Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — NorthWest Healthcare Properties Real Estate Investment Trust — Q2 2018 Earnings Presentation
49 slides from Vital Infrastructure Property Trust's earnings presentation, Aug 8, 2018
Slide 1: Q2 2018 Investor Update
Q2 2018 INVESTOR UPDATE August 8, 2018
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
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 through
Slide 4: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER DESPITE F/X Delivering stable results HEADWINDS, Stable per unit AFFO and NAV per unit DELIVERING STABLE Source currency adjusted cash SPNOI growth of 5.0% YOY; and, AND CONSISTENT Occupancy +10 bps QOQ to 96.4%; International portfolio occupancy above 98% RESULTS
Slide 5: Dashboard
DASHBOARD GROSS BOOK VALUE (3) NORMALIZED AFFO / UNIT +18.7% YoY (8.6x increase since inception) (8) 11.3% since inception(8) $4,940m $4,162m $0.94 $0.90 $572m $0.80 At inception Q2-2017 Q2-2018 At inception Q2-2017 Q2-2018 Annualized Normalized OCCUPANCY WEIGHTED AVERAGE LEASE EXPIRY International
Slide 6: 2018 YTD Summary of Investment Activity
2018 YTD 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 Acquired the 2nd largest MOB in Berlin, Germany and two high quality MOBs in Kissingen and Wilhelmshaven, Germany, totaling $75M. Acquired t
Slide 7: Significant Value Creation in ANZ Manager
SIGNIFICANT VALUE CREATION IN ANZ MANAGER NORTHWEST MANAGES INSTITUTIONAL AUSTRALIAN AN A$4.0BN JV PLATFORM AUSTRALASIAN PLATFORM WITH AUM $429(*) $1,585 $2,000 > $4,000 (in $M) A$2.6BN OF FEE BEARING CAPITAL AND A 35% NWH ownership OWNERSHIP INTEREST % 100% 24.9% 30% 35% FUNDING IN PLACE TO 3rd par
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 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 10: 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 11: Recent Strategic Acquisitions and Initiatives in Australia - Continued
RECENT STRATEGIC ACQUISITIONS AND INITIATIVES IN AUSTRALIA - CONTINUED 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, together
Slide 12: Netherlands Expansion: A Natural Step into an Adjacent Market
NETHERLANDS EXPANSION: A Natural Step into an adjacent market NWH expanded its European footprint with two transactions in the Netherlands; an attractive healthcare real estate market in close proximity to Germany The Netherlands Assets The Netherlands acquisitions are comprised of two high qualit
Slide 13: Brazil: Continuing to Execute Major Market Strategy
BRAZIL: Continuing to execute major market healthcare infrastructure strategy Hospital Morumbi acquisition adds a 7th major market, AAA asset with Rede D’Or - Brazil’s largest private hospital operator Significant growth opportunity: Brazil Portfolio Population 200+ million Pro-Forma Existing Ho
Slide 14: Financial Overview
ANCIAL SOVERVIEW at _— - eS ee
Slide 15: Q2-18 Financial Dashboard
Q2-18 FINANCIAL DASHBOARD As Reported Normalized Target Track to management run rate and Deliver stable property operating Reflects completed and/or performance, cash flow and contracted investment and finance guidance distributions activity as well as normalized Completion of the committed
Slide 16: Financial Highlights - Profitability
FINANCIAL HIGHLIGHTS - PROFITABILITY POSITIVE OPERATING Q2-18 Q2-18 RESULTS IN LINE WITH As Reported Normalized MANAGEMENT NOI $65.3M $67.9M GUIDANCE FFO $24.6M $27.3M NORMALIZED RESULTS AFFO $24.4M $27.1M HAVE BEEN ADJUSTED W.A Units 120,552 120,858 Outstanding TO REFLECT THE IMPACT OF RECENTLY Ann
Slide 17: Financial Highlights - Capitalization
FINANCIAL HIGHLIGHTS - CAPITALIZATION Q1-18 Q2-18 Q2 2018 NAV/UNIT WAS As Reported As Reported ADVERSELY IMPACTED BY Gross Book Value $4,758.0M $4,940.1M A 5.0% DECREASE IN F/X Debt $2,213.7M $2,462.5M RATES ACROSS THE REIT’S Convertible PORTFOLIO Debentures $293.9M $293.4M Other $768,8M $793,8M NOT
Slide 18: 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 19: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 10 YEAR PERIOD, PORTFOLIO INDEX HAS REMAINED RELATIVELY IN-LINE WITH ITS BASE VALUE 101 101 RENTAL INDEXATION 95 95 ACTS AS NATURAL CURRENCY HEDGE 71 LOCAL CURRENCY PROPERTY / CORPORATE DEBT TO REDUCE INVESTMENT RISK FX Rate - Spot day Var. % 30-Jun-17 31-Ma
Slide 20: Portfolio Overview
P O RT F O L I O O V E RV I E W 19
Slide 21: Portfolio Overview
PORTFOLIO OVERVIEW $4.9Bn 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 7 PROPERTIES 1,037 TENANTS SP NOI Growth (9) 5.0% 2 TENANTS 7.6% SP NOI Growth (9) Occupancy 92.1% FITCH AAA+ RATED Occupancy TE
Slide 22: Portfolio Diversification
PORTFOLIO DIVERSIFICATION NOI DIVERSIFICATION TOP 10 TENANTS BY GROSS RENT (12) GEOGRAPHICALLY BY GEOGRAPHY (4) DIVERSIFIED Q2-18 % of Gross Tenant Region PORTFOLIO OF CORE Rent 1 HEALTHCARE REAL Rede D`Or 13.3% Q2-17 ESTATE ASSETS IN 2 STABLE AND GROWING REGIONS Healthe Care 3.8% 3 INTERNATIONAL Ep
Slide 23: Representative Investments
REPRESENTATIVE INVESTMENTS Rede D’Or Hospital Acurity Portfolio Median Portfolio The Netherlands Portfolio Wakefield, Bowen and Bad Kissingen and Portfolio Royston Wilhelmshaven IFOR and Santa Rotterdam and Brussum Helena Assets 2 Hospitals Assets 3 Hospitals Assets 2 post-acute clinics Assets 2 MOB
Slide 24: Accretive Development & Expansion Pipeline
ACCRETIVE DEVELOPMENT & EXPANSION PIPELINE ~$280M 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 – $211M of Australasian hospital expansions at Vital and NWAUS
Slide 25: Committed Accretive Development & Expansions – Australasia
COMMITTED ACCRETIVE DEVELOPMENT & EXPANSIONS – AUSTRALASIA 211M of committed development at a weighted yield of ~7%. NINE DEVELOPMENT $14M of stabilized net operating income (at 100% interest) PROJECTS TOTALLING $50M of potential development gains on completion (at 100% interest) ~$211M ARE CU
Slide 26: Strategy & Outlook
STRAFEGY & OUTLOOK Ss NORTHWEST
Slide 27: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AT A SIGNIFICANT DISCOUNT TO ITS PEERS ON AN AFFO MULTIPLE BASIS - Based on NWH.UN’s closing unit price of $11.48/unit as of August 07, 2018 and normalized AFFO/Unit of $0.90 per year ($0.22/unit for the quarter) - NWH.UN’s NAV is based on Q2 2018 of $11.50. 26
Slide 28: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly Distribution Type 100% Return of Capital in 2017 Unit Price $11.48 (August 07, 2018) Market Capitalization ~$1.4Bn Distribution Yield ~7.0% 52-Week Trading Range $11.50- $11.71 Volume Weighted Avg. Price (VWAP) (20-day
Slide 29: Investment Thesis
A P P E N D I X 1 INVESTMENT THESIS 28
Slide 30: 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 31: 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 external
Slide 32: 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 33: 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 34: Financial Metrics
A P P E N D I X 2 FINANCIAL METRICS 33
Slide 35: 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 36: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS GROSS BOOK VALUE (3) PORTFOLIO QUALITY Normalized GBV has increased from $4.2BN to $4.9.BN, a Portfolio quality improved – occupancy up to 96.4% with longer ~19% increase lease terms from ~11 years to ~12 years. SP NOI NAV / UNIT (7) Cash SP NOI in constant cur
Slide 37: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS FINANCIAL PROFILE CAPITALIZATION Q2 Normalized AFFOPU $0.22 and Payout Ratio ~89% Consolidated LTV (Incl. Converts) increased to 56.1% due to a highly transactional last two quarters CAPITAL RAISING CAPITAL MARKETS AND LIQUIDITY Total capital issuance of ~$143
Slide 38: Regional Portfolio Overviews
A P P E N D I X 3 REGIONAL PORTFOLIO OVERVIEWS 37
Slide 39: Portfolio Profile
PORTFOLIO PROFILE PORTFOLIO GLOBAL HEALTHCARE REAL ESTATE INFRASTRUCTURE COMPRISES 152 PROPERTIES TOTALING Canada Brazil Germany Vital Trust NWAUS Platform 10.6M SQUARE FEET Q1 2018 PF OF GLA IN FIVE COUNTRIES Number of 56 7 30 45 14 152 Properties STRONG OPERATING ~93% MOB & / ~25% MOB & / ~75% Hos
Slide 40: 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 92.1% occupancy and ~5.2 year WALE High qualit
Slide 41: 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 ~20.2 year WALE RORAIMA AMAPÁ Stable cash flow with long-term,
Slide 42: 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 95.7% occupancy and ~8.9 year WALE MECKLENBURG-VORPOMMERN Wil
Slide 43: 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 $1Bn in existing assets and a $89+ development pipeline of yields at ~6.0% on average. Epworth
Slide 44: 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 45: Management Biographies
A P P E N D I X 4 MANAGEMENT BIOGRAPHIES 44
Slide 46: 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 Paul Dalla Lana platform Founder of NWH & NWI REITs Ma
Slide 47: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $11.48/unit as of August 07, 2018. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q2-18 AFFO of $0.89/unit. 3. Based on total assets of NWH, Vital Trust on a fully consolidated basis including post-quarter acquisitio
Slide 48: 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 47
Slide 49: Slide 49
NorthWest Healthcare Properties Real Estate Investment Trust — Q2 2018 Earnings Presentation on 6ix