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NorthWest Healthcare Properties Real Estate Investment Trust Announces Successful Completion of its Previously Announced $1.2BN Australian Hospital Portfolio Acquisition

TORONTO , June 6, 2019 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (the "REIT") (NWH-UN.TO), Canada's leading global diversified healthcare real estate investment trust, together with its existing institutional partner announced the successful completion of a $1.2 billion acquisition of 11 freehold hospitals from Healthscope Limited and its affiliates ("Healthscope") in a sale and leaseback transaction (the "Property Transaction").

Commenting on the transaction, Paul Dalla Lana , Chairman and CEO of the REIT said, "The completion of the Healthscope property acquisition marks the end of an intense year-long process. We are proud of the result that we achieved, excited to integrate these exceptional hospitals into our portfolio, and to expand our relationship with Healthscope."

Acquisition of $1.2BN Australian Hospital Portfolio

The Property Transaction represents a rare opportunity to partner with Healthscope – one of Australia's leading private hospital operators with a portfolio of 43 private hospitals concentrated in large metropolitan centers throughout Australia , and to acquire a high-quality portfolio of 11 Australian hospitals. By value, the Portfolio represents approximately 51% of Healthscope's total freehold property portfolio being sold, with the remainder being acquired by a third party investor, on the same terms.

The Portfolio is expected to generate initial annual rental income of approximately $60 million resulting in a weighted average capitalization rate of 5.0%. The Portfolio is 100% occupied by Healthscope on an absolute quadruple net lease basis with the tenant responsible for all property costs including maintenance capital expenditures. The leases have a weighted average expiry of 20 years and are subject to fixed annual rent increases of 2.5% per annum. The rents payable under the leases are market based, representing portfolio EBITDAR coverage for the Portfolio of approximately 2.2x, providing the REIT with a durable cash flow stream as well as built-in organic growth.

In addition, the Portfolio comes with an initial brownfield development and capex opportunity of up to approximately $550 million over 10 years, of which approximately $50 million relates to capex expected to be completed within 3 years. The brownfield development pipeline is forecast to yield approximately 6% on completion representing a 100 basis point premium to the stabilized asset yields and provides an attractive, low risk way to accretively deploy capital to drive earnings growth over time while improving asset performance and quality.

Transaction Financing and Financial Accretion

The Property Transaction has been completed by a joint venture ("JV") between the REIT and an institutional partner, with the REIT's JV partner acquiring a 70% interest and the REIT retaining a 30% interest and providing management. To finance the transaction, the JV has closed new debt facilities on terms consistent with prior releases.

The REIT expects the transaction to generate $0.11 per unit of incremental AFFO in year 1 and an initial $0.09 per unit on a recurring basis. For further information please refer the REIT's investor presentation available on our website (link here).

About NorthWest Healthcare Properties Real Estate Investment Trust

NorthWest Healthcare Properties Real Estate Investment Trust (NWH-UN.TO) (NorthWest) is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario . As at March 31, 2019 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 158 income-producing properties and 11.9 million square feet of gross leasable area located throughout major markets in Canada , Brazil , Europe , 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 200 professionals in nine offices in five 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 Operating Income, adjusted same-property NOI, 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 first quarter ending March 31, 2019 , 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, 2019 .

Forward-Looking Statements

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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