Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — Northwest Healthcare Properties Real Estate Investment Trust — Q1 2021 Earnings Presentation
49 slides from Vital Infrastructure Property Trust's earnings presentation, May 13, 2021
Slide 1: Q1 2021 Investor Update
Q1 2021 INVESTOR UPDATE May 13, 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 164% (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: Healthcare Real Estate in the Spotlight
HEALTHCARE REAL ESTATE IN THE SPOTLIGHT LTM RELATIVE TOTAL SHAREHOLDER RETURN PROJECTED OPERATING PERFORMANCE BY SECTOR 140% ’20E – ’24E GSA NOI Growth Projections 108.9 % 6.2% 6.2% 6.0% Indexed Total Return 100% 4.1% 3.6% 60% 47.0 % 2.2% 43.4 % 33.1 % 1.3% 1.1% 27.8 % 20% 24.9 % Office Mall Industr
Slide 6: Defensive Underlying Portfolio
DEFENSIVE UNDERLYING PORTFOLIO Operating Metrics Diversification 97% 14 yr 7 >2,000 Portfolio Occupancy WALE Countries Tenants Diverse tenants encompass 73% hospitals operators, rehabilitation clinics, life Inflation Indexed sciences and individual Rents STABLE practitioners OPERATING FUNDAMENTALS >
Slide 7: COVID-19: Operational KPIs
COVID-19: OPERATIONAL KPIs Rent Collection Business Impact 98.1% 100% Q4 2020 Cash 98.6% Collections Properties Open Q1 2021 Cash & Total Collections 98.2% >80% Q4 2020 Total Tenants with Collections Government Support COVID-19: STRONG KPIs • Enhanced government funding to • Reversal of decline in p
Slide 8: 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 9: 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 $7.8B 100% $8B 90% MANAGEMENT 75% 73% $6.5B 80% $7B 70% $3.4B PLATFORM OVER THE $6B 61% 70% 56% 60% PAST 5 YEARS, TOTAL $5B $4.1B $4.1B $2.5B 50% AUM HAS INCREASED $4B $3.0B $1.1B $
Slide 10: Scaling Global Asset Management Platform: UK JV
SCALING GLOBAL ASSET MANGEMENT PLATFORM: UK JV TARGETING NEW Active Asset Management JV Funds Formation $1.75B+ JOINT VENTURE • Tenant diversification: Potential to diversify • Attractive seed portfolio: Attractive current tenant relationships through NMC ~$620M seed portfolio. Represents almost adm
Slide 11: Achieving Scale in Europe
ACHIEVING SCALE IN EUROPE PORTFOLIO OVERVIEW & GROWTH Asset Mix by % of Total AUM Historical AUM ($M) 1,663 15% 479% 45% 773 40% 599 268 MOBs Hospitals Clinics 2017 2018 2019 2020 HIGH QUALITY PORTFOLIO KEY RELATIONSHIPS OPERATOR CAPITAL EQUITY DEBT 10
Slide 12: Focus on ESG Initiatives
FOCUS ON ESG INITIATIVES OVERVIEW KEY PRIORITY FOR NEW CAO • The REIT’s singular focus on healthcare real estate has • The REIT recently created the role of Chief placed ESG-related issues at the fore since our Administrative Officer: inception: • Overseeing the organization’s global HR, IT, • Provi
Slide 13: Strategic Transaction: Australian Unity
STRATEGIC TRANSACTION: AUSTRALIAN UNITY CORE HEALTHCARE INFRASTRUCTURE IN MAJOR MARKETS • The REIT, together with a capital partner, has entered into an option agreement to acquire a strategic 16% stake of the units in Australian Unity Healthcare Property Trust (AUHPT) • AUHPT is a high quality $2.4
Slide 14: Investment Credit Grade Metrics Achieved: Positioned for Growth
INVESTMENT CREDIT GRADE METRICS ACHIEVED: POSITIONED FOR GROWTH LTV Trend Proportionate Net Debt/EBITDA Bridge (0.23x) (0.31x) (1.21x) 57.6% 57.0% 55.9% 56.4% Forecast 52.1% 50.7% 49.0% 52.6% 49.5% 49.6% 43.6% 48.0% 8.90x 8.67x 44.3% 7.15x 43.2% 41.8% 35.6% Q1-20 Q2-20 Q3-20 Q4-20 Q1 21 Series E Ser
Slide 15: Global Debt & Liquidity Strategy
GLOBAL DEBT & LIQUIDITY STRATEGY 2021 DEBT MATURITIES $0.6B OF DEBT IS 2021 Debt Maturities $629M Comments MATURING IN 2021, Includes Series E Debentures of which $61m were converted 35% OF WHICH HAS Completed Repayment ($200M) to equity ALREADY BEEN REPAID Completed Refinancing ($23M) Canadian mort
Slide 16: Global Healthcare Trends
GLOBAL HEALTHCARE TRENDS Ss NORTHWEST
Slide 17: Global Healthcare Market
GLOBAL HEALTHCARE MARKET aliiveya Annual Global Healthcare Spend ($US) 10.4% Global Healthcare Expenditure (% GDP) 4-7% yNalalere|| Growthi $ SN NORTHWEST HEALTHCARE PROPERTIES
Slide 18: 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 19: 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 20: NWH Platform
NWH PLATFORM ) 1] | ins ih
Slide 21: Differentiated Strategy
DIFFERENTIATED STRATEGY SCALED $7.7B+ $8.6B $3.9B Platform Fee Bearing Capital* Un-deployed Capital 22% CAGR from 2015-2021 JV Partnerships and Vital Trust To be deployed in EUR and ANZ Investment CASH FLOW STABILITY EMBEDDED GROWTH 97%+ 14.3 Year 76% $365M Occupancy WALE Indexed Development Pipelin
Slide 22: Business Model
BUSINESS MODEL • WALE: 14.3 Years / Occupancy: 97.0% SPNOI (Levered) +5.8% • Inflation Indexed Leases: 76% • Fee Bearing Capital*: $8.6B Asset Management +3.6% • Target Capital Commitments: $12.1B Development Accretion • Committed Developments: $365M +0.4% • Development Yield: 100bps spread +10% Ann
Slide 23: Financial Highlights
FINANCIAL HIGHLIGHTS 22
Slide 24: Financial Dashboard
FINANCIAL DASHBOARD As Reported Normalized AFFO/unit (5) $0.83/unit $0.92/unit LTV (6)/ 44.3% / 52.1% ~40%/~45% Proportionate LTV $12.77/unit ~$14/unit NAV (7) Accretive JV Debt Developments Deployment Repayment 23
Slide 25: Proportionate Income Statement
PROPORTIONATE INCOME STATEMENT ~1% AFFO PER UNIT GROWTH DRIVEN BY SPNOI GROWTH, INCREASED MANAGEMENT FEES AND REDUCED INTEREST Includes European & Australian JV Fees EXPENSE BUT PARTIALLY OFFSET BY HIGHER Deleveraging through equity issuance and reduced WAIR AVERAGE UNITS OUTSTANDING Q1 2021 include
Slide 26: Proportionate Balance Sheet
PROPORTIONATE BALANCE SHEET ~2% NAV PER UNIT GROWTH DRIVEN BY IMPROVED PROPERTY VALUATIONS ~$180M Fair Value Gain +$200M 2021 Equity Issuance 3.4% 4.5 yrs +5.4% WAIR WATM Portfolio Growth 25
Slide 27: NAV Growth
NAV GROWTH HISTORICAL NAV TREND NAV/UNIT BRIDGE $1.07 ($0.49) 28% CAGR ($0.26) $0.17 ($0.08) 2,492 2,359 2,256 $12.77 $12.94 $12.53 1,312 1,391 866 2016 2017 2018 2019 2020 Q1 2021 Q1-20 IPP FX Transaction Other Q1-21 FX PF NAV/Unit NAV/Unit revaluation costs NAV/Unit Access to Value Creation WACR S
Slide 28: Significant Value Creation in Global Asset Manager
SIGNIFICANT VALUE CREATION IN GLOBAL ASSET MANAGER Available AUM NWH Stabilized $8.6B OF GLOBAL Status ($B) Capacity ($B) Ownership Term Fees ($M) CAPITAL Active Australian Core Active $3.5 $1.4 30% Perpetuity $20 COMMITMENTS Hospital JV DRIVING SIGNIFICANT Vital Active $2.1 Open 26% Perpetuity $25
Slide 29: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 15 YEAR PERIOD, THE REIT’S NOI WEIGHTED FOREIGN EXCHANGE INDEX HAS REMAINED RELATIVELY STABLE RENTAL INDEXATION ACTS AS NATURAL CURRENCY HEDGE PORTFOLIO SECURED WITH LOCAL CURRENCY DEBT WHEREVER POSSIBLE TO MINIMIZE FX RISK • Canada: FX • Europe: FX volatili
Slide 30: Investment Activity
INVESTMENT ACTIVITY 29
Slide 31: Consolidated Investment Activity
CONSOLIDATED INVESTMENT ACTIVITY 2020 TRANSACTIONS EUROPEAN AUM ($M) 1,663 TRANSACTION TYPE REGION C$M 479% Clinics & Life Sciences Acquisition GER/NL 88 773 Hospitals & Life Sciences Acquisition AUS 209 599 UK Hospital Portfolios Acquisition UK 620 268 Non-Core Aged Care Asset Disposition AUS 200 S
Slide 32: Accretive Development & Expansion Pipeline
ACCRETIVE DEVELOPMENT & EXPANSION PIPELINE • ~$365.0M (fully consolidated; $128.1M 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 ▪ $298.1M
Slide 33: Portfolio Overview
PORTFOLIO OVERVIEW 32
Slide 34: Asset Mix by Region and Segment
ASSET MIX BY REGION AND SEGMENT ON A PROPORTIONATE PROPORTIONATE NOI DIVERSIFICATION BASIS HOSPITALS Q1 2021 Q1 2021 ACCOUNT FOR 60% OF Australasia Canada Hospital and MOB 26% Healthcare NET OPERATING 30% 24% Facilities Q1 2020 30% Q1 2020 INCOME 40% REGIONS 50% ASSET MIX 50% INCREASING FOCUS 60% ON
Slide 35: 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 15.3% Albertans
Slide 36: Case Study #1: London Portfolio Acquisition
CASE STUDY #1: LONDON PORTFOLIO ACQUISITION THE LONDON Transaction Overview PORTFOLIO • Transaction overview: On August 21st, the REIT completed the acquisition of four high quality hospitals located in the Greater London Area for $452M (£260M; the “London Portfolio”) at a 6.2% initial ACQUISITION S
Slide 37: Case Study #2: European Joint Venture
CASE STUDY #2: EUROPEAN JOINT VENTURE VENDING WHOLLY OWNED ASSETS INTO THE JV GENERATES PROMOTED RETURNS WHOLLY OWNED NWH CAPITAL PLATFORMS German Total 13 assets €305M $473M 70% Sold to European Joint Venture Clinics +8 assets +$278M Status: ✓ Closed Q3 • Capital generated: $150M of Metrics net pro
Slide 38: Case Study #3: AUS JV Expansion & HSO Acquisition
CASE STUDY #3: AUS JV EXPANSION & HSO ACQUISITION Australasian JV Expansion $1.6B (JV expansion) $1.9B deployed between into seed assets, HSO, $1.8B $1.8B (initial $1.5 B and Recent acquisitions (committed commitment) expansion) $1.9 B Target 65% LTV $5.2B JV including available Deployed capacity an
Slide 39: Case Study #4 – Epworth Eastern Hospital, Melbourne
CASE STUDY #4 – 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 40: Case Study #5 – Australasian Portfolio Simplification
CASE STUDY #5 – AUSTRALASIAN PORTFOLIO SIMPLICATION DIVESTING WHOLLY OWNED AUSTRALASIAN ASSETS SIMPLIFIED PLATFORM WHOLLY OWNED NWH CAPITAL PLATFORMS Total 12 assets $480M $422M sales to capital platforms and 3rd Parties Vital +3 assets +$50M ✓ Status: Closed AUS JV +5 assets +$263M ✓ Status: Closed
Slide 41: Case Study #6 – Median, Germany
CASE STUDY #6 – 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 42: Case Study #7 – Rede D'Or, Brazil
CASE STUDY #7 – 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 2020 IPO VALUED THE • Third largest private healthcare market: $180B p.a. • Major acute-care assets healthcare spending (9% of G
Slide 43: Investment Opportunity
INVESTMENT OPPORTUNITY 42
Slide 44: 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 45: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AT A DISCOUNT TO ITS PEERS ON AN AFFO MULTIPLE BASIS $14.25 - Based on NWH.UN’s closing unit price of $13.08/unit as of March 12, 2021, and normalized AFFO/Unit of $0.92 per year; NWH.UN’s NAV/unit is based on Q1 2021 of $12.77. 44
Slide 46: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly 40% Other Income/ Distribution Type 60% Return on Capital Unit Price (May 13, 2021) $13.08 Market Capitalization ~$2.6B Distribution Yield 6.1% 52-Week Trading Range $8.58-$13.47 Volume Weighted Avg. Price (VWAP) (20-d
Slide 47: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $13.08/unit as of May 12, 2021. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q1 2021 AFFO of $0.92/unit. 3. Based on total assets under management of NWH, Vital Trust on a fully consolidated basis including post-qu
Slide 48: 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 47
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Northwest Healthcare Properties Real Estate Investment Trust — Q1 2021 Earnings Presentation on 6ix