NorthWest International Healthcare Properties REIT completes $205M sale leaseback of a portfolio of leading Brazilian hospitals and confirms increased distribution

TSX-V: MOB.UN

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TORONTO, Dec. 23, 2013 /CNW/ - NorthWest International Healthcare Properties Real Estate Investment Trust (TSXV: MOB.UN) (the "REIT") announced today that it has completed the previously announced acquisition of a portfolio of three private hospitals from Rede D'Or Sao Luiz S.A. ("Rede D'Or") for approximately $205 million (R$ 447 million) (the "Rede D'Or Hospital Portfolio Acquisition"). Concurrent with the closing, Rede D'Or entered into a fully net 25 year leaseback for each of the three properties with an initial annual rent of $19.5 million in the aggregate, representing an average 9.5% initial cap rate, plus annual inflation adjustments. The acquisition is expected to be significantly accretive and serves as the basis for the REIT's recently announced increase in distributions to $0.22/unit, effective January 1, 2014.

The Rede D'Or Hospital Portfolio Acquisition more than doubles the size of the REIT's Brazilian portfolio and increases its international portfolio of healthcare real estate to approximately $758 million - a 310%  increase since inception in October 2012. With interests in 113 hospitals, clinics and medical office buildings in major markets across Australasia, Brazil, Canada and Germany, the REIT's portfolio has a weighted average occupancy of 96.3% (99.2% international) and a weighted average lease expiry of 12.4 years (17.6 international) providing its unitholders with a unique combination of stable and growing distributions.

As part of its acquisition of the Rede D'Or Hospital Portfolio Acquisition, the REIT entered into a new approximately $124 million (R$270 million) term loan denominated in Brazilian Real maturing in December 2014 with BTG Pactual as well as a new $24 million credit facility maturing in January 2017 denominated in Canadian Dollars with Firm Capital Corporation. In connection with the $24 million credit facility, the REIT granted the lender 3,000,000 non-transferable warrants, each of which entitle the holder to acquire a unit of the REIT at a price of $2.15 per unit until January 2, 2017. The units underlying the warrants may not be traded until April 19, 2014.

Additional details on the REIT, the Rede D'Or Hospital Portfolio Acquisition and other recent developments are available on the REIT's website at www.nwireit.com.

Reader Advisory

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding: the initial cap rate of the acquisition; the impact of the acquisition on the REIT's AFFO and AFFO per Unit; the intentions of the REIT with respect to the financing of the acquisition; and the expected pricing of such financing. 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 risk that: the acquisition does not close as expected; financing for the acquisition is not available on the terms contemplated or at all; and foreign exchange rates remain constant. A discussion of other risk factors applicable to the REIT is contained under the heading "Risk Factors" in the short-form prospectus of the REIT dated August 23, 2013, the REIT's annual information form dated March 11, 2013 and audited consolidated financial statements and management's discussion and analysis ("MD&A") for the year ended December 31, 2012, copies of which may be obtained on the SEDAR website at www.sedar.com. The statements in this news release are made as of the date of this release. The REIT does not intend to, and the REIT disclaims any obligation to, update any forward looking information, whether written or oral, or whether as a result of new information, future events or otherwise, except as required by law. 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.

Certain terms used in this press release, such as AFFO and cap rate, are not measures defined under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. AFFO and cap rate, as presented, may not be comparable to similar measures presented by other issuers. AFFO should not be construed as an alternative to net earnings or cash flow from operating activities as determined by IFRS The REIT believes that AFFO is useful in the assessment of its operating performance and that this measure is also useful for valuation purposes and is a relevant and meaningful measure of its ability to earn and distribute cash to unitholders. Examples of reconciliations of AFFO to the most directly comparable measure calculated in accordance with IFRS are provided in the MD&A of the REIT for the three months ended June 30, 2013 and year ending December 31, 2012.

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.

SOURCE: NorthWest International Healthcare Properties Real Estate Investment Trust

Paul Dalla Lana
CEO, NorthWest International Healthcare Properties REIT
[phone] ext. 1001