Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — Northwest Healthcare Properties Real Estate Investment Trust — Q3 2019 Earnings Presentation
46 slides from Vital Infrastructure Property Trust's earnings presentation, Nov 18, 2019
Slide 1: Q3 2019 Investor Update
Q3 2019 INVESTOR UPDATE November 18, 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: Global Healthcare Trends
GLOBAL HEALTHCARE TRENDS Ss NORTHWEST
Slide 4: Global Healthcare Market
GLOBAL HEALTHCARE MARKET Trillion Annual Global Healthcare Spend ($US) 10.4% Global Healthcare Expenditure (% GDP) 4-7% Annual Growth $ WA NORTHWEST
Slide 5: 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 $332B 3. Higher quality / v
Slide 6: 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 Outpatient Life Sciences Skilled Assisted Independent Rehab MOB Nursing/Aged
Slide 7: Healthcare Trends Impact on Healthcare Real Estate
HEALTHCARE TRENDS IMPACT ON HEALTHCARE REAL ESTATE HEALTHCARE TRENDS are driving positive effects in HEALTHCARE REAL ESTATE. 6
Slide 8: NWH Platform
NWH PLATFORM ) 1] | ins ih
Slide 9: Northwest Overview
NORTHWEST OVERVIEW Global capital relationships Accretive acquisition opportunities Regional operating platforms Healthcare precincts in urban locations NorthWest best in class approach Dynamic capital allocation Strategic Operator partnerships Brownfield development opportunities Long term indexed
Slide 10: Differentiated Strategy
DIFFERENTIATED STRATEGY SCALED $6.2Bn+ $3.6Bn of 3rd Party $1.6Bn Platform Fee Bearing Capital Un-deployed Capital 28% CAGR from 2015-2019 JV Partnership and Vital Trust Investment Target $10 Bn total commitments CASH FLOW STABILITY EMBEDDED GROWTH 97%+ 13.7 year 72%+ $402Mn Occupancy WALE Indexed D
Slide 11: Business Model
BUSINESS MODEL ▪ WALE: 13.7 Years / Occupancy: 97.1% SPNOI (Levered) +5.8% ▪ Inflation Indexed Leases: 72% Asset Management ▪ Committed Fee Bearing Capital: $3.6 Bn +3.0% ▪ Target Capital Commitments: $10 Bn Development Accretion ▪ Committed Developments: $402M +0.4% ▪ Development Yield: 100bps spre
Slide 12: Avenues for Future Growth
ee AVENUES FOR FUTURE GROWTH Through investment in new markets * Increased scale in aged care = Investment in new geographies that align with NorthWest's investment approach Through new operator partnerships in current geographies Through existing operator <Ceale anit leacoae partnerships opportunit
Slide 13: Quarterly Highlights
QUARTERLY HIGHLIGHTS 12
Slide 14: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER Stable and Improving Operating Results 0.92 2.0%/3.6% +97.1% Normalized SPNOI Growth: Occupancy AFFO/Unit CAD/Source Executing on Strategic Investment Priorities Investment Activity Financing Activity ACQUISITIONS ($M) 160 ~5.7% Cap rate $173M 120 Equity Financing 80 6.1% C
Slide 15: Quarterly Dashboard
QUARTERLY DASHBOARD As Reported Normalized Target AFFO/unit (5) $0.88/unit $0.92/unit +$1.00/unit LTV (6) 45.4% / 52.8% 45.4% / 52.8% <40% / <50% NAV (7) $11.84/unit ~$12.06/unit +$13.00/unit Occupancy / 97.1% 97.1% 97.1% WALE 13.7 years 13.7 years 13.7 years Portfolio Quality 14
Slide 16: Significant Value Creation in Global Asset Manager
SIGNIFICANT VALUE CREATION IN GLOBAL ASSET MANAGER Target Available TARGET $10BN OF GLOBAL AUM Capacity NWH Stabilized CAPITAL COMMITMENTS Status ($B) ($B) Ownership Term Fees ($M) Australian Core INCLUDING $3BN IN THE Active Hospital JV Active $3.4 $1.6 30% Perpetuity $20 NEAR TERM DRIVING Vital Ac
Slide 17: Financial Highlights - Profitability
FINANCIAL HIGHLIGHTS - PROFITABILITY Key Metrics (Reported) AFFO/Unit and Payout Ratio Normalized AFFO per Unit AFFO Payout Ratio 1.00 0.92 0.92 100% $69.8M NOI $ 26.5M FFO $31.3M AFFO 0.90 0.88 0.88 0.90 0.80 91% 90% 0.70 88% 0.60 87% 87% $0.88 0.50 150.230M 87% Payout AFFO/Unit 0.40 Units Ratio An
Slide 18: Financial Highlights - Capitalization
FINANCIAL HIGHLIGHTS - CAPITALIZATION Leverage trending lower Net Asset Value NAV ($,000) NAV/Unit 2,000 1,779 14 1,573 1,591 1,600 1,492 1,342 12 1,200 12.30 11.65 11.76 11.84 800 11.09 10 400 0 8 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Quarterly NAV / Unit Bridge The Canadian dollar appreciated by ~4% QoQ v
Slide 19: Balance Sheet Optimization and Regional Debt Strategy
BALANCE SHEET OPTIMIZATION AND REGIONAL DEBT STRATEGY DEBT MATURITY PROFILE (9) REGIONAL DEBT STRATEGIES ~$203M RCF refinanced post quarter with a 3 year maturity LTV (11) ~50% ~25% ~60% ~45% to 65% Market Interest ~3.5% ~4.0% ~2.0% ~3.0% Rates (12) Typical 25 years 12 years 50 years Interest Only A
Slide 20: Operating Metrics
OPERATING METRICS SP NOI INDEXATION SP NOI Growth YoY 100% 95.2% 94.9% 95.3% 95.1% 95.1% % in C$ % in source $ 4% 3.6% 3.1% 3.2% 80% 72.5% 71.9% 72.4% 72.8% 72.2% 3% 2.5% 1.8% 2.0% 2% 60% 1% 0.4% 40% 0% -1% 20% -0.9% -0.7% -2% 0% -3% -2.6% Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19
Slide 21: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 10 YEAR PERIOD, FOREIGN EXCHANGE INDEX HAS REMAINED IN-LINE WITH ITS BASE VALUE RENTAL INDEXATION ACTS AS NATURAL CURRENCY HEDGE LOCAL CURRENCY PROPERTY / CORPORATE DEBT TO REDUCE INVESTMENT RISK LTM Currency Impact NOI Var. % Weight QoQ YoY 6-Nov-19 Var. %
Slide 22: Portfolio Overview
PORTFOLIO OVERVIEW 21
Slide 23: Global Portfolio
GLOBAL PORTFOLIO $1.2B 57 6.4% $0.7B 35 5.7% GROSS ASSETS PROPERTIES CAP RATE GROSS ASSETS PROPERTIES CAP RATE 1.7% 92.2% 5.0 $6.2B 2.9% 97.1% 14.8 SP NOI OCCUPANCY YEAR WALE SP NOI TOTAL ASSETS OCCUPANCY YEAR WALE 13.7 97.1% $0.8B 8 7.0% WALE Occupancy $3.5B 71 5.5% GROSS ASSETS PROPERTIES CAP RATE
Slide 24: Asset Mix by Region and Segment
ASSET MIX BY REGION AND SEGMENT ON A PROPORTIONATE Proportionate NOI Diversification BASIS HOSPITALS ACCOUNT FOR 55% OF NET OPERATING INCOME INCREASING FOCUS ON HEALTHCARE INFRASTRUCTURE, INCLUDING ACUTE/POST ACUTE HOSPITALS AND RELATED BUILDINGS IN EACH OF ITS MARKETS Detailed Segment Breakdown AUS
Slide 25: Strategic Relationships and Tenant Diversification
STRATEGIC RELATIONSHIPS AND TENANT DIVERSIFCATION STRATEGIC RELATIONSHIPS ALLOWING FOR BEST- TOP 10 TENANTS BY GROSS RENT(10) IN-CLASS PERFORMANCE TENANT REGION % GROSS RENT ✓ Alberta Health Services (6 Locations): 1 Largest provincial healthcare provider Healthscope Limited 15.6% to 4.3 M Albertans
Slide 26: Healthscope – Strategic Transaction
HEALTHSCOPE – STRATEGIC TRANSACTION CORE HEALTHCARE INFRASTRUCTURE IN MAJOR MARKETS NORWEST ▪ Transformational 11 property, $1.2BN transaction solidifies the REIT as the leader in Australian healthcare real estate ▪ Highly complimentary to NWH’s existing portfolio ▪ Deepens relationship with Austral
Slide 27: Accretive Development & Expansion Pipeline
ACCRETIVE DEVELOPMENT & EXPANSION PIPELINE ✓ ~$402M (fully consolidated; $165M proportionate) of committed low risk development & WITH A TRACK RECORD expansions in Australasia, Brazil and Canada to be funded through a combination of existing OF COMPLETING MORE resources and property financing THAN $
Slide 28: Case Study #1 – Epworth Eastern Hospital, Melbourne
CASE STUDY #1 – 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 qual
Slide 29: Case Study #2 – Median, Germany
CASE STUDY #2 – MEDIAN, GERMANY Market ~230,000 Leader Patients p.a. ~€940 M 120 LARGEST PRIVATE Revenue Facilities REHABILITATION PROVIDER WITH 120+ ~18,200 ~15,000 Beds/Places Employees FACILITIES ACROSS GERMANY Supporting ongoing MEDIAN Partnership is foundation for MEDIAN seeking reliable real e
Slide 30: Case Study #3 – Rede D'Or, Brazil
CASE STUDY #3 – REDE D’OR, BRAZIL LARGEST PRIVATE HOSPITAL OPERATOR IN BRAZIL WITH 39 HOSPITALS AND 5,900 BEDS Top 5 Global Healthcare Market Top Facilities ‘AAA‘ Strategy BACKED BY GLOBAL ▪ Third largest private healthcare market: $180BN p.a. ▪ Major acute-care assets healthcare spending (9% of GDP
Slide 31: Investment Opportunity
INVESTMENT OPPORTUNITY 30
Slide 32: Focused Healthcare Real Estate Investment Partner
TORONTO Focused Healthcare Real Estate Investment Partner Global scale, local relationships Partner of choice for leading operators in each market we invest Deep healthcare real estate expertise AUCKLAND 200+ healthcare professionals based in 3 of the largest global healthcare markets S Ã O PA U L O
Slide 33: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AT SIGNIFICANT DISCOUNT TO ITS PEERS ON AN AFFO MULTIPLE BASIS $12.00 $12.00 - Based on NWH.UN’s closing unit price of $12.00/unit as of November 14 2019, and normalized AFFO/Unit of $0.92 per year; NWH.UN’s NAV is based on Q3-19 of $11.84. 32
Slide 34: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly 55% Capital Gains/ Distribution Type 45% Return on Capital Unit Price (November 14, 2019) $12.00 Market Capitalization ~$1.6Bn Distribution Yield 6.7% 52-Week Trading Range $9.27- $12.35 Volume Weighted Avg. Price (VWA
Slide 35: Regional Portfolio Overviews
APPENDIX 1 REGIONAL PORTFOLIO OVERVIEWS 34
Slide 36: Portfolio Profile
PORTFOLIO PROFILE PORTFOLIO COMPRISES GLOBAL HEALTHCARE REAL ESTATE INFRASTRUCTURE 171 PROPERTIES TOTALING 14.0M Q3 2019 Canada Brazil Europe Vital Trust NWAUS Platform* SQUARE FEET OF GLA IN SIX COUNTRIES Number of 57 8 35 45 26 171 STRONG OPERATING Properties FUNDAMENTALS WITH 86% MOB & 21% MOB &
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 57 properties comprising GLA of 3.6 million sf and NT 1,067 tenants ◼ 92.2% occupancy and ~5.0 year WALE NU ⚫ High qualit
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 Janeiro RORAIMA ◼ 100.0% occupancy and 19.6 year WALE AMAPÁ ⚫ Stable cash flow with long-term, t
Slide 39: Europe: Strategically Located MOB Assets
EUROPE: STRATEGICALLY LOCATED MOB ASSETS INVESTMENT AND MARKET OVERVIEW ⚫ High quality MOB assets located in the major markets including The Netherlands SCHLESWIG- Berlin, Hamburg, Frankfurt, Ingolstadt, Leipzig and Rotterdam 2 HOLSTEIN ◼ 97.1% occupancy and ~14.8 year WALE MECKLENBURG-WESTERN POMER
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 ~$1.9Bn in existing assets ✓ Portfolio of 26 Properties of ~2.8M Square Feet Epworth Victoria Parade
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 largest listed healthcare real estate owner with 26 private hospitals, 10 MOBs, 5 aged care assets and 4 development lots NO
Slide 42: Management Biographies
APPENDIX 2 MANAGEMENT BIOGRAPHIES 41
Slide 43: Global Platform with Regional Capability and Expertise
GLOBAL PLATFORM WITH REGIONAL CAPABILITY AND EXPERTISE CORPORATE MANAGEMENT REGIONAL OPERATING PLATFORM FULLY ESTABLISHED, SCALABLE REGIONAL TEAMS ⚫ Founder of NWH & NWI WITH EXPERTISE IN Paul Dalla Peter Riggin ⚫ Leads NWH’s real REITs HEALTHCARE PROPERTY Lana COO & MD estate operations and ⚫ Large
Slide 44: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $12.00/unit as of November 14, 2019. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q3-19 AFFO of $0.92/unit. 3. Based on total assets of NWH, Vital Trust on a fully consolidated basis including post-quarter acquisit
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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