Press Release

NorthWest Healthcare Properties Real Estate Investment Trust Announces Significant Acquisition, Disposition, and Refinancing Activity and Timing of Fourth Quarter 2017 Results

TORONTO, Feb. 1, 2018 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) (the "REIT") is pleased to announce that it has entered into definitive agreements to acquire three German medical office properties and two German post-acute care hospitals (the "German Acquisitions"), and five hospitals in Australia and New Zealand for an aggregate purchase price of C$314M along with committing C$182M for planned hospital expansions. In addition, the REIT's capital recycling and balance sheet optimization activities are progressing well with the sale of three non-core assets totaling $200M complete or closing in Q1 2018. In addition the REIT completed a new C$476M (A$485M) lending facility to refinance Northwest Australia's portfolio debt, repay higher cost corporate debt, and fund on-going acquisition and development activity. Collectively, once complete, these activities will be immediately accretive as well as increase the REIT's exposure to high quality international healthcare infrastructure assets.

Acquisitions

During Q4, the REIT entered into a series of transactions to significantly expand the REIT's German footprint. The German Acquisitions are comprised of three high quality medical office properties located in Berlin and Hamburg and two post-acute care hospitals operated by Median Kliniken. The combined consideration is C$127M (€83.2M) and will be financed through a combination of property level financing and net proceeds from capital recycling initiatives. The German Acquisitions have a weighted average initial capitalization rate and weighted average lease term of approximately 6.0% and 15 years, respectively. The Hamburg medical office building and one Berlin medical office building acquisition closed in Q4 2017 and Q1 2018, respectively. The second Berlin medical office building is anticipated to close in Q1 2018. Given initial cap rates and attractive property level financing which is expected to come in below 2.5% on a 10 year basis, the German Acquisitions are expected to be immediately accretive to AFFO per unit.  

As previously announced, NorthWest Australia, a wholly owned subsidiary of the REIT, has agreed subject to customary closing conditions to acquire the remaining 50% interest in Epworth Freemasons Hospital for C$52.2M (A$52.6M). In addition, NorthWest Australia has committed to a C$85.3M (A$86M) expansion at the site which is fully leased to the Epworth Foundation. The transactions will be fully funded with property level financing. Further details with respect to these project are available on the REIT's website.

Also during Q4 2017, Vital Trust, a partially owned subsidiary of the REIT, completed the previously announced acquisitions of three high quality New Zealand hospitals from Acurity Health Group ("Acurity"). The combined purchase price for the three hospitals was C$110.6M (NZ$122M) and, in addition, Vital Trust has committed up to C$96.6M (NZ$106.5M) to fully leased future brownfield expansions at the properties over the next four years. All development expenditures are forecast to be rentalized at an approximately 7% yield. In a separate transaction Vital Trust acquired Eden Rehabilitation Hospital for C$23.4M (A$23.8M). Additional information on recent Vital Trust acquisition and development activity is available at http://www.vitalhealthcareproperty.co.nz.

Capital Recycling Initiatives

During Q4 2017, the REIT completed the sale of one Canadian medical office building and one Australian medical office building with a combined sale price of C$32.3M. In addition, during Q1 2018 final conditions related to the $167 million sale of the Dundas Edward Centre ("DEC") in downtown Toronto were waived. The sale of DEC is scheduled to close in Q1 2018. Net proceeds from dispositions are expected to total approximately C$100M and will be redeployed into deleveraging and other capital recycling initiatives.  

Refinancing Activity

NorthWest Australia has now completed a new five year C$481M (A$485M) syndicated term loan facility led by a major Australian bank and includes participation from two Canadian banks. The facility will be advanced in multiple stages with the initial C$247M (A$249M) draw having been used to repay existing debt with a weighted average interest rate of ~5.4%. Further draws will be used to repay additional NorthWest Australia portfolio lending facilities and fund future acquisition and development activity in the region. The new facility bears interest at an all-in initial rate of approximately 4.65%.

Fourth Quarter 2017 Results and Conference Call

The REIT will issue its fourth quarter 2017 financial results for the three months ending December 31, 2017 on Thursday, March 8, 2018, after markets close. 

A conference call will be held on Friday, March 9, 2018 at 10:00 am (EST). Participating on the call will be members of the REIT's senior management team.

Investors are invited to access the call by dialing (647) 427-7450 or toll-free 1 (888) 231-8191, conference ID# 1363869. A recording of this call will be made available Friday, March 9, 2018 beginning at 12:45 pm (ET) through to Friday, March 16, 2018. To access the recording, please call 1 (855) 859-2056 or 416.849.0833 and use the reservation number 1363869.

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 144 income-producing properties and 9.7 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 nine offices in five countries to serve as a long term real estate partner to leading healthcare operators.

This press release contains forward-looking statements which reflect the REIT's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein. The REIT disclaims any obligation to update these forward-looking statements.

SOURCE NorthWest Healthcare Properties Real Estate Investment Trust