TSX: NWH
TORONTO, May 29, 2015 /CNW/ – NorthWest Healthcare Properties REIT announced today that it has released the results for NorthWest International Healthcare Properties REIT (“NWI” or the “REIT”) for the three month period ended March 31, 2015.
In Q1’15, the REIT commenced consolidating the financial results of Vital Healthcare Property Trust (Vital Trust), a New Zealand listed entity of which the REIT holds a 24% interest. The REIT previously accounted for this investment on an equity accounting basis. The consolidation of Vital Trust’s financial results reflects both the REIT’s significant strategic investment in Vital Trust as well as its 100% ownership in the asset manager to Vital Trust, a result of the completion of the internalization of management effective January 1, 2015.
The REIT’s first quarter of 2015 delivered financial results consistent with management’s expectations and to the fourth quarter of 2014. Excluding the impact of the Vital Trust consolidation, the REIT posted a 12.4% increase in Net Operating Income (“NOI“) versus the same quarter last year. Adjusted Funds From Operations (“AFFO“) remained consistent with the fourth quarter of 2014 at $0.05 per unit (basic).
Key highlights from the REIT’s financial and operating results for the three month period ended March 31, 2015 include:
- Recognition of a $14.0 million valuation gain in our Brazilian portfolio of 5 infrastructure hospital assets in Q1’15, driven by increased accrued rents that are indexed to inflation;
- NOI of $24.1 million in Q1’15. Excluding the impact of the consolidation of Vital Trust, NOI was $10.4 million representing a 12.4% increase over the same quarter last year;
- AFFO per unit (basic) of $0.05 for Q1’15, consistent with management’s expectations and Q4’14;
- Same property NOI growth, in source currency, relative to the same quarter last year, of 1.3% in Germany and 5.8% in Brazil for Q1’15 for the assets directly held by the REIT in each region driven by the indexation of the REIT’s international property revenues; offset by declines in the Euro and Real relative to the Canadian dollar;
- Leading portfolio occupancy at 95.7% on a proportionate share basis (Canada = 91.4%; International = 98.1%), consistent with the fourth quarter of 2014; (96.0% as at December 31, 2014; International 98.3%; and Canada 91.9%); and
- Weighted average lease term to maturity of 11.3 years on a proportionate share basis (Canada = 4.6 years; International = 15.0 years), consistent with the fourth quarter of 2014; (11.4 years as at December 31, 2014; International 15.1 years; and Canada 4.5 years); and
- On January 28, 2015 (with an effective date of January 1, 2015) pursuant to the Internalization Agreement dated January 7, 2015 between the REIT and NorthWest Value Partners Inc. (NWVP”) (the “Internalization Agreement”), the REIT indirectly acquired the asset management and property management affiliates of NWVP. The REIT also acquired from NWVP all of the rights and obligations relating to the management of Vital Trust.
Subsequent Events
On May 15, 2015 the REIT closed a transaction with NorthWest Healthcare Properties REIT (“NWHP REIT“) to combine and create a leading global diversified healthcare real estate investment trust with over $2.0 billion of assets (the “Combination Transaction”). The Combination Transaction was previously announced on March 10, 2015 and was effected by a plan of arrangement pursuant to which NWHP REIT would acquire all of the assets of the REIT. The unitholders of the REIT received 0.208 of a NWHP REIT unit for each REIT Trust Unit held, on a tax-deferred basis. Earlier, on May 5, 2015, the Combination Transaction was overwhelmingly approved by the REIT’s and NWHP REIT’s voting unitholders at each respective special and annual meeting of unitholders. Further, under the Business Corporations Act (Alberta), the plan of arrangement required the approval of the Court of Queen’s Bench of Alberta (the “Final Order”). A hearing of the application for the Final Order occurred on May 13, 2015, and the plan of arrangement was approved. The Combination Transaction closed as all other necessary regulatory approvals had been obtained and conditions met.
On May 19, 2015, the REIT’s units (symbol MOB.UN), and convertible debentures (MOB.DB, MOB.DB.A and MOB.DB.B) ceased trading on the TSX Venture Exchange. The REIT’s convertible debentures were assumed by NWHP REIT and currently trade under the symbols NWH.DB.A, NWH.DB.B and NWH.DB.C, respectively.
CEO’s Comments:
“The first five months of 2015 have been both exciting and transformational for NorthWest International Healthcare Properties REIT and its unitholders”, said Paul Dalla Lana, Chief Executive Officer. “Q1 2015 closes off 10 quarters of unprecedented growth for the international REIT. We look forward to the remainder of 2015 as we start a new chapter as the combined NorthWest Healthcare Properties REIT, a larger, stronger company with a solid Canadian foundation complimented by high growth infrastructure international healthcare assets”.
FINANCIAL HIGHLIGHTS
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As at |
As at |
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Operational Information (1) |
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Number of Properties – 100% of associates |
123 |
122 |
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|
Gross Leasable Area (sf) – 100% of associates |
7,888,168 |
7,841,695 |
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Occupancy % – 100% of associates |
94.4% |
94.8% |
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Summary of Financial Information |
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Gross Book Value (2) |
$ |
1,369,932,560 |
$ |
846,271,088 |
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Debt – Declaration of Trust (3) |
$ |
618,461,689 |
$ |
436,431,589 |
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Debt to Gross Book Value – Declaration of Trust |
45.1% |
51.6% |
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Debt – Including convertible debentures (3) |
$ |
694,718,574 |
$ |
508,351,099 |
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Debt to Gross Book Value – Including convertible debentures |
50.7% |
60.1% |
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Percentage of Mortgages and Loans Payable at Fixed Rates |
75.7% |
64.9% |
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Weighted-Average Effective Interest Rate on Fixed Rate Mortgages and Loans Payable |
5.58% |
5.82% |
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Adjusted Units Outstanding – period end (4) |
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Basic |
179,371,213 |
178,983,681 |
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Diluted (7) |
181,453,355 |
179,355,950 |
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For the three |
For the three |
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Operating Results |
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Net Income / (Loss) |
$ |
2,893,222 |
$ |
21,164,556 |
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NOI |
$ |
24,104,503 |
$ |
10,043,592 |
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Funds From Operations (“FFO”) (5) |
$ |
2,259,128 |
$ |
3,217,163 |
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Adjusted Funds From Operations (“AFFO”) (5) |
$ |
8,702,279 |
$ |
7,847,230 |
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Distributions (6) |
$ |
9,861,985 |
$ |
9,577,589 |
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Per Unit Amounts (4) |
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FFO per unit – Basic |
$ |
0.01 |
$ |
0.02 |
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FFO per unit – fully diluted (7) |
$ |
0.01 |
$ |
0.02 |
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AFFO per unit – Basic |
$ |
0.05 |
$ |
0.05 |
||||
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AFFO per unit – fully diluted (7) |
$ |
0.05 |
$ |
0.05 |
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Distributions per unit |
$ |
0.06 |
$ |
0.06 |
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Adjusted Weighted Average Units Outstanding (4) |
||||||||
|
Basic |
179,264,297 |
170,427,954 |
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Diluted (7) |
181,278,050 |
170,677,808 |
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Full financial statements and MD&A will be available on SEDAR (www.sedar.com) as well as the Investors section of the REIT’s website (www.nwhreit.com).
Notes
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(1) |
Operational information includes 100% of Vital Healthcare Property Trust (“Vital Trust”) and Northwest Healthcare Properties REIT (“NWHP REIT“). The REIT has an exposure to an approximate 24% interest in Vital Trust and approximate 25% interest in NWHP REIT. |
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(2) |
Gross Book Value is defined as total assets. |
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(3) |
Indebtedness as defined in the Declaration of Trust includes the principal balance of mortgages, margin facilities, term loan, line of credit, and deferred consideration. The REIT’s total debt also includes convertible debentures (at fair value). |
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(4) |
Under IFRS the REIT’s Class B LP and Class D GP exchangeable units are treated as a financial liability rather than equity. The REIT has chosen to present an adjusted basic and diluted per unit measure that includes the Class B LP and Class D GP exchangeable units in basic and diluted units’ outstanding/weighted average units outstanding. There were 92,250,303 Class B LP exchangeable units outstanding as at March 31, 2015 and 91,068,320 Class B LP and 1,110,580 Class D GP exchangeable units outstanding at December 31, 2014. |
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(5) |
FFO and AFFO are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. FFO and AFFO as computed by the REIT may differ from similar computations as reported by other real estate investment trusts and, accordingly, may not be comparable to FFO and AFFO as reported by other such issuers. These terms are defined in the REIT’s first quarter 2015 MD&A and reconciled to IFRS-based amounts reported in the consolidated financial statements of the REIT. |
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(6) |
Represents distributions to Unitholders and Class B LP and Class D GP exchangeable unitholders on an accrual basis. Distributions are payable as at the end of the period in which they are declared by the Board of Trustees, and are paid on or around the 15th day of the following month. |
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(7) |
Diluted units include the conversion of the REIT’s convertible debentures if the closing price of the Trust Unit is greater than the conversion price or exercise price as at the end of the reporting period. Otherwise the convertible debentures are considered anti-dilutive. |
Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) has approved or disapproved the contents of this press release.
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 123 income-producing properties and 7.8 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.
Reader Advisory
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”, 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. A discussion of the risk factors applicable to the REIT is contained under the heading “Risk Factors” in the REIT’s annual information form dated March 10, 2015 and audited consolidated financial statements and management’s discussion and analysis for the year ended December 31, 2014, copies of which each may be obtained on the SEDAR website at www.sedar.com.
SOURCE NorthWest Healthcare Properties Real Estate Investment Trust
