Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — NorthWest Healthcare Properties Real Estate Investment Trust — Q3 2018 Earnings Presentation
48 slides from Vital Infrastructure Property Trust's earnings presentation, Nov 9, 2018
Slide 1: Q3 2018 Investor Update
Q3 2018 INVESTOR UPDATE November 9, 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 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 4.0% YOY Occupancy of 96.3%; International portfolio occupancy above 98% PREVIOUSLY ANNOUNCED Executing
Slide 5: Dashboard
DASHBOARD GROSS BOOK VALUE NORMALIZED AFFO / UNIT +3.0% YoY (8.2x increase since inception) 10.0% since inception $4,680m $4,545m $0.96 $0.88 $572m $0.80 At inception Q3-2017 Q3-2018 At inception Q3-2017 Q3-2018 Annualized Normalized OCCUPANCY WEIGHTED AVERAGE LEASE EXPIRY International portfolio at
Slide 6: 2018 YTD Summary of Investment Activity
2018 YTD SUMMARY OF INVESTMENT ACTIVITY Significant transactional activity in 2018 Q2 Q3 Acquired the 2nd largest MOB in Berlin, Germany and two high quality Acquired one AAA asset in São Paulo, Brazil in Q3-2018 for $88M. MOBs in Brunssum and Rotterdam, the Netherlands totalling $165M. Acquired dev
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 $453(*) $1,546 $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 accomplishments 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 strengthe
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: Asset Profile: Hospital Morumbi
ASSET PROFILE: HOSPITAL MORUMBI 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 Existing Hospital Pro-Forma Brazil economic improvement and income
Slide 13: Financial Overview
FINANCIAL OVERVIEW 12
Slide 14: Q3-18 Financial Dashboard
Q3-18 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 15: Financial Highlights - Profitability
FINANCIAL HIGHLIGHTS - PROFITABILITY POSITIVE OPERATING Q3-18 Q3-18 RESULTS IN LINE WITH As Reported Normalized MANAGEMENT NOI $65.2M $64.3M GUIDANCE FFO $24.5M $26.8M NORMALIZED RESULTS AFFO $24.3M $26.6M HAVE BEEN ADJUSTED W.A Units 120,955 121,052 Outstanding TO REFLECT THE IMPACT OF RECENTLY Ann
Slide 16: Financial Highlights - Capitalization
FINANCIAL HIGHLIGHTS - CAPITALIZATION Q2-18 Q3-18 Q3 2018 NAV/UNIT WAS As Reported As Reported ADVERSELY IMPACTED BY Gross Book Value $4,940.1M $4,679.6M A 3.9% DECREASE IN F/X Debt $2,462.5M $2,299.0M RATES ACROSS THE REIT’S Convertible PORTFOLIO $293.4M $295.3M Debentures Other $546.3M $564.0M Net
Slide 17: 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 ~$80M at 7.1% WAIR; offering attractive interest rate saving opportunity Refinance ~$40M, 7.25% - 2018 par call convert
Slide 18: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE FORECAST FX CHANGES Consensus Forecast OVER A 10 YEAR 150 Currency Q3-18 Q4-19E vs. CAD BRL 0.3226 0.3397 5.31% PERIOD, PORTFOLIO 140 AUD 0.9368 0.9300 -0.73% INDEX HAS REMAINED 130 NZD EUR 0.8585 1.5072 0.8680 1.5376 1.11% 2.02% RELATIVELY IN-LINE 120 CAD 1.0000 1
Slide 19: Portfolio Overview
P O RT F O L I O O V E RV I E W 18
Slide 20: Portfolio Overview
PORTFOLIO OVERVIEW $4.7Bn 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) 0.7% SP NOI Growth (9) 7.7% 1,037 TENANTS 8 TENANTS Occupancy 91.7% FITCH AAA+ RATED Occupancy 10
Slide 21: Portfolio Diversification
PORTFOLIO DIVERSIFICATION NOI DIVERSIFICATION TOP 10 TENANTS BY PERCENTAGE OF GROSS RENT (12) GEOGRAPHICALLY BY GEOGRAPHY (4) DIVERSIFIED Q3-18 % of Gross Tenant Region PORTFOLIO OF CORE Rent 1 HEALTHCARE REAL Rede D`Or 12.1% ESTATE ASSETS IN Q3-17 2 STABLE AND GROWING Healthe Care 3.6% REGIONS 3 IN
Slide 22: Recent Developments
RECENT DEVELOPMENTS Healthscope $2.0 BN Institutional Significant European Transaction Hospital Morumbi Joint Venture Acquisition Pipeline Complete Complete Compete Complete Pending Completion NWH with Vital took a ~10% ~€100M of near term stake in Healthscope (HSO: Size 233k Square Feet Size A$2.0B
Slide 23: Accretive Development & Expansion Pipeline
ACCRETIVE DEVELOPMENT & EXPANSION PIPELINE ~$266M 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 – $201M of Australasian hospital expansions at Vital and NWAUS
Slide 24: Committed Accretive Development & Expansions – Australasia
COMMITTED ACCRETIVE DEVELOPMENT & EXPANSIONS – AUSTRALASIA SIX DEVELOPMENT $200M of committed development at a weighted yield of 6.5%. PROJECTS TOTALLING $13M of stabilized net operating income (at 100% interest) ~C$200M ARE CURRENTLY ONGOING Million of C$ Projects Est. Completion Project Cost C
Slide 25: Strategy & Outlook
STRAFEGY & OUTLOOK Ss NORTHWEST
Slide 26: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AFFO Multiple 20.0x AT A SIGNIFICANT $16.10 18.3x DISCOUNT TO ITS $13.75 15.0x 15.6x PEERS ON AN AFFO $10.78 $11.43 13.0x MULTIPLE BASIS 10.0x 12.3x 5.0x 0.0x NWH.UN Canadian REITS Internationally Focused US Healthcare REITS (EV > $1BN) Canadian REITS (Top 5) 4
Slide 27: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly Distribution Type 100% Return of Capital in 2017 Unit Price $10.78 (November 5, 2018) Market Capitalization ~$1.3Bn Distribution Yield ~7.4% 52-Week Trading Range $10.50- $11.71 Volume Weighted Avg. Price (VWAP) (20-da
Slide 28: Investment Thesis
A P P E N D I X 1 INVESTMENT THESIS 27
Slide 29: 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 30: 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 31: 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 32: 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 33: Financial Metrics
A P P E N D I X 2 FINANCIAL METRICS 32
Slide 34: 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 35: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS GROSS BOOK VALUE PORTFOLIO QUALITY Normalized GBV has increased from $4.5BN to $4.7BN, Portfolio quality improved – occupancy up to 96.3% with longer a ~5% increase lease terms from ~11 years to ~12 years. SP NOI NAV Cash SP NOI in source currency increased 2.9
Slide 36: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS FINANCIAL PROFILE CAPITALIZATION Q3 Normalized AFFOPU $0.88 and Payout Ratio ~90% Consolidated LTV (Incl. Converts) decreased QoQ by 40 bp to Normalized AFFOPU AFFO payout ratio 55.7% 1.10 100% 60% 1.00 0.96 0.93 56.1% 55.7% 0.92 0.89 54.4% 0.88 55% 53.1% 53.1%
Slide 37: Regional Portfolio Overviews
A P P E N D I X 3 REGIONAL PORTFOLIO OVERVIEWS 36
Slide 38: Portfolio Profile
PORTFOLIO PROFILE PORTFOLIO GLOBAL HEALTHCARE REAL ESTATE INFRASTRUCTURE COMPRISES 153 PROPERTIES Canada Brazil Europe Vital Trust NWAUS Platform (1) TOTALING 10.8M Q1 2018 PF SQUARE FEET OF GLA IN FIVE COUNTRIES Number of 56 8 30 45 14 153 Properties STRONG OPERATING ~93% MOB & / ~23% MOB & / ~77%
Slide 39: 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 91.7% occupancy and ~5.3 year WALE High qualit
Slide 40: 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 RORAIMA 100.0% occupancy and ~20.6 year WALE AMAPÁ Stable cash flow with long-term,
Slide 41: 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 95.6% occupancy and ~8.7 year WALE MECKLENBURG-VORPOMMERN Wil
Slide 42: 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 14 Properties of ~1.2M Square Feet Epworth Victoria Par
Slide 43: 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 44: Management Biographies
A P P E N D I X 4 MANAGEMENT BIOGRAPHIES 43
Slide 45: 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 platform HEALTHCARE PROPERTY Chairman & Managing
Slide 46: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $10.78/unit as of November 5, 2018. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q3-18 AFFO of $0.88/unit. 3. Based on total assets of NWH, Vital Trust on a fully consolidated basis including post-quarter acquisiti
Slide 47: 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 46
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