NorthWest Healthcare Properties Real Estate Investment Trust releases first quarter 2016 results

TORONTO, May 12, 2016 /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 ended March 31, 2016.

2016 First Quarter Financial and Operational Highlights:

For the three months ended March 31, 2016, the REIT delivered strong financial and operating results with key highlights as follows:

  • AFFO per unit for the first quarter of $0.22 or $0.87 on an annualized basis, ($0.87 per unit on a normalized first quarter 2016 annualized basis);
  • AFFO payout ratio of approximately 92% (92% normalized) for the first quarter based on the REIT's annual distribution policy of $0.80/unit;
  • Strong core portfolio occupancy of 96.1%, led by the international portfolio occupancy of 98.6%;
  • Core weighted average lease expiry of 10.1 years, underpinned by the international portfolio with a weighted average lease expiry of 15.8 years;
  • Strong same property NOI growth, relative to the same quarter last year, in source currency, of 3.8% driven largely by inflation indexation adjustments on leases at the REIT's international assets;
  • Recognition of a $16.4 million valuation gain in the REIT's total investment property portfolio, in the first quarter, driven primarily by valuation gains in the REIT's international regions of Australasia and Brazil;
  • Adjusted net asset value of $10.60/unit; and
  • Constant leverage of 49.2% (55.5% including convertible debentures), unchanged from 49.2% (55.6%) at the end of fiscal year 2015.

During both the first quarter and subsequent to the quarter, the REIT has executed on a number of asset management and financing initiatives expected to improve both the REIT's portfolio quality and financial position.  Key initiatives include: 

  • Completed $69.2 million of acquisitions previously announced as follows:
    • Acquisitions of 5 properties in Australia totaling $49.2 million (A$49.7 million) including a 4-property portfolio of aged-care assets, representing Vital Healthcare Property Trust's initial investment in this asset class;
    • Acquisition of a two-property medical office complex in Berlin, Germany for approximately $20.0 million (€13.5 million);
  • Completed the sale of 9 of 13 non-core Canadian properties held for sale at the end of fiscal year 2015, totaling $54.2 million which generated approximately $13.6 million of net proceeds. The REIT expects to complete the dispositions of the remaining 4 properties before the end of Q3 2016 for additional estimated net proceeds of approximately $2.3 million;
  • Continued progress on its development projects with substantial completion and initial tenant occupancy occurring or expected to occur in May and June for Barrie Primary Care Campus in Barrie, Canada and the West Toronto Health Centre in Etobicoke, Canada respectively, as well as the completion and rentalization of Vital Trust's Marian Centre property in Perth, Australia.
  • Refinancing approximately $68 million of property level debt with a weighted average interest rate of 5.40% with new mortgages totaling $78 million at a weighted average interest rate of 3.14%, expected to generate annual interest rate savings of approximately $1.2 million (~$0.02/unit) and extend the REIT's maturity profile;
  • In April 2016, completed an equity offering and private placement generating approximately $80 million of gross proceeds providing the REIT increased financial flexibility to deleverage its higher cost debt and invest in accretive opportunities in the long term;
  • In April 2016, immediately repaid $55.8 million of outstanding debt including portions of the REIT's acquisition and revolving credit facilities, following the closing of the equity offering; and
  • In April 2016, completed the marketing of the previously announced long-term securitization financing of the REIT's HMB hospital in Brazil raising approximately $68 million (R$191 million) gross proceeds at an interest rate of 8.27% plus inflation adjustments, expected to close May 13 2016.

"The first four months of 2016 highlights the REIT's focus to execute on re-deploying capital, improving its portfolio quality, and establishing a more conservative financial profile", said Paul Dalla Lana, Chief Executive Officer.  "With this foundation now in place and significant liquidity available, the REIT will continue executing on committed, low-risk development and expansion projects as well as making select accretive acquisitions through our growing global pipeline of prospective high quality defensive international healthcare real estate investments, ultimately driving long-term unitholder value."

Selected Financial Information:  




(unaudited)

Three Months Ended

Three Months Ended

($000's, except unit and per unit amounts)

March 31, 2016

December 31, 2015




Number of properties(1)

120

122

Gross leasable area (sf) (1)

7,834,655

8,034,098

Occupancy(1)

94.8%

94.3%

Weighted Average Lease Expiry (Years) (1)

9.8

9.6

Net Operating Income

$44,707

$44,250

Net (Loss) Income attributable to unitholders

($8,049)

$4,185

Funds from Operations ("FFO")

$16,103

$13,199

Adjusted Funds from Operations ("AFFO")(2)

$15,674

$14,016

Debt to Gross Book Value – Declaration of Trust

49.2%

49.2%

Debt to Gross Book Value – Including Convertible Debentures

55.6%

55.5%




Per unit data



FFO

$0.22

$0.18

AFFO

$0.22

$0.20

Distributions

$0.20

$0.20

AFFO Payout ratio

92%

100%








(1)

Stated at 100% of Vital Trust

(2)

AFFO amounts are calculated utilizing leasing and capital reserves of 6% of revenue in Canada and Germany

 

Some financial measures used in this press release, such as FFO, AFFO, and Normalized AFFO 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 first quarter ending March 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 months ended March 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", "run rate", "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.

The REIT invites you to participate in its conference call with senior management to discuss our first quarter 2016 results on Friday, May 13, 2016 at 9:00 AM (Eastern).

The conference call can be accessed by dialing 647-427-7450 or 1-888-231-8191. The conference ID is 883 662 44.

Audio replay will be available until May 20, 2016 by dialing 416-849-0833 or 1-855-859-2056. The passcode is 883 662 44.

In conjunction with the release of the REIT's first 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.

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 120 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.

SOURCE NorthWest Healthcare Properties Real Estate Investment Trust

For further information: please contact Paul Dalla Lana, CEO at (416) 366-8300 x 1001.


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