Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — Northwest Healthcare Properties Real Estate Investment Trust — Q3 2021 Earnings Presentation
39 slides from Vital Infrastructure Property Trust's earnings presentation, Nov 11, 2021
Slide 1: Q3 2021 Investor Update
Q3 2021 INVESTOR UPDATE November 11, 2021
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: NWH at a Glance
TORONTO Focused Healthcare Real Estate Investment Partner Global scale, local relationships Partner of choice for leading operators LONDON SÃO PAULO Defensive operating fundamentals Cure focus underpinned by government funding A proven track record 10+ year total shareholder return of 165% (10
Slide 4: Healthcare Real Estate - Cure vs Care
HEALTHCARE REAL ESTATE - CURE VS CARE GLOBAL Healthcare Real Estate is estimated to be >$3T in value. NORTHWEST focuses on the CURE segment of Healthcare Real Estate. CURE CARE Higher Acuity Lower Acuity Hospital Post-acute Rehab Outpatient Life Sciences Skilled Assisted Living Independent & Ambulat
Slide 5: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER Stable and Improving Operating Results $0.92 2.4% +96.9% $13.60 Normalized Occupancy NAV/Unit AFFO/Unit SPNOI Growth Executing on Strategic Priorities ~$160M UK PORTFOLIO VALUE CREATION CONTINUED DELEVERAGING $126M 57.6% 57.0% Fair value $21M gain 52.1% Acquisition 49.6% 49
Slide 6: 2021 Strategic Priorities
2021 STRATEGIC PRIORITIES STRATEGIC INITIATIVES SCALING GLOBAL ASSET GLOBAL EXPANSION FOCUS ON ESG ALIGN WITH CONTINUED MANAGEMENT PLATFORM MATURATION OF THE ORGANIZATION: • Increasing scale through • In 2020 the REIT successfully • REIT wide commitment to capital deployment: entered the UK and acqu
Slide 7: Defensive Underlying Portfolio
DEFENSIVE UNDERLYING PORTFOLIO Operating Metrics Diversification 97% 99% 7 >2,000 Q3 2021 Cash & Portfolio Occupancy Countries Tenants Total Collections Diverse tenants encompass 76% 14 yr hospitals operators, Inflation Indexed rehabilitation clinics, life WALE sciences and individual Rents STABLE p
Slide 8: Delivering on NAV Growth with More to Come
DELIVERING ON NAV GROWTH WITH MORE TO COME 11% YOY NAV/UNIT GROWTH PRIMARILY DRIVEN BY FAIR VALUE GAIN $2.00 ($0.40) ~11% YoY (15% YoY ($0.27) constant currency) $13.60 $12.27 Q3-20 NAV/Unit IPP revaluation FX Other Q3-21 NAV/Unit PATH TO FURTHER $250M+ VALUE CREATION Global Asset Institutionalizati
Slide 9: Global Cap Rate Compression Drives ~$375M YoY Fair Value Gain
GLOBAL CAP RATE COMPRESSION DRIVES ~$375M YOY FAIR VALUE GAIN CANADA AUM $1.2B EUROPE (incl. UK) WACR 6.4% AUM $2.0B WACR 12 bps WACR 4.6% Compression YoY WACR Compression 97 bps YoY BRAZIL AUM $0.7B WACR 6.8% AUSTRALASIA WACR 25 bps AUM $4.6B Compression YoY WACR 4.9% WACR 45 bps Compression YoY 10
Slide 10: UK Portfolio Initiatives Complete; Positioned for UK JV
UK PORTFOLIO INITIATIVES COMPLETE; POSITIONED FOR UK JV EXPANDED $800M HIGH QUALITY UK HOSPITAL PORTFOLIO Leading hospital operator relationships 13 406 100% Properties Beds Occupancy ~70% 22 Yr Triple Net Greater London WALE Leases Concentration 9
Slide 11: Evolution of Asset Management Platform
EVOLUTION OF ASSET MANAGEMENT PLATFORM DUE TO THE GROWTH HISTORICAL CHART OF AUM AND OWNERSHIP OF THE GLOBAL ASSET $9B $8.5B 100% MANAGEMENT $8B $7.8B 90% 73% $6.5B PLATFORM OVER THE $7B 70% $3.6B 80% $6B 61% $3.4B 70% PAST 5 YEARS, TOTAL $5B $4.1B $4.1B 60% $2.5B 56% 57% 50% AUM HAS INCREASED $4B $
Slide 12: Significant Value Creation in Global Management Platform
SIGNIFICANT VALUE CREATION IN GLOBAL MANAGEMENT PLATFORM BASE FEES CAGR OF ~29% DRIVEN BY AUM GROWTH POTENTIAL FOR FURTHER $200M NAV GROWTH $5.0B $100.M $5,500M $90.M $5,000M $125M $80.M $4.3B $4,500M $70.M $75M $4,000M $60.6M $60.M $3,500M $3.3B $50.M $3,000M $38.9M $33.7M $725M $34.1M $40.M $2,500
Slide 13: Epworth Geelong Health Precinct Drives +$1B Development Pipeline
EPWORTH GEELONG HEALTH PRECINCT DRIVES +$1B DEVELOPMENT PIPELINE $552M DEVELOPMENT PROJECT EXPANDS RELATIONSHIP WITH KEY OPERATOR AND DRIVES SIGNIFICANT VALUE CREATION Project Summary 100% 20 yr Occupancy WALE Building on its 20-plus year relationship with Epworth, one of Australia’s largest not-for
Slide 14: Investment Credit Grade Metrics Achieved: Positioned for Growth
INVESTMENT CREDIT GRADE METRICS ACHIEVED: POSITIONED FOR GROWTH Target LTV of ~40% Proportionate Net Debt/EBITDA Bridge (0.26x) (1.30x) Forecast 52.1% 49.6% 49.8% 49.6% 48.2% 42.0% 8.27x 40.3% 44.3% 43.8% 43.6% 6.71x 43.1% 42.5% 35.7% 34.5% Q1 21 Q2 21 Q3 21 Subsequent Tranche F UK JV & Dev't & Even
Slide 15: Business Model
BUSINESS MODEL • WALE: 14.1 Years / Occupancy: 96.9% SPNOI (Levered) +5.8% • Inflation Indexed Leases: 76% • Fee Bearing Capital*: $8.7B Asset Management +3.6% • Target Capital Commitments: $12.2B Development Accretion • Committed Developments: $339M +0.3% • Development Yield: 100bps spread ~10% Ann
Slide 16: Financial Highlights
FINANCIAL HIGHLIGHTS 15
Slide 17: Financial Dashboard
FINANCIAL DASHBOARD As Reported Normalized AFFO/unit (5) $0.88/unit $0.92/unit LTV (6)/ 43.8% / 49.8% ~40%/~45% Proportionate LTV NAV (7) $13.60/unit ~$14/unit Accretive JV Debt Developments Deployment Repayment 16
Slide 18: Proportionate Income Statement
PROPORTIONATE INCOME STATEMENT 18.2% GROWTH IN YOY AFFO UNDERPINNED BY For the Quarter Ended September 30 43.5% GROWTH IN C$M 2020 2021 % change MANAGEMENT FEES Net Operating Income 60.0 64.1 6.8% Growth underpinned by 34% Management Fee Income 11.0 15.8 43.5% increase in base fees Interest Income 0
Slide 19: Proportionate Balance Sheet
PROPORTIONATE BALANCE SHEET ~11% NAV PER UNIT GROWTH DRIVEN BY IMPROVED PROPERTY Net acquisitions of $400M & VALUATIONS ~$375M fair value gain ~$450M 2021 Equity Issuance ~11% -770 bp 3.3% NAV/Unit Growth Proportionate WAIR (15% Constant Leverage Currency) 18
Slide 20: Significant Value Creation in Global Asset Manager
SIGNIFICANT VALUE CREATION IN GLOBAL ASSET MANAGER Available AUM NWH Stabilized $8.7B OF ACTIVE Status ($B) Capacity ($B) Ownership Term Fees ($M) GLOBAL CAPITAL Active Australian Core Active $3.4 $1.3 30% Perpetuity $20 COMMITMENTS Hospital JV DRIVING SIGNIFICANT Vital Active $2.4 Open 26% Perpetui
Slide 21: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 15 YEAR PERIOD, THE REIT’S NOI WEIGHTED FOREIGN EXCHANGE INDEX HAS REMAINED RELATIVELY STABLE RENTAL INDEXATION ACTS AS NATURAL CURRENCY HEDGE PORTFOLIO SECURED WITH LOCAL CURRENCY DEBT WHEREVER POSSIBLE TO MINIMIZE FX RISK • Canada: FX • Europe: FX volatili
Slide 22: Global Healthcare Trends
GLOBAL HEALTHCARE TRENDS S NORTHWEST
Slide 23: Global Healthcare Market
GLOBAL HEALTHCARE MARKET Trillion Annual Global Healthcare Spend ($US) 10.4% Global Healthcare Expenditure (% GDP) 4-7% Annual Growth ; $ Ss NORTHWEST HEALTHCARE PROPERTIES
Slide 24: Trends Driving Global Healthcare
TRENDS DRIVING GLOBAL HEALTHCARE 1. Population growth Aging Population 2. Aging population 3. Increase in obesity, addictions 4. Growing middle class in emerging markets 5. Increase in urban migration 1. Consolidation Consolidation 2. Rise in health awareness and spending 3. Higher quality / value c
Slide 25: Healthcare Trends Impact on Healthcare Real Estate
HEALTHCARE TRENDS IMPACT ON HEALTHCARE REAL ESTATE HEALTHCARE TRENDS are driving real estate opportunities. Outpatient / Increased Aging Operator Increasing Urbanization funding population home care consolidation asset size needs Limited Positive Positive Positive Positive Positive Hospitals impact
Slide 26: Investment Activity
INVESTMENT ACTIVITY 25
Slide 27: Consolidated Investment Activity
CONSOLIDATED INVESTMENT ACTIVITY 2021 YTD NORMAL COURSE TRANSACTIONS TRANSACTION TYPE REGION C$M Netherlands JV Disposition NL 24 UNITED KINGDOM Netherlands MOB Acquisition NL 176 Life Sciences Asset Acquisition NL 24 Vital Acquisition Acquisition AUS 30 AUSTRALIA GERMANY Australian Unity M&A AUS 12
Slide 28: Committed Developments
COMMITTED DEVELOPMENTS • ~$339.0M (fully consolidated; $127.9M proportionate) of committed low risk development & WITH A TRACK expansions in Australasia, Europe, Brazil and Canada to be funded through a combination of existing resources and property financing RECORD OF $264.3M ($66.4M proportionat
Slide 29: Portfolio Overview
PORTFOLIO OVERVIEW 28
Slide 30: Asset Mix by Region and Segment
ASSET MIX BY REGION AND SEGMENT ON A PROPORTIONATE PROPORTIONATE NOI DIVERSIFICATION BASIS HOSPITALS Q3 2021 Q3 2021 ACCOUNT FOR 58% OF Canada Hospital and MOB Australasi 25% Healthcare NET OPERATING a 23% 27% Facilities Q3 2020 Q3 2020 28% INCOME 42% REGIONS ASSET MIX 47% 53% INCREASING FOCUS 58% O
Slide 31: Strategic Relationships and Tenant Diversification
STRATEGIC RELATIONSHIPS AND TENANT DIVERSIFCATION STRATEGIC RELATIONSHIPS ALLOWING FOR BEST- TOP 10 TENANTS BY GROSS RENT(9) IN-CLASS PERFORMANCE TENANT REGION % GROSS RENT • Alberta Health Services (6 Locations): Largest provincial 1 healthcare provider to 4.3 M Healthscope Limited 14.9% Albertans
Slide 32: Case Study – Epworth Eastern Hospital, Melbourne
CASE STUDY – EPWORTH EASTERN HOSPITAL, MELBOURNE NON‐FOR‐PROFIT PRIVATE HEALTHCARE GROUP THAT RAISES FUNDS TO PURCHASE ADVANCED MEDICAL EQUIPMENT, NorthWest has supported Epworth over 15+ years with expansion opportunities, advice and capital. Developments FUND RESEARCH AND have added to the quality
Slide 33: Investment Opportunity
INVESTMENT OPPORTUNITY 32
Slide 34: Northwest Overview
NORTHWEST OVERVIEW GLOBAL HEALTHCARE REAL ESTATE INVESTMENT PARTNER Global Dynamic Capital Capital Relationships Allocation Accretive Strategic Acquisition Opportunities NWH.UN Operator Partnerships Regional LISTED Brownfield Operating Development Platforms TSE Opportunities Healthcare Long Term Pre
Slide 35: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AFFO Multiple 20.0x AT A DISCOUNT TO $17.85 $17.84 ITS PEERS ON AN 15.0x $16.33 AFFO MULTIPLE BASIS $13.44 10.0x 19.4x 19.4x 17.8x 14.6x 5.0x 0.0x NWH.UN Canadian REITS Internationally Focused US Healthcare REITS (EV > $1BN) Canadian REITS $14.90 12.0% Implied
Slide 36: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly 40% Other Income/ Distribution Type 60% Return on Capital Unit Price (November 11, 2021) $13.44 Market Capitalization ~$2.9B Distribution Yield 5.9% 52-Week Trading Range $11.80-$13.65 Volume Weighted Avg. Price (VWAP)
Slide 37: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $13.44/unit as of November 11, 2021. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q3 2021 AFFO of $0.92/unit. 3. Based on total assets under management of NWH, Vital Trust on a fully consolidated basis including po
Slide 38: Contact Information
CONTACT INFORMATION NORTHWEST HEALTHCARE PROPERTIES REIT Paul Dalla Lana, Chairman & CEO pdl@nwhreit.com 416-366-2000 Ext. 1001 Shailen Chande, CFO shailen.chande@nwhreit.com 416-366-2000 Ext. 1002 37
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