Vital Infrastructure Property Trust · TSX:VITL.UN
Vital Infrastructure Property Trust — NorthWest Healthcare Properties Real Estate Investment Trust — Q3 2017 Earnings Presentation
55 slides from Vital Infrastructure Property Trust's earnings presentation, Nov 9, 2017
Slide 1: Q3 2017 Investor Update
Q3 2017 INVESTOR UPDATE November 09, 2017
Slide 2: Disclaimer
DISCLAIMER Thi s presentation provi des a summary description of Northwest Healthcare Properties Real Estate Investment Trust (“NWH” or the “REIT”). This presentation should be read i n conjunction with and i s qualified in its entirety by reference to the REIT’s most recently filed financial s tate
Slide 3: Core Healthcare Infrastructure in Major Markets
CORE HEALTHCARE INFRASTRUCTURE IN MAJOR MARKETS TO RO NTO NorthWest Healthcare Properties Real Estate A UC K L A ND S ÃO P AUL O 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 MELBOUR
Slide 4: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER ANOTHER VERY Generation Acquisition now complete: First quarter of the Generation portfolio and operating results fully consolidated in the REITs accounts ACTIVE QUARTER Earnings accretion from refinancing and developments totaling $5 million on an annual basis expect
Slide 5: Key Metrics
KEY METRICS As Reported Normalized Run Rate Adjusts for financing activities as Deliver stable property operating Q4 equity raise, refinancing high Track to management run rate performance, cash flow and cost debt, VHP fees and non- and guidance distributions recurring items Completion of th
Slide 6: Dashboard
DASHBOARD GROSS BOOK VALUE ( 3) NORMALIZED AFFO / UNIT +20% YoY (8x increase since inception) (8) + 4% YoY (20% since inception) (8) $4,454m $0.96 $3,700m $0.92 $572m $0.80 At inception Q3-2016 Q3-2017 At inception Q3-2016 Q3-2017 Normalized Annualized Normalized OCCUPANCY WEIGHTED AVERAGE LEASE EXP
Slide 7: 2017 Representative Acquisitions
2017 REPRESENTATIVE ACQUISITIONS February 2017 February 2017 M arch 2017 A pril 2017 June 2017 July 2017 Acquisition of a Medical Acquisition of Acquisition of Grafton Acquisition of Ormiston Acquisition of Acquisition of The Hills Office Building complex Abbotsford Private Aged Care Fac
Slide 8: Strategic Acquisition of Generation Healthcare REIT
STRATEGIC ACQUISITION OF GENERATION HEALTHCARE REIT NORTHWEST HAS NorthWest completed the $715M of EV acquisition of Generation Healthcare REIT (“Generation”) ANNOUNCED THE The transaction is accretive to AFFO and NAV in 2018 as committed developments are SUCCESSFUL completed COMPLETION OF THE
Slide 9: Development Completion: Casey Stage 2
DEVELOPMENT COMPLETION: CASEY STAGE 2 Key Facts Description New Private Hospital Location Berwick – Victoria, Australia Generation ownership 50% of the base building and 90% of the carpark Total Project Cost $107M (Generation’s interest circa $39M) Site area 7,760 sqm Head Tenant St John of God Heal
Slide 10: Financial Overview
FINANCIAL OVERVIEW 9
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS POSITIVE FINANCIAL Q3-17 Q3-17 OPERATING RESULTS IN As Reported Normalized LINE WITH NOI $61.8M $62.1M MANAGEMENT FFO $24.1M $28.6M GUIDANCE AFFO $24.1M $28.6M NORMALIZED RESULTS W.A Units 106,585 119,795 O utstanding HAVE BEEN ADJUSTED TO REFLECT THE AFFO / Unit ( 4) $0.23/unit
Slide 12: Regional Dashboard
REGIONAL DASHBOARD C A N A D A B R A Z I L L EADING MEDICAL STRONG RELATIONSHIPS WITH LEADING 0.5% S P NOI Growth (9) OF FICE BUILDING P L ATFORM OP ERATORS 6.3% S P NOI Growth (9) Occupancy 90.5% Occupancy 100% WALE 5.0YR WALE 20.9YR A UST RALA S IA GERMANY L EADING PUBLICLY CON SOLIDATION OF L IST
Slide 13: Capitalization
CAPITALIZATION DEBT MATURITY PROFILE (11) Market Capitalization $1.4BN Enterprise Value $3.5BN Gross Book Value $4.5BN LTV (Excluding 46.7% Convertibles) LTV (Including Convertibles) 54.4% REGIONAL DEBT STRATEGIES W.A. Interest Rate 4.81% Asset Level Bank Loans and Asset Level Asset Level Ty pe Term
Slide 14: Deleveraging Strategy
DELEVERAGING STRATEGY THE REIT SEES NATURAL Reported LTV (incl. converts) down ~170 bp since the merger of NWI and DELEVERAGING FROM NWH however temporally higher than the REIT run rate as result of DEBT REPAYMENT AND Generation acquisition and consolidation CAPITAL RECYCLING Generation consolidatio
Slide 15: Quarterly NAV/Unit Impact
QUARTERLY NAV/UNIT IMPACT $0.06 $0.07 ($0.17) International Growth ($0.06) - Canada: Most properties NOI and cap rates mainly flat QoQ. - Brazil:. NOI increases due to annual $12.20 indexed leases based on three months of $12.00 inflation. Portfolio cap rate held firm at 8.2% - Germany: NOI and ca
Slide 16: Risk Management – Foreign Exchange
RISK MANAGEMENT – FOREIGN EXCHANGE OVER A 10 YEAR PERIOD, PORTFOLIO INDEX HAS REMAINED RELATIVELY IN-LINE WITH ITS BASE VALUE 102 102 RENTAL INDEXATION 95 ACTS AS NATURAL 91 CURRENCY HEDGE 83 LOCAL CURRENCY PROPERTY / CORPORATE DEBT TO REDUCE INVESTMENT RISK FX Rate - Spot day Var. % 30-Sep-16 30-Ju
Slide 17: Portfolio Overview
P O RT F O LI O OV E RV I EW 16
Slide 18: Portfolio Overview
PORTFOLIO OVERVIEW CANADA GERMANY $4.5BN International Platform Canada / Brazil / Germany / Australia & NZ 22 Medical Office Buildings 463 Tenants 2 Development Sites 58 Medical Office Buildings VITAL PROPERTY TRUST 1,114 tenants T oronto Be rlin New Zealand Listed Entity 41 Properties BRAZIL S ã o
Slide 19: Portfolio Diversification
PORTFOLIO DIVERSIFICATION NOI DIVERSIFICATION TOP 10 TENANTS BY GROSS RENT (12) DIVERSIFIED BY GEOGRAPHY ( 4) PORTFOLIO IN Q 3 - 17 % of Gross Tenant Region STRATEGIC Rent 1 INTERNATIONAL Re de D`Or 18.0% MARKETS AND STABLE, Q 3 - 16 2 Hea lthe Care CORE HEALTHCARE RE G IONS 4.1% 3 REAL ESTATE ASSET
Slide 20: Representative Investments
REPRESENTATIVE INVESTMENTS Toronto West Health Rede D’Or Hospital Alte Holstenstrasse, The Hills Clinic Centre Portfolio Hamburg IFOR a nd Santa Helena Assets MOB - development Assets 2 Hospitals Assets 1 MOB Assets 1 Hospital 294 Beds + 22 surgical units/ S ize 82k Square Feet S ize S ize ~60k Squa
Slide 21: Accretive Development & Expansions
ACCRETIVE DEVELOPMENT & EXPANSIONS WITH A TRACK ~$222M of committed low risk development & expansions at Vital, Generation, in Brazil, and Canada RECORD OF – $149M Australian hospital expansions at Vital and Generation to be funded through existing resources COMPLETING MORE – $55M Brazil hospital
Slide 22: Accretive Development & Expansion Projects - Generation
ACCRETIVE DEVELOPMENT & EXPANSION PROJECTS - GENERATION ONE PROJECT (CASEY Projects consist of major expansions to add a combination of inpatient beds, operating theaters, and parking to existing facilities STAGE 2) COMPLETED AND WITH Developments are 100% pre-leased to the existing operators of
Slide 23: Accretive Development & Expansions – Vital Trust
ACCRETIVE DEVELOPMENT & EXPANSIONS – VITAL TRUST FOUR DEVELOPMENT Two development projects completed in Q3 - Sportmed and Maitland Stage 1 - totalling ~ C$ 23M PROJECTS TOTALLING The projects include a mix of modernisation and expansion at acute surgical and mental ~C$41M ARE health facilities t
Slide 24: Strategy & Outlook
STRAFEGY & OUTLOOK S NORTHWEST
Slide 25: Relative Valuation
RELATIVE VALUATION THE REIT IS TRADING AT A SIGNIFICANT DISCOUNT TO ITS PEERS ON AN AFFO MULTIPLE AND NAV BASIS - Based on NWH.UN’s closing unit price of $11.46/unit as of November 7, 2017 and normalized AFFO/Unit of $0.96 per year ($0.23/unit for the quarter) - NWH.UN’s NAV is based on Q3 2017 Norm
Slide 26: Investor Factsheet
INVESTOR FACTSHEET Ticker NWH.UN Listed Exchange TSX Distribution Payable Monthly Distribution Type 100% Return of Capital for 2016 Unit Price $11.46 (November 07, 2017) Market Capitalization ~$1.4BN Distribution Yield ~7.0% 52-Week Trading Range $9.60 - $11.50 Volume Weighted Avg. Price (VWAP) (20-
Slide 27: Appendix: Investment Thesis
A P P E N D I X 1 INVESTMENT THESIS 26
Slide 28: Investment Highlights
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 externa
Slide 29: Key Drivers of Health Care Real Estate
KEY DRIVERS OF HEALTH CARE REAL ESTATE Aging Population >65 population cohort growing rapidly in developed countries 604mm people worldwide over 65 by 2020, ~10% of global population Consolidation & Cost Increased Healthcare The Rise of Private Savings Spending Healthcare Scale required for ef
Slide 30: 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 31: Appendix: Financial Metrics
A P P E N D I X 2 FINANCIAL METRICS 30
Slide 32: Transformational Growth Continues
TRANSFORMATIONAL GROWTH CONTINUES Strategic International Growth Operational Strength Scalable Platform Defensive Healthcare Assets Internal value creation opportunities NWI investment and Canadian Medical Office Building (MOB) Consolidation international growth Defensive High Improved Pos
Slide 33: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS GROSS BOOK VALUE (3) PORTFOLIO QUALITY Portfolio Quality remains high term leases with a WALE of 11.3 GBV has increased from $3.7BN to $4.5.BN, a ~20.4% increase years and occupancy above 95%. YoY + 20.4% SP NOI NAV (7) Normalized Cash SP NOI in C$ increased 3.
Slide 34: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS FINANCIAL PROFILE CAPITALIZATION Annualized AFFO / Unit has increased ~17% from $0.82 to Consolidated LTV (incl. Converts) has decreased from 51.2% $0.96. Payout Ratio is down 400bps to ~83% (Q3-16) to 50.6% CAPITAL RAISING CAPITAL MARKETS AND LIQUIDITY Total
Slide 35: Appendix: Regional Portfolio Overviews
A P P E N D I X 3 R E G I O N A L P O RT F O L I O OVERVIEW S 34
Slide 36: Portfolio Profile
PORTFOLIO PROFILE PORTFOLIO GLOBAL HEALTHCARE REAL ESTATE INFRASTRUCTURE COMPRISES 144 PROPERTIES Canada Brazil Germany Vital Trust Generation Platform TOTALING 9.7M Q3 2017 PF SQUARE FEET OF GLA IN FIVE COUNTRIES Number of 58 7 22 41 16 144 Properties STRONG OPERATING 100% MOB 100% ~25% MOB & 75% M
Slide 37: 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 58 properties comprising GLA of 4.0 million sf and NT ~1,114 tenants NU 90.5% occupancy and ~5.0 year WALE AB High qu
Slide 38: 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 ~20.9 year WALE RORAIMA AMAPÁ Stable cash flow with long-term,
Slide 39: Germany: Strategically Located MOB Assets
GERMANY: STRATEGICALLY LOCATED MOB ASSETS INVESTMENT AND MARKET OVERVIEW High quality MOB assets located in the major markets including Berlin, S C HLESWIG- Frankfurt, Ingolstadt and Leipzig HO LSTEIN 96.3% occupancy and ~4.8 year WALE M E CK LENB URG-VORPOMMERN HA M B URG 1 Highly fragmented
Slide 40: Australasia (1): Major Market Hospital and MOB Portfolio
AUSTRALASIA (1): MAJOR MARKET HOSPITAL AND MOB PORTFOLIO PORTFOLIO OVERVIEW Generation Healthcare owns a leading Australian healthcare real estate portfolio with $865M in existing assets and a $89+ development pipeline of yields at ~6.0% on average. Portfolio of 16 Properties of ~1.1M Square Fee
Slide 41: Australasia (2): Strategic Investment in Vital Trust
AUSTRALASIA (2): STRATEGIC INVESTMENT IN VITAL TRUST INVESTMENT AND MARKET OVERVIEW AUSTRALIA Manager and 24.9% strategic shareholder of Vital Trust (NZX:VHP), Australasia’s listed healthcare real estate owner with 22 private hospitals, 14 MOBs, 5 aged care assets and 4 development lots 99.3% oc
Slide 42: Appendix: Management Biographies
A P P E N D I X 4 MANAGEMENT BIOGRAPHIES 41
Slide 43: 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 Pa ul Dalla Lana Founder of NWH & NWI platform REITs M
Slide 44: Appendix: Generation Portfolio Overview
A P P E N D I X 5 G E NE RAT I O N P O R T F O L I O O V E R V I E W 43
Slide 45: Generation Healthcare: Overview
GENERATION HEALTHCARE: OVERVIEW KEY PERFORMANCE METRICS Sept-17 Occupancy (by income) 98.2% Weighted average lease term 13.4 years Like-for-like rental growth 2.7% Number of properties 16 Weighted average debt term to maturity 1.2 years Weighted average interest rate 5.1% Gearing ratio 36.5% INVESTM
Slide 46: Generation Healthcare: Development Projects
GENERATION HEALTHCARE: DEVELOPMENT PROJECTS FRANKSTON PRIVATE HOSPITAL Completion Date: June 2017 Completion % Q3-17: 100% Site Area: 2,775 sqm site adjacent to the existing facility Expansion Total Project Cost: A$45 million (Generation 65% - A$29 million) Existing Location: Frankston – Victoria, A
Slide 47: Generation Healthcare: Debt Investment
GENERATION HEALTHCARE: DEBT INVESTMENT E PPING MEDICAL CENTRE – DEBT INVESTMENT + PUT/CALL AGREEMENT S ite Area: 20,000 sqm Location: Epping – Victoria, Australia Ma jor Tenants: Genenis Cancer Care, MIA Victoria, Sonic Healthcare, Healthe Care Yie ld on cost: Implied NOI yield of ~8.0% following ex
Slide 48: Generation Healthcare: Portfolio Overview
GENERATION HEALTHCARE: PORTFOLIO OVERVIEW Epworth Freemasons Private Epworth Freemasons Private Australian Red Cross Blood Harvester Centre Hospital and Medical Centre Hospital (Clarendon Street) Service Facility (Arcbs) L ocation Melbourne, VIC Melbourne, VIC Melbourne, VIC Brisbane, QLD Blood test
Slide 49: Generation Healthcare: Portfolio Overview (continued)
GENERATION HEALTHCARE: PORTFOLIO OVERVIEW (continued) Darlington Baycrest Tantula Rise Pacific Private Clinic L ocation Banora Point, NSW Pialba, QLD Alexandra Headland, QLD Gold Coast, QLD Description Residential aged care facility Residential aged care facility Residential aged care facility Day s
Slide 50: Generation Healthcare: Portfolio Overview (continued)
GENERATION HEALTHCARE: PORTFOLIO OVERVIEW(continued) Westmead Rehabilitation Spring Hill St John of God Specialist Centre St John of God Berwick Hospital L ocation Westmead, NSW Brisbane, QLD Berwick, VIC Berwick, VIC General hospital with day surgery, Day surgery and medical Specialist centre with
Slide 51: Generation Healthcare: Portfolio Overview (continued)
GENERATION HEALTHCARE: PORTFOLIO OVERVIEW (continued) Epping Medical & Specialist Frankston Private Frankston Specialist Centre Centre (Debt Interest) L ocation Frankston, VIC Frankston, VIC Epping, VIC Day surgery, cancer services, Description diagnostic and medical Medical consulting suites Specia
Slide 52: Generation Healthcare: Portfolio Overview (continued)
GENERATION HEALTHCARE: PORTFOLIO OVERVIEW(continued) Waratah Private Hospital Waratah Private Hospital Ground Floor Suites (Debt Interest) L ocation Hurstville, NSW Hurstville, NSW Hospital with ancillary Hospital with ancillary Description diagnostic and cancer services diagnostic and cancer servic
Slide 53: Notes
NOTES 1. Based on NWH.UN’s closing unit price of $11.46/unit as of November 7, 2017. 2. Based on the REIT’s distribution policy of $0.80/unit per annum and normalized Q3-17 AFFO of $0.96/unit. 3. Based on total assets of NWH, Vital Trust and Generation on a fully consolidated basis including post-qu
Slide 54: 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 53
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NorthWest Healthcare Properties Real Estate Investment Trust — Q3 2017 Earnings Presentation on 6ix