MAJOR MARKETS TORONTO NorthWest Healthcare Properties Real Estate AUCKLAND SÃO PAULO 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 MELBOURNE B E R L
Slide 4: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER DELIVERING STABLE Delivering stable operating results AND CONSISTENT Stable per unit AFFO and NAV per unit RESULTS Source currency adjusted cash SPNOI growth of 4.3% YTD Occupancy of 96.7%; International portfolio occupancy above 98% PREVIOUSLY European platform c
Slide 5: Dashboard
DASHBOARD GROSS BOOK VALUE NORMALIZED AFFO / UNIT +8.3% YoY (8.9x increase since inception) +11.0% since inception $5,072m $4,684m $0.93 $0.88 $572m $0.80 At inception Q4-2017 Q4-2018 At inception Q4-2017 Q4-2018 Annualized Normalized OCCUPANCY WEIGHTED AVERAGE LEASE EXPIRY International portfolio a
Slide 6: 2018 YTD Summary of Investment Activity
2018 YTD SUMMARY OF INVESTMENT ACTIVITY Significant Transactional Activity in 2018 Q1 Q2 Acquired an MOB in Berlin and two post-acute care clinics in Bad Kissingen and Wilhelmshaven, Germany, totaling $80M. Acquired the Acquired the 2nd largest MOB in Berlin, Germany and two high quality MOBs in rem
Slide 7: Significant Value Creation in ANZ Manager
SIGNIFICANT VALUE CREATION IN ANZ MANAGER PRO-FORMA THE INSTITUTIONAL AUSTRALIAN HEALTHSCOPE JV PLATFORM ACQUISITION NORTHWEST MANAGES AUM (in $M) $491(*) $1,617 $2,000 $1,200 > $5,000 A$5.0BN AUSTRALASIAN PLATFORM WITH A$3.5BN NWH Ownership OF FEE BEARING CAPITAL % 100% 24.9% 30% 25%-30% 34% AND A
Slide 8: Growth Through Capital Relationships
GROWTH THROUGH CAPITAL RELATIONSHIPS OPPORTUNITY TO Healthcare real estate is an attractive investment for long-term institutional capital LEVERAGE A Defensive healthcare fundamentals support high occupancy and long term indexed leases DIFFERENTIATED High quality, new generation healthcare fac
Slide 9: Solidifying Australasian Leadership
SOLIDIFYING AUSTRALASIAN LEADERSHIP History and Key Accomplishments in Australia Developed local Initial investment knowledge and Expansion and consolidation Integration and further expansion regional growth Generation Manager In Region: Vital Manager acquisition: Full integration and rebranding of
Slide 10: Financial Overview
FINANCIAL OVERVIEW 9
Slide 11: Q4-18 Financial Dashboard
Q4-18 FINANCIAL DASHBOARD As Reported Normalized Target Track to management run rate and Deliver stable property operating Completion of Project Galaxy performance, cash flow and guidance including Seed portfolio sale. distributions Completion of the committed Completed the acquisition of
Slide 12: Financial Highlights - Profitability
FINANCIAL HIGHLIGHTS - PROFITABILITY POSITIVE OPERATING Q4-18 Q4-18 RESULTS IN LINE WITH As Reported Normalized MANAGEMENT NOI $66.8M $68.1M GUIDANCE FFO $26.5M $31.6M NORMALIZED RESULTS AFFO $24.5M $29.6M HAVE BEEN ADJUSTED W.A Units 121,169 134,670 Outstanding TO REFLECT THE IMPACT OF RECENTLY Ann
Slide 13: Financial Highlights - Capitalization
FINANCIAL HIGHLIGHTS - CAPITALIZATION Q3-18 Q4-18 Q4 2018 NAV/UNIT WAS As Reported As Reported POSITIVELY IMPACTED BY Gross Book Value $4,679.6M $5,071.6 FAVOURABLE F/X Debt $2,299.0M $2,423.1M MOVEMENTS AND FV Convertible GAINS ACROSS THE REIT’S $295.3M $401.2M Debentures PORTFOLIO Other $564.0M $5
Slide 14: Balance Sheet Optimization and Regional Debt Strategy
BALANCE SHEET OPTIMIZATION AND REGIONAL DEBT STRATEGY BALANCE SHEET OPTIMIZATION DEBT MATURITY PROFILE (11) Debt Optimization Opportunities Near-term debt maturities totaling ~$260M at 6.8% WAIR; offering attractive interest rate saving opportunity Extend debt maturity profile to align with long
Slide 15: Risk Management - Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 10 YEAR NOI FX Rate - Spot Var. % 150 Weight 29-Dec-17 28-Sep-18 31-Dec-18 QoQ YoY 7-Feb-19 Var. % PERIOD, PORTFOLIO BRL:CAD 17.2% 0.3796 0.3188 0.3514 10.2% -7.4% 0.3581 1.9% EUR:CAD 9.6% 1.5089 1.4979 1.5636 4.4% 3.6% 1.5091 -3.5% 140 NZD:CAD 42.4% 0.8913
Slide 16: Portfolio Overview
P O RT F O L I O O V E RV I E W 15
Slide 17: Portfolio Overview
PORTFOLIO OVERVIEW $5.1Bn International Platform C A N A D A B R A Z I L LEADING MEDICAL STRONG RELATIONSHIPS OFFICE BUILDING WITH LEADING PLATFORM OPERATORS 56 PROPERTIES 8 PROPERTIES SP NOI Growth (9) 0.4% SP NOI Growth (9) 3.1% 1,050 TENANTS 8 TENANTS Occupancy 93.2% FITCH AAA+ RATED Occupancy 10
Slide 18: Portfolio Diversification
PORTFOLIO DIVERSIFICATION NOI DIVERSIFICATION TOP 10 TENANTS BY PERCENTAGE OF GROSS RENT (12) GEOGRAPHICALLY BY GEOGRAPHY (4) DIVERSIFIED % of Gross Tenant Region PORTFOLIO OF CORE Rent 1 HEALTHCARE REAL Rede D'Or 14.3% ESTATE ASSETS IN 2 Healthe Care 12.8% STABLE AND GROWING REGIONS 3 INTERNATIONAL
Slide 19: Recent Developments
RECENT DEVELOPMENTS Healthscope $2.0 BN Institutional Significant European Transaction Hospital Morumbi Joint Venture Acquisition Pipeline Complete Complete Compete Complete Ongoing NWH has entered into a Size 233k Square Feet Size A$2.0Bn (debt and equity) ~€90M of near term Transaction definitive
Slide 20: Healthscope Investment Highlights
HEALTHSCOPE INVESTMENT HIGHLIGHTS CORE HEALTHCARE INFRASTRUCTURE IN MAJOR MARKETS Transformational 11 property, $1.2BN transaction solidifies the REIT as the leader in Australian healthcare real estate NORWEST Highly complimentary to NWH’s existing portfolio Deepens relationship with Australia
Slide 21: Case Study #1 - Epworth Eastern Hospital, Melbourne
CASE STUDY #1 - EPWORTH EASTERN HOSPITAL, MELBOURNE Development of a Healthcare Precinct Co-located private hospital Epworth Eastern Private Public hospital initial Public and private hospitals development attracts Hospital announces major demand catalyst drive health precinct specialists expansion
Slide 22: Case Study #1 - Epworth Eastern Hospital, Melbourne
CASE STUDY #1 – EPWORTH EASTERN HOSPITAL, MELBOURNE Development of a Healthcare Precinct Epworth Eastern Private Public hospital initial Private hospital development Public and private hospitals Hospital announces major demand catalyst leads to formation of precinct drive health precinct expansion 1
Slide 23: Case Study #2 - MEDIAN, Germany
CASE STUDY #2 – MEDIAN, GERMANY SCALED EUROPEAN PLATFORM PROVIDED Market ~230,000 ACCESS TO PARTICIPATE Leader Patients p.a. IN RECENT ~€940 M 120 CONSOLIDATION Revenue Facilities TRENDS ~18,200 ~15,000 Beds/Places Employees German Fragmented Private Equity NorthWest Rehabilitation Market Leads to A
Slide 24: Case Study #2 - MEDIAN, Germany
CASE STUDY #2 – MEDIAN, GERMANY Supporting ongoing Partnership is foundation MEDIAN seeking reliable real MEDIAN expansion with for continuous acquisition estate partners Who is MEDIAN? SLB transactions pipeline Largest private rehabilitation provider 2017 Present Future with 120+ facilities acros
Slide 25: Case Study #3 - Rede D'Or, Brazil
CASE STUDY #3 – REDE D’OR, BRAZIL PLATFORM GROWTH HAS Top 5 Global Healthcare Market NorthWest's Brazilian Portfolio has Scaled Significantly ALLOWED NWH TO Third largest private healthcare market: $180BN REMAIN A KEY CAPITAL p.a. healthcare spending (9% of GDP) NorthWest owns 8 hospitals totali
Slide 26: Case Study #4 - Healthe Care, Australia
Case study #4 – Healthe Care, Australia Driving growth through relationships 2019 Third largest for-profit private hospital operator 2006 2016 2017 in Australia Commenced healthcare operations with the Acquired by pan-Asian health services group that is exploring Acquired portfolios of 18 hospitals
Slide 27: Accretive Development & Expansion Pipeline
ACCRETIVE DEVELOPMENT & EXPANSION PIPELINE ~$344M ($157M proportionate) of committed low risk development & expansions in WITH A TRACK Australasia, Brazil, and Canada to be funded through a combination of existing resources RECORD OF and property financing $275M ($87M proportional) of Australasian
Slide 28: Committed Accretive Development & Expansions - Australasia
COMMITTED ACCRETIVE DEVELOPMENT & EXPANSIONS – AUSTRALASIA SEVEN DEVELOPMENT $275M ($87M proportional) of committed development at a weighted yield of 6.3% (6.2% PROJECTS TOTALLING proportional). ~C$275M ARE $17M of stabilized net operating income (at 100% interest) CURRENTLY Project Cost Cost t
Slide 29: Strategy & Outlook
STRAFEGY & OUTLOOK Ss NORTHWEST
Slide 30: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AFFO Multiple 22.0x AT A SIGNIFICANT $18.15 DISCOUNT TO ITS 17.0x $14.86 20.6x PEERS ON AN AFFO $11.10 16.9x $13.24 12.0x 15.0x MULTIPLE BASIS 12.6x 7.0x 2.0x NWH.UN Canadian REITS Internationally Focused US Healthcare REITS -3.0x (EV > $1BN) Canadian REITS (To
Slide 31: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly 55% Return of Capital / Distribution Type 45% Capital Gains Unit Price (Dec 31, 2018) $9.48 Market Capitalization ~$1.5Bn Distribution Yield ~7.2% 52-Week Trading Range $9.10- $11.70 Volume Weighted Avg. Price (VWAP) (
Slide 32: Investment Thesis
A P P E N D I X 1 INVESTMENT THESIS 31
Slide 33: 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 34: Healthcare Real Estate Thesis
HEALTHCARE REAL ESTATE THESIS • 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
Slide 35: 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 36: 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 the US Opportunity (~$1 Trillion) across NWH’s markets • Significant potentia
Slide 37: Financial Metrics
A P P E N D I X 2 FINANCIAL METRICS 36
Slide 38: Transformational Growth Continues
TRANSFORMATIONAL GROWTH CONTINUES NWI Investment and Canadian Medical Office Building (MOB) Consolidation International Growth Defensive High Improved Positioned for Quality Portfolio Market Profile Growth Core Healthcare Focus Increased Market Capitalization Aligned & Integrated Global Platfo
Slide 39: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS GROSS BOOK VALUE PORTFOLIO QUALITY GBV has increased from $4.8N to $5.1BN, a ~6.7% increase Portfolio quality improved – occupancy up to 96.7% with WALE increasing to 12.6 years. Normalized GBV YoY + 6.7% Occupancy % YoY + 0.5 years Wale 4.9 5.1 96.7% 4.8 4.8 4.
Slide 40: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS FINANCIAL PROFILE CAPITALIZATION Q4 Normalized AFFOPU of $0.88 results in a ~90% payout ratio Consolidated LTV (Incl. Converts) is 55.7% (flat QoQ) 60% Normalized AFFOPU AFFO payout ratio 56.1% 55.7% 55.7% 1.10 100% 55% 53.1% 53.1% 1.00 0.93 0.92 50.2% 0.90 0.88
Slide 41: Regional Portfolio Overviews
A P P E N D I X 3 REGIONAL PORTFOLIO OVERVIEWS 40
Slide 42: Portfolio Profile
PORTFOLIO PROFILE PORTFOLIO GLOBAL HEALTHCARE REAL ESTATE INFRASTRUCTURE COMPRISES 156 PROPERTIES Q4 2018 Canada Brazil Europe Vital Trust NWAUS Platform (1) TOTALING 11.2M SQUARE FEET OF GLA IN SIX COUNTRIES Number of 56 8 32 45 15 156 Properties STRONG OPERATING ~94% MOB & / ~24% MOB & / ~76% Hosp
Slide 43: 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 1,050 tenants NU 93.2% occupancy and ~5.1 year WALE High qualit
Slide 44: 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 Janeiro RORAIMA 100.0% occupancy and ~20.4 year WALE AMAPÁ Stable cash flow with long-term,
Slide 45: Europe: Strategically Located MOB Assets
EUROPE: STRATEGICALLY LOCATED MOB ASSETS INVESTMENT AND MARKET OVERVIEW High quality MOB assets located in the major markets including Berlin, The Netherlands SCHLESWIG- Hamburg, Frankfurt, Ingolstadt, Leipzig and Rotterdam 2 HOLSTEIN 96.4% occupancy and ~10.8 year WALE MECKLENBURG-VORPOMMERN Wi
Slide 46: 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 over $600M in existing assets Portfolio of 15 Properties of ~1.3M Square Feet Epworth Victoria Par
Slide 47: Australasia (2): Strategic Investment in Vital Trust
AUSTRALASIA (2): STRATEGIC INVESTMENT IN VITAL TRUST INVESTMENT AND MARKET OVERVIEW Manager and 24.9% strategic shareholder of Vital Trust (NZX:VHP), AUSTRALIA Australasia’s listed healthcare real estate owner with 26 private hospitals, 10 MOBs, 5 aged care assets and 4 development lots 99.4% oc
Slide 48: Management Biographies
A P P E N D I X 4 MANAGEMENT BIOGRAPHIES 47
Slide 49: Global Platform with Regional Capability and Expertise
GLOBAL PLATFORM WITH REGIONAL CAPABILITY AND EXPERTISE FULLY ESTABLISHED, MANAGEMENT REGIONAL OPERATING PLATFORM AND EXPERTISE SCALABLE REGIONAL TEAMS WITH EXPERTISE IN Paul Dalla Lana Gerson Amado Leads NWH’s Brazilian Founder of NWH & NWI REITs Chairman & Managing platform HEALTHCARE PROPERTY
Slide 50: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $11.10/unit as of February 28, 2019. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q4-18 AFFO of $0.88/unit. 3. Based on total assets of NWH, Vital Trust on a fully consolidated basis including post-quarter acquisit
Slide 51: 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 50
Slide 52: Slide 52
NorthWest Healthcare Properties Real Estate Investment Trust — Q4 2018 Earnings Presentation on 6ix