Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — Northwest Healthcare Properties Real Estate Investment Trust — Q2 2021 Earnings Presentation
38 slides from Vital Infrastructure Property Trust's earnings presentation, Aug 12, 2021
Slide 1: Q2 2021 Investor Update
Q2 2021 INVESTOR UPDATE August 12, 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 160% (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 ’20E – ’24E GSA NOI Growth Projections 180% 81.6% 110% 6.2% 6.2% 6.0% (3.1)% 100% (4.0)% 160% 4.1% (12.4)% Return 90% 3.6% TotalReturn 38.0% 80% (18.5)% 29.5% 140% 2.2% 27.0% (22.0
Slide 6: 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 7: Delivering on NAV Growth with More to Come
DELIVERING ON NAV GROWTH WITH MORE TO COME 6% YOY NAV/UNIT GROWTH $1.37 ($0.26) ~8% Growth (constant ($0.34) currency) $0.03 $13.14 $13.17 $12.37 Q2-20 NAV/Unit IPP revaluation FX Other Q2-21 NAV/Unit FX PF NAV/Unit CLEAR PATH TO A FURTHER +$250M OF VALUE CREATION Global Asset Institutionalization D
Slide 8: UK Value Creation Initiatives Nearing Completion
UK VALUE CREATION INITIATIVES NEARING COMPLETION ~$650M ~6.6% TOTAL UK ACQUISITION CAP INVESTMENT RATE Substantial UK OPCO SALES PROCESS: ENHANCING CREDIT Value Creation STRONG OPERATING PERFORMANCE AND QUALITY AND TENANT COVERAGE METRICS DIVERSIFICATION CLAREMONT PRIVATE EDINBURGH CLINIC CANCER CEN
Slide 9: Expansion of Asset Management Platform
EXPANSION OF ASSET MANAGEMENT PLATFORM UK JV LEADS TO ~$75M OF VALUE CREATION $125M $75M $725M $525M Q2-21 UK JV AUS JV Expansion Proforma Valuation UK MANAGER VALUATION KEY INSTITUTIONAL RELATIONSHIPS ~$8M ~75% 13x Stabilized Fees EBITDA Margin Valuation Multiple ~$75M UK JV Value Creation 8
Slide 10: Development Pipeline to Be a Significant Source of Value Creation
DEVELOPMENT PIPELINE TO BE A SIGNIFICANT SOURCE OF VALUE CREATION PIPELINE TO GENERATE NAV & EARNINGS GROWTH GROWTH OPPORTUNITIES +$1B 6.5% Development Average Yield Pipeline $350M 100bps Spread to Stabilized Healthcare Post-acute Rehab Active Projects Precincts Cap Rates & Ambulatory Care +$100M +$
Slide 11: Defensive Underlying Portfolio
DEFENSIVE UNDERLYING PORTFOLIO Operating Metrics Diversification 97% 98.8% 7 >2,000 Q2 2021 Cash & Portfolio Occupancy Countries Tenants Total Collections Diverse tenants encompass 76% 14 yr hospitals operators, Inflation Indexed rehabilitation clinics, life WALE sciences and individual Rents STABLE
Slide 12: 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 $8.3B 100% $7.8B 90% MANAGEMENT $8B 75% 73% $7B 70% $6.5B 80% PLATFORM OVER THE $6B 61% $3.4B $3.6B 70% 60% PAST 5 YEARS, TOTAL $5B $4.1B $4.1B $2.5B 56% 56% 50% $4B AUM HAS INCREAS
Slide 13: Investment Credit Grade Metrics Achieved: Positioned for Growth
INVESTMENT CREDIT GRADE METRICS ACHIEVED: POSITIONED FOR GROWTH Target LTV of ~40% Proportionate Net Debt/EBITDA Bridge (0.40x) (1.16x) Forecast 57.6% 57.0% 52.1% 49.6% 48.0% 52.6% 48.0% 40.4% 39.6% 8.86x 44.3% 43.1% 7.30x 41.8% 34.5% 33.6% Q3-20 Q4-20 Q1 21 Q2 21 Tranche F UK JV & Value Dev't & Con
Slide 14: Business Model
BUSINESS MODEL • WALE: 14.2 Years / Occupancy: 96.7% 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: $347M +0.3% • Development Yield: 100bps spread ~10% Ann
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS 14
Slide 16: Financial Dashboard
FINANCIAL DASHBOARD As Reported Normalized AFFO/unit (5) $0.86/unit $0.92/unit LTV (6)/ 43.1% / 49.6% ~40%/~45% Proportionate LTV NAV (7) $13.14/unit ~$14/unit Accretive JV Debt Developments Deployment Repayment 15
Slide 17: Proportionate Income Statement
PROPORTIONATE INCOME STATEMENT ~8% AFFO PER UNIT GROWTH DRIVEN BY SPNOI GROWTH, INCREASED Includes European & Australian JV Acquisition Fees MANAGEMENT FEES AND REDUCED INTEREST EXPENSE Deleveraging through equity issuance and reduced WAIR 2.9% ~9% 12 bps SPNOI Growth AFFO/Unit Growth Reduction in (
Slide 18: Proportionate Balance Sheet
PROPORTIONATE BALANCE SHEET ~6% NAV PER UNIT GROWTH DRIVEN BY As at June 30 IMPROVED PROPERTY C$M 2020 2021 % change +$200M VALUATIONS OFFSET BY Investment Properties 3,971.3 4,662.2 17.4% Fair Value Gain Other Assets 281.1 374.9 33.3% FX DEPRECIATION Total Assets 4,252.5 5,037.1 18.5% Mortgages, Lo
Slide 19: 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 $3.4 $1.3 30% Perpetuity $20 COMMITMENTS Hospital JV DRIVING SIGNIFICANT Vital Active $2.3 Open 26% Perpetuity $25
Slide 20: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 15 YEAR PERIOD, THE REIT’S NOI WEIGHTED FOREIGN EXCHANGE INDEX HAS REMAINED RELATIVELY STABLE RENTAL INDEXATION ACTS AS NATURAL CURRENCY HEDGE PORTFOLIO SECURED WITH LOCAL CURRENCY DEBT WHEREVER POSSIBLE TO MINIMIZE FX RISK • Canada: FX • Europe: FX volatili
Slide 21: Global Healthcare Trends
GLOBAL HEALTHCARE TRENDS Ss NORTHWEST
Slide 22: Global Healthcare Market
GLOBAL HEALTHCARE MARKET Trillion Annual Global Healthcare Spend ($US) 10.4% Global Healthcare Expenditure (% GDP) 4-7% Annual Growth $ NORTHWEST HEALTHCARE PROPERTIES
Slide 23: 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 24: 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 25: Investment Activity
INVESTMENT ACTIVITY 24
Slide 26: Consolidated Investment Activity
CONSOLIDATED INVESTMENT ACTIVITY 2020 TRANSACTIONS TRANSACTION TYPE REGION C$M AUS/ Clinics, Hospitals and Life Acquisition UK/GER/ 917 Sciences Assets NL JV Dispositions & Asset AUS/GER/ Disposition 976 Sales NL UNITED KINGDOM Total 1,893 2021 YTD TRANSACTIONS TRANSACTION TYPE REGION C$M Netherland
Slide 27: Committed Developments
COMMITTED DEVELOPMENTS • ~$347.2M (fully consolidated; $126.6M 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 ▪ $276.8M ($69.5M proportionat
Slide 28: Portfolio Overview
PORTFOLIO OVERVIEW 27
Slide 29: Asset Mix by Region and Segment
ASSET MIX BY REGION AND SEGMENT ON A PROPORTIONATE PROPORTIONATE NOI DIVERSIFICATION BASIS HOSPITALS Q2 2021 Q2 2021 ACCOUNT FOR 59% OF Australasia Canada Hospital and MOB Healthcare NET OPERATING 26% 22% 27% Facilities Q2 2020 Q2 2020 30% INCOME 41% REGIONS ASSET MIX 48% 52% INCREASING FOCUS 59% 27
Slide 30: 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 15.5% Albertans
Slide 31: Case Study – Epworth Eastern Hospital, Melbourne
CASE STUDY – 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 quality
Slide 32: Investment Opportunity
INVESTMENT OPPORTUNITY 31
Slide 33: 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 34: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AT A DISCOUNT TO ITS PEERS ON AN AFFO MULTIPLE BASIS $15.10 - Based on NWH.UN’s closing unit price of $13.07/unit as of August 12, 2021, and normalized AFFO/Unit of $0.92 per year; NWH.UN’s NAV/unit is based on Q2 2021 of $13.14. 33
Slide 35: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly 40% Other Income/ Distribution Type 60% Return on Capital Unit Price (August 12, 2021) $13.07 Market Capitalization ~$2.8B Distribution Yield 6.1% 52-Week Trading Range $10.90-$13.47 Volume Weighted Avg. Price (VWAP) (
Slide 36: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $13.07/unit as of August 12, 2021. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q2 2021 AFFO of $0.92/unit. 3. Based on total assets under management of NWH, Vital Trust on a fully consolidated basis including post
Slide 37: 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 36
Slide 38: Slide 38
Northwest Healthcare Properties Real Estate Investment Trust — Q2 2021 Earnings Presentation on 6ix