Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — Northwest Healthcare Properties REIT — Q4 2023 Earnings Presentation
43 slides from Vital Infrastructure Property Trust's earnings presentation, Apr 15, 2024
Slide 1: Q4 2023 Financial Results Presentation
Northwest Healthcare Properties REIT Q4 2023 Financial Results Presentation APRIL 15, 2024 TSX: NWH.UN Brisbane Private Hospital, Australia
Slide 2: Disclaimer
Disclaimer This presentation provides a summary description of Northwest Healthcare Properties Real Estate These forward-looking statements reflect the REIT’s expectations only as of the date of this Investment Trust (“NWH” or the “REIT”). This presentation should be read in conjunction with and is
Slide 3: Contents and Presenters
Contents Presenters Northwest & Healthcare Real Estate 4 Craig Mitchell Q423 & FY23 Results 7 CHIEF EXECUTIVE OFFICER FY23 Highlights 8 Q423 Financial Performance 10 Stephanie Karamarkovic Q423 Property Performance 16 CHIEF FINANCIAL OFFICER Q423 Capital Management 21 Strategic Review Process 24 Mik
Slide 4: About Northwest
Sportsmed Hospital & Clinic, Australia Krumenauer Strasse, Germany Ascot Hospital, New Zealand About Northwest Northwest Healthcare Properties REIT (TSX: NWH.UN) owns, manages, and develops real estate exclusively focusing on tenants who are operators in healthcare, research, life sciences and educa
Slide 5: Why Invest In Northwest?
Hospital Caxias, Brazil Epworth Geelong, Australia Ormiston Hospital, New Zealand Why Invest In Northwest? 1 High quality globally diversified healthcare real 4 Investor, tenant and operator relationships provide estate portfolio. long-term revenue stability. 2 Multiple initiatives underway to surfa
Slide 6: Why Healthcare Real Estate?
Why Healthcare Real Estate? Northwest focuses on the cure segment of the healthcare real estate spectrum, a defensive asset class that provides attractive risk adjusted returns, driven by an aging population. Growing Growing need Sustained Shift of care to Increased M&A Transition demand for for lif
Slide 7: Q423 & FY23 Results
Hurstville Private Hospital, Australia Q423 & FY23 Results NWH REIT | Q4 2023 FINANCIAL RESULTS PRESENTATION | 7
Slide 8: Northwest FY23: Simplify and Stabilize
Epworth Eastern Private Hospital, Australia Northwest FY23: Simplify and Stabilize 1. Bringing the balance sheet 2. Core Real Estate performing back into equilibrium well • Same Property NOI in Q423 and FY23 Throughout 2023, the REIT: increased by 4.0% and 3.7%, respectively. • Divested non-core as
Slide 9: Key Events 2023 Timeline
Key Events Key Decisions to Unlock Future Value Steps to Strengthen the Balance Sheet 2023 Timeline Changes to Board of Trustees Management Changes ▪ Dale Klein appointed Non-Executive Chair, ▪ Craig Mitchell appointed CEO. Laura King as Chair of CG&N Committee ▪ Karen Martin appointed Interim CFO.
Slide 10: Q4 2023 Financial Performance
Santa Luzia Hospital, Brazil Q4 2023 Financial Performance NWH REIT | Q4 2023 FINANCIAL RESULTS PRESENTATION | 10
Slide 11: Q4 2023 Financial Snapshot
Cancer Centre London, United Kingdom Q4 2023 Financial Snapshot Financial Highlights 2023 2022 Variance $ Variance % Assets Under Management 9.9 10.9 (1.0) (9.2%) Gross Book Value(1) 7.6 8.5 (0.9) (10.6%) Debt(1) 3.6 3.9 (0.3) (7.8%) Debt to Gross Book Value(1) 47.7% 45.3% 2.4% 5.4% Debt - Including
Slide 12: Proportionate Income Statement (three months ended December 31)
Proportionate Income Statement (three months ended December 31) C$ Millions 2023 2022 ($) Change (%) Change Net Operating Income 86.0 80.4 5.5 6.9% Stable EBITDA as a result of 3.7% SPNOI (1) growth and US portfolio Management Fee Income 12.3 14.4 (2.1) (14.6%) EBITDA acquisition offset by lower Oth
Slide 13: Proportionate Income Statement (Year ended December 31)
Proportionate Income Statement (Year ended December 31)(1) C$ Millions 2023 2022 ($) Change (%) Change Net Operating Income 336.1 300.2 35.9 11.9% Increased EBITDA as a result of Management Fee Income 48.6 59.7 (11.1) (18.5%) EBITDA 3.1% SPNOI (2) growth and US portfolio acquisition, partly offset O
Slide 14: Proportionate Balance Sheet (Year ended December 31)
Proportionate Balance Sheet (Year ended December 31) C$ Billions 2023 2022 ($) Change (%) Change Non-core asset sales(3) and Disposals & valuation losses offset by FX and Investment Properties(1) 5.8 6.3 (0.5) (7.7%) Valuation development spend. Other Assets 0.3 0.5 (0.2) (40.5%) Sale of REIT's stra
Slide 15: NAV Bridge (QoQ)
NAV Bridge (QoQ)(1) ($157.6m) Property revaluation loss for the quarter. ($199.6m) Global manager valuation adjustment. $ 11.96 ( 0.64 ) ( 0.81 ) $ 10.86 0.44 ( 0.07 ) Global Manager $ 2.53 $ 1.72 $ 9.43 $ 9.14 Q3 2023 FV Loss Manager Val FX Other Q4 2023 Notes: (1) As defined in Q4 2023 MD&A. Expre
Slide 16: Q4 2023 Property Performance
Oxford Health Centre, Canada Q4 2023 Property Performance NWHNWH REITREIT | Q4| 2023 Q4 2023 FINANCIAL FINANCIAL RESULTS RESULTS PRESENTATION | 16 PRESENTATION
Slide 17: Northwest Snapshot
Northwest Snapshot SPNOI(1) for the year increased by 3.7% over the prior year due to inflationary adjustments on rents, growth in our underlying lease rentals, 3.7% ▪ ▪ Secured Rental Growth Indexed to inflation continued occupancy above 97%, strong rent collections of 99%, and SPNOI long-term WALE
Slide 18: Net Operating Income
Net Operating Income NOI Growth of 11.0% from Acquisitions, Developments and Rent Reviews. NET OPERATING INCOME BRIDGE ($M)(1) Rent Reviews & Leasing +11.0% growth (including FX) / +8.8% (excluding FX) ▪ 83% CPI, CPI-linked and fixed reviews. ▪ FY23 SPNOI growth of +3.7% vs 2.7% for FY22 400 8 17 (5
Slide 19: Lease Maturity Profile
Lease Maturity Profile(1) 90% 80% 20% of 2024 70% maturities 60% attributed to Hospital Sabara 50% (30-Sep-24). 40% Discussions underway. 30% 20% 10% 0% 2024 2025 2026 2027 2028 2029 2030 2031 Post 2031 Americas Europe Australasia Total 2024 2025 2026 2027 2028 2029 2030 2031 Post 2031 Total America
Slide 20: 2023 GRESB ESG Real Estate Assessment
2023 GRESB ESG Real Estate Assessment Globally Listed Standing Investments 1ST Place 2ND Place Healthcare: Benchmark Development 1ST Place 2ND Place Benchmark Global Healthcare Development 1ST Place 3RD Place (Listed & Unlisted): Benchmark 4-Star ESG 4-Star ESG Rating Rating Northwest believes ESG B
Slide 21: Q4 2023 Capital Management
Alstadt Carree Fulda, Germany Q4 2023 Capital Management NWH REIT | Q4 2023 FINANCIAL RESULTS PRESENTATION | 21
Slide 22: Debt Maturity Profile
Debt Maturity Profile Northwest’s debt maturities as at December 31, 2023(1). 1,800,000 9% 7.97% 6.27% interest rate. Effective weighted average 1,600,000 8% Weighted average Interest rate 1,400,000 6.42% 7% 6.31% 6.04% CANADIAN $000S 69.4% payable at fixed & hedged rates . 1,200,000 5.29% 6% Percen
Slide 23: Interest Rate Hedging Profile
Interest Rate Hedging Profile Cost of Debt is well hedged, managing risk. HEDGING MATURITY PROFILE(1) 2,000 7.00% Rates 2023 2022 1,800 6.00% Weighted Average Cost of Debt 6.27% 5.35% 1,600 Weighted Average Fixed Rate 5.47% 4.45% 1,400 5.00% Weighted Average Fixed Rate 39.8 59.2 CANADIAN $000S 1,200
Slide 24: Strategic Review Process (Disposition Update)
Prins Hendriklaan 376, Germany Strategic Review Process (Disposition Update) NWH REIT | Q4 2023 FINANCIAL RESULTS PRESENTATION | 24
Slide 25: Dispositions
Dispositions During FY23, Northwest divested $495.2 million(1) of its non-core assets and securities. Dispositions - Non-Core Investment Properties Sales of Non-Core Investment Properties During 2023, The REIT announced its initiative to sell Region Quarter Disposition Proceeds non-core assets. (in
Slide 26: FY24 Outlook
The Lincoln Hospital, United Kingdom FY24 Outlook NWH REIT | Q4 2023 FINANCIAL RESULTS PRESENTATION | 26
Slide 27: 2024 Areas of Focus
Lingard Day Centre, Australia 2024 Areas of Focus 1 Maximize value for our unitholders. Continue to surface value embedded within our 2 portfolio. 3 Continue to strengthen our executive teams while at the same time managing our G&A. 4 Continue to improve investor engagement. 5 Become an institutiona
Slide 28: Northwest Healthcare Properties REIT - Summary
Epworth Freemasons Hospital, Australia Northwest Healthcare Properties REIT - Summary Ticker NWH.UN Listed Exchange TSX Distribution Payable (C$) $0.03 / Monthly Unit Price(1) $4.03 Market Capitalization (C$)(1) $1.0 Billion Distribution Yield(1) 8.93 % 52-Week Trading Range(1) $3.89-$9.64 Volume We
Slide 29: Contact Information
Contact Information Craig Mitchell, CEO craig.mitchell@nwhreit.com Mike Brady, President mike.brady@nwhreit.com Stephanie Karamarkovic, CFO stephanie.karamarkovic@nwhreit.com Andrew Greig, Investor Relations andrew.greig@nwhreit.com 416-366-2000 Ext. 2202 29 NWHNWH REITREIT | Q4| 2023 Q4 2023 FINANC
Slide 30: Appendix
68 St. Asaph Street, New Zealand Appendix NWH REIT | Q4 2023 FINANCIAL RESULTS PRESENTATION | 30
Slide 31: Proportionate Share Basis
St. John of God Specialist Centre, Berwick Proportionate Share Basis Proportionate Share Basis reflects net income (losses) from equity accounted joint ventures and Vital Trust on a proportionately consolidated basis at the REIT’s ownership percentage. Management believes this is relevant in represe
Slide 32: Northwest's Strategic Healthcare Property Platform
Northwest's Strategic Healthcare Property Platform Core Preserve, Build and Grow Competencies Investment Development Asset Management Management Management Wholly Owned Fee By The Reit Generating Funds Management JV’s INVESTMENTS Direct Property Unlisted Ownership Public Institutional Companies JVs
Slide 33: Deep Connections With Key Operating Partners
Deep Connections With Key Operating Partners Northwest has deep relationships with the biggest brands in health and health sciences across its regions. NWH REIT | Q4 2023 FINANCIAL RESULTS PRESENTATION | 33
Slide 34: Development Strategy (Vital Healthcare Property Trust)
Development Strategy (Vital Healthcare Property Trust) Northwest has a market leading development team in ANZ with an unmatched depth of experience. Meeting the needs of our Earnings and capital growth Enhancing the portfolio operator partners PIPELINE1 NZ $512m of committed developments with ~NZ$21
Slide 35: Top 10 Tenants
Top 10 Tenants The REIT’s 10 largest tenants for the three months ended December 31, 2023. Top 10 tenants represent 29% of Proportionate Rent The REIT's five largest tenants include: Tenant Region % # of locations 1 Rede D'Or, Brazil: The largest integrated health care network in Brazil 1 Rede D'Or
Slide 36: NOI Is Strongly Diversified By Regions & Asset Mix
NOI Is Strongly Diversified By Regions & Asset Mix Income from stable rent collections and long-term leases. REGIONS ASSET MIX Q4 2023 Q4 2023 1% Life 21% Sciences Australasia 22% Americas 2% 64% 62% Q4 2022 51% 51% Q4 2022 Hospital and 36% 35% 27% Healthcare 28% Facilities MOB Europe Year Over Year
Slide 37: Investment Properties
Albany Medical Centre, Canada Investment Properties GLA (Sq. Ft.) Location Properties AUM1 Occupancy (%) WALE (Yrs) (‘000) Canada 54 1.1 3,393 90.1% 5.5 USA 25 0.6 1,178 96.3% 8.3 Brazil 8 0.8 1,880 100.0% 16.6 Americas Total 87 2.5 6,481 94.1% 9.5 Germany 38 3,551 97.2% 15.9 1.2 Netherlands 17 1,23
Slide 38: Case Study: Capital Light Investment Strategy (Vital)
Ascot Hospital, New Zealand Case Study: Capital Light Investment Strategy (Vital Healthcare Property Trust) Leveraging our experience to increase value: Asset-light business models have been associated with better return on assets, lower profit volatility and greater adaptability in an ever-changing
Slide 39: Case Study: Vital Healthcare Property Trust (NZX:VHP)
Case Study: Vital Healthcare Property Trust (NZX:VHP)(1) Northwest owns a ~28% interest in the only specialist healthcare landlord on the NZX and retains 100% of the management rights. NT 4% 12% ~$0.8bn QLD 15 8% PROPERTIES W (NZ) A SA 22% NSW 27% Royston Hospital, New Zealand NZ 23% VIC ~$1.9bn Vit
Slide 40: Case Study: Epworth Healthcare, Melbourne Australia
Case Study: Epworth Healthcare, Melbourne Australia Northwest has supported Epworth for over 15+ years with expansion opportunities, advice and capital. Developments have added to the quality and value of assets, driving operational benefits and efficiencies that attract practitioners. ▪ Not-for-pro
Slide 41: Experienced Management Team
Experienced Management Team Craig Mitchell, CEO Stephanie Karamarkovic, CFO Mike Brady, President Tracey Whittall, COO Craig Mitchell has more than 20 Stephanie has 17 years of progressive real Mike Brady joined Northwest in 2006 Prior to joining Northwest in 2024, years’ experience specializing in
Slide 42: Experienced Board Of Trustees
Experienced Board Of Trustees Northwest's strong governance framework ensures diversity is considered in determining optimal board composition. Northwest's experienced Board of Trustees functions independently of management, ensuring effective governance practices are followed. NWH REIT | Q4 2023 FI
Slide 43: Non-IFRS Measures
Gunter Hartenstein Strasse, Germany Non-IFRS Measures 1. FFO 2. AFFO 3. FFO per Unit 4. AFFO per Unit 5. AFFO Payout Ratio 6. EBITDA 7. Adjusted EBITDA 8. Investment Properties on a Proportionate Basis 9. Proportionate Management Fees 10. Distributions 11. Net Asset Value (“NAV”) 12. Same Property N
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