TORONTO, March 2, 2017 /CNW/ – NorthWest Healthcare Properties Real Estate Investment Trust (the “REIT”) (TSX: NWH.UN), Canada’s leading global diversified healthcare real estate investment trust, today announced its results for the three months and year ended December 31, 2016.
2016 Financial and Operational Highlights:
For the three months and year ended December 31, 2016, the REIT delivered strong financial and operating results with key highlights as follows:
- AFFO per unit for the fourth quarter and fiscal year 2016 of $0.22 and $0.86, respectively, ($0.92 per unit on a normalized fourth quarter annualized basis)
- AFFO payout ratio of 92% (87% normalized) for the fourth quarter and 93% for the year based on the REIT’s annual distribution policy of $0.80/unit;
- Recognition of a $73.5 million and $136.4 million valuation gains in the REIT’s total investment property portfolio, in the fourth quarter and the year 2016, respectively, driven by valuation gains across the REIT’s portfolio;
- Adjusted net asset value of $11.66/unit, an increase of approximately 7% from Q3-2016 as a result of positive revaluations on the REIT’s assets and currency appreciation;
- Reduced leverage to 41.5% (51.5 % including convertible debentures), down from 49.2% (55.5% including convertible debentures) at the end of 2015;
- Strong portfolio occupancy of 95.6%, led by the international portfolio occupancy of 98.5%;
- Weighted average lease expiry of 11.1 years, underpinned by the international portfolio with a weighted average lease expiry of 15.7 years; and
- Same property NOI growth, in source currency, for 2016 of 7.0% driven largely by inflation indexation adjustments on leases at the REIT’s international assets.
During 2016, the REIT has focused on completing its merger integration priorities along with executing on committed, low-risk development and expansion projects, pursuing select accretive acquisitions and capital-recycling opportunities to improve its portfolio quality, reduce debt, and fund its growth initiatives.
Key initiatives include:
- Completing the sale of the 13 (of 16) identified non-core Canadian properties totaling $72.2M which generated net total proceeds of approximately $27.8M (for all 16).
- Completing more than $330M in corporate financing initiatives including issuing $150.8M of equity and $155.3M of unsecured convertible debentures in 4 separate offerings and expanding the REIT’s credit facility by another $25 million to $125 million;
- Repaying or refinancing approximately $150M of property level debt at significantly lower interest rates with extended maturity profile, including two new long-term financings in Brazil;
- Completing $461M of acquisitions and $62M of developments as follows:
- In Australia/New Zealand â acquisitions totaling $286M and 2 developments totaling $18M highlighted by the REIT’s strategic investment in Generation and participation in Vital’s rights offering;
- In Brazil â 2 acquisitions totaling $156M;
- In Canada â developments totaling $62M; and,
- In Germany â 1 acquisitions totaling $20M.
For 2017, the REIT will build on this strong platform while executing on more than $303M in committed, low-risk development and expansion projects, and select accretive acquisitions; of which $80M have already closed and $223M are under contract of negotiation. The REIT will also continue to seek capital-recycling opportunities to improve its portfolio quality, reduce debt, and fund its growth initiatives. Finally, the REIT will advance ongoing discussions with new institutional partners in each of its international markets as a means to leverage its platform in the ongoing consolidation of healthcare real estate globally.
In support of the REITs strategy, healthcare industry trends remain constructive globally. They can be summarized as a) populations growing and ageing resulting in rising demand for health services and, b) increasing consolidation amongst healthcare providers to achieve scale, efficiency and best practices. Together these trends translate into significant opportunity for the REIT as our tenants or potential tenants are getting bigger and better, and are requiring more capital to grow or to become more efficient while at the same time often becoming less inclined to own their real estate as is not essential for their operations. For our REIT, proving long-term real estate capital to them is a perfect solution, increasingly in demand!
Paul Dalla Lana, the REIT’s CEO noted:
“2016 continued the REIT’s transformation into a leading global healthcare infrastructure company with strategic transactions in each of its international regions. With more than 60% of its income now derived from long-term, inflation-indexed assets, the REIT is better positioned than ever to deliver stable, growing returns to its unitholders.”
Selected Financial Information:
|
(unaudited) |
Three Months Ended |
Year Ended |
|||
|
($000’s, except unit and per unit amounts) |
December 31,2016 |
December 31,2016 |
|||
|
Number of properties |
138 |
138 |
|||
|
Gross leasable area (sf) |
9,376,600 |
9,376,600 |
|||
|
Occupancy(1) |
95.6% |
95.6% |
|||
|
Weighted Average Lease Expiry (Years) |
11.1 |
11.1 |
|||
|
Net Operating Income |
$63,557 |
$202,597 |
|||
|
Net (Loss) Income attributable to unitholders |
$77,457 |
$56,963 |
|||
|
Funds from Operations (“FFO”) |
$21,354 |
$76,599 |
|||
|
Adjusted Funds from Operations (“AFFO”) |
$19,184 |
$69,891 |
|||
|
Debt to Gross Book Value â Declaration of Trust |
41.5% |
41.5% |
|||
|
Debt to Gross Book Value â Including Convertible Debentures |
51.5% |
51.5% |
|||
|
Per unit data |
|||||
|
FFO |
$0.24 |
$0.93 |
|||
|
AFFO |
$0.22 |
$0.86 |
|||
|
Distributions |
$0.20 |
$0.80 |
|||
|
AFFO Payout ratio |
92% |
93% |
|||
The REIT invites you to participate in its conference call with senior management to discuss our fourth quarter 2016 results on Friday, March 3, 2017 at 10:00 AM (Eastern).
The conference call can be accessed by dialing 647-427-7450 or 1-888-231-8191. The conference ID is 70117492.
Audio replay will be available until March 10, 2017 by dialing 416-849-0833 or 1-855-859-2056. The passcode is 70117492.
In conjunction with the release of the REIT’s fourth quarter 2016 financial results, the REIT will post a current investor update presentation to its website where additional information on the REIT’s investments and operating performance may be found. Please visit the REIT’s website at www.nwhreit.com/Investors/Presentations.
Vital Healthcare Property Trust
On February 23, 2017, Vital Trust also announced its financial results for the 3 months ended December 31, 2016. Details on Vital Trust’s financial results are available on Vital Trust’s website at www.vitalhealthcareproperty.co.nz.
Generation Healthcare REIT
On February 20, 2011, Generation also announced its financial results for the 3 months ended December 31, 2016. Details on Generation’s financial results are available on Generation’s website at www.generationreit.com.au.
About NorthWest Healthcare Properties Real Estate Investment Trust
NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT provides investors with access to a portfolio of high quality international healthcare real estate infrastructure comprised of interests in a diversified portfolio of 141 income-producing properties and 9.5 million square feet of gross leasable area located throughout major markets in Canada, Brazil, Germany, Australia and New Zealand. The REIT’s portfolio of medical office buildings, clinics, and hospitals is characterized by long term indexed leases and stable occupancies. With a fully integrated and aligned senior management team, the REIT leverages over 180 professionals across 9 offices in 5 countries to serve as a long term real estate partner to leading healthcare operators.
Non-IFRS Measures
Some financial measures used in this press release, such as FFO, AFFO, Normalized AFFO, Net Asset Value per Unit, portfolio occupancy and weighted average lease expiry, are used by the real estate industry to measure and compare the operating performance of real estate companies, but they do not have any standardized meaning prescribed by IFRS. As such, they are unlikely to be comparable to similar measures presented by other real estate companies. These non-IFRS measures are more fully defined and discussed in the REIT’s Management’s Discussion and Analysis (“MD&A”) for the fourth quarter ending December 31, 2016, which is available on the SEDAR website at www.sedar.com. Also on SEDAR are the condensed consolidated unaudited interim financial statements of the REIT for the three and twelve months ended December 31, 2016.
This press release may contain forward-looking statements with respect to the REIT, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intends”, “believe”, “normalized”, “contracted”, “stabilized” or “continue” or the negative thereof or similar variations. The REIT’s actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are completed. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under “Risks and Uncertainties” in the REIT’s Annual Information Form and the risks and uncertainties set out in the MD&A which are available on www.sedar.com. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements.
SOURCE NorthWest Healthcare Properties Real Estate Investment Trust
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