NorthWest International Healthcare Properties REIT Releases Fourth Quarter 2014 Results and Rescheduled Q4'14 Earnings Conference Call

TSX-V: MOB.UN

TORONTO, March 11, 2015 /CNW/ - NorthWest International Healthcare Properties REIT ("NWI" or the "REIT") announced today that it has released its results for the three and twelve month period ended December 31, 2014.

The REIT's fourth quarter of 2014 delivered again solid financial results posting a 107% increase in Net Operating Income ("NOI") versus the same quarter last year. Further, Adjusted Funds From Operations ("AFFO") grew approximately 39% relative to the same quarter of last year, largely due to the strength of the REIT's growth in NOI.

Key highlights from the REIT's financial and operating results for the three and twelve month period ended December 31, 2014 include:

  • Growth in total assets to $846 million, up $90 million from the beginning of 2014;
  • Recognition of a $16.0 million valuation gain in our German portfolio of 19 medical office building assets in Q4'14, driven by incremental NOI and contracting cap rates in the German market;
  • NOI of $10.0 million in Q4'14, representing a 107% increase over the same quarter last year;  NOI of $39.4 million for fiscal year 2014, an increase of 119% versus fiscal year 2013;
  • AFFO per unit (basic) of $0.05 for Q4'14, and $0.21 per unit for fiscal year 2014, a 17% increase in AFFO per unit relative to fiscal year 2013;
  • AFFO payout ratio of 105% for fiscal year 2014;
  • Same property NOI growth of 2.9% for fiscal year 2014 driven by the indexation of the REIT's international property revenues in excess of foreign currency impacts;
  • Leading portfolio occupancy at 96.0% on a proportionate share basis (Canada = 91.9%; International = 98.3%), consistent with the third quarter of 2014; (96.0% as at December 31, 2013; Canada 91.3%; and International 99.2%);
  • Weighted average lease term to maturity of 11.4 years on a proportionate share basis (Canada = 4.5 years; International = 15.1 years), consistent with the third quarter of 2014; (12.4 years as at December 31, 2013; Canada 4.8 years; and International 17.74 years);
  • In November 2014, the REIT closed an equity offering of 13,954,000 Trust Units for gross proceeds of $30 million; and
  • In December 2014 and early January 2015, the REIT repaid $16.0 million (R$36.5 million) and successfully refinanced $172.4 million (R$395 million) of Brazil term loans.

 

Subsequent Events

On January 28, 2015 the REIT successfully closed the transaction with NorthWest Value Partners ("NWVP") to internalize the external management of the REIT (the "Internalization Transaction") effective January 1, 2015. As a result of the Internalization Transaction, the REIT internalized the asset management, property management and development functions of the REIT previously carried on by affiliates of NWVP, and also acquired from NWVP all of the rights and obligations relating to the management of Vital Trust (the "Vital Manager"). As a result, the existing team of the asset manager, as well as the Vital manager, and underlying platforms, joined the REIT, consisting of approximately 39 professionals across 5 major regions globally.

On March 10, 2015, the REIT entered into an agreement with NorthWest Healthcare Properties REIT to combine and create a leading global diversified healthcare real estate investment trust. A joint press release describing the transaction is available on SEDAR (www.sedar.com) or the REIT's website (www.nwireit.com).

CEO's Comments:

"2014 marked another year of solid performance for the REIT with continued execution on its plans to consolidate healthcare infrastructure in select international markets while maximizing value for its unitholders", said Paul Dalla Lana, Chief Executive Officer of the REIT. "With the REIT's successful internalization of management in January and today's announcement of its transformative transaction to merge with NorthWest Healthcare Properties REIT, it will be even better positioned to deliver on its strategic objectives in 2015 and beyond as it benefits by increased scale and liquidity, improved alignment and organizational synergies."  

FINANCIAL HIGHLIGHTS












As at
Dec. 31, 2014



As at
Dec. 31, 2013

Operational Information (1)











Number of Properties - 100% of associates





122




113


Gross Leasable Area (sf) - 100% of associates





7,841,695




7,664,605


Occupancy % - 100% of associates





94.8%




94.4%











Summary of Financial Information











Gross Book Value (2)




$

846,271,088



$

756,258,230


Debt - Declaration of Trust (3)




$

436,431,589



$

437,642,388


Debt to Gross Book Value - Declaration of Trust





51.6%




57.9%


Debt - Including convertible debentures (3)




$

508,351,099



$

473,065,388


Debt to Gross Book Value - Including convertible debentures





60.1%




62.6%












Percentage of Mortgages and Loans Payable at Fixed Rates





64.9%




59.1%


Weighted-Average Interest Rate on Fixed Rate Mortgages and Loans





5.82%




6.11%


Adjusted Units Outstanding - period end (4)












Basic





178,983,681




146,046,705



Diluted (7)





179,355,950




146,347,916















For the three
months ended
Dec. 31, 2014



For the twelve
months ended
Dec. 31, 2014











Operating Results











Net Income / (Loss)




$

21,164,556



$

(26,677,731)


NOI




$

10,043,592



$

39,404,046


Funds From Operations ("FFO") (5)




$

3,217,163



$

14,913,677


Adjusted Funds From Operations ("AFFO") (5)




$

7,847,230



$

33,168,413


Distributions (6)




$

9,577,589



$

35,289,470











Per Unit Amounts (4)











FFO per unit - Basic




$

0.02



$

0.09


FFO per unit - fully diluted (7)




$

0.02



$

0.09


AFFO per unit - Basic




$

0.05



$

0.21


AFFO per unit - fully diluted (7)




$

0.05



$

0.21


Distributions per unit




$

0.06



$

0.22


AFFO Payout Ratio





119%




105%


AFFO Payout Ratio - fully diluted (7)





120%




105%











Adjusted Weighted Average Units Outstanding (4)











Basic





170,427,954




158,541,907



Diluted (7)





170,677,808




158,783,786

 

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.nwireit.com).

Notes


(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.


(2)

Gross Book Value is defined as total assets.


(3)

Indebtedness as defined in the Declaration of Trust includes the principal balance of mortgages, securities lending agreement, margin facilities, term loan, line of credit, and deferred consideration. The REIT's total debt also includes convertible debentures (at fair value).


(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 91,068,320 Class B LP and 1,110,580 Class D GP exchangeable units outstanding as at December 31, 2014 and 91,068,320 Class B LP exchangeable units outstanding at December 31, 2013.


(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 fourth quarter 2014 MD&A and reconciled to IFRS-based amounts reported in the consolidated financial statements of the REIT.


(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.


(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.

Rescheduled Q4'14 Earnings Conference Call

The REIT invites you to participate in a conference call with senior management to discuss fourth quarter 2014 results on Thursday, March 12, 2015 at 3:00 pm (EDT). The conference call was previously scheduled for today, Wednesday, March 11, 2015 at 3:00 p.m. Investors are invited to access the call by dialing 647-427-7450 or toll-free 1-888-231-8191, conference ID# 975 927 16. Audio replay of this call will be made available Wednesday, March 12, 2015 beginning at 6:00 pm (EDT) through to Wednesday, March 25, 2015 at 11:59 pm (EDT). To access the recording, please call 1-855-859-2056 or 416-849-0833 and use the reservation number 975 927 16. 

In conjunction with the release of the REIT's fourth quarter 2014 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.nwireit.com/Investors/Presentations.

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 International Healthcare Properties Real Estate Investment Trust

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT's objectives are to: (i) provide its unitholders with stable and growing cash distributions from investments focused on international healthcare properties, on a tax efficient basis; (ii) enhance the value of the REIT's assets and maximize long-term unit value; and (iii) expand the asset base of the REIT. For more information on the REIT, visit www.nwireit.com.

Reader Advisory

This news release contains "forward-looking statements" within the meaning of applicable securities laws. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the ability of the REIT to pay or grow distributions, and the risk that the proposed transaction with NorthWest Healthcare Properties REIT will not be completed on the terms proposed, or at all. The statements in this news release are made as of the date of this release. Although the REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. 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 International Healthcare Properties REIT

For further information: Paul Dalla Lana, CEO, (416) 366-8300 x1001; Teresa Neto, CFO, (416) 366-8300 x1002

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NorthWest International Healthcare Properties REIT

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