NorthWest International Healthcare Properties REIT Releases Third Quarter 2014 Results

TSX-V: MOB.UN

TORONTO, Nov. 27, 2014 /CNW/ - NorthWest International Healthcare Properties REIT ("NWI" or the "REIT") announced today that it has released its results for the three and nine month period ended September 30, 2014.

The REIT's third quarter of 2014 delivered solid financial results posting an 8.4% increase in Net Operating Income ("NOI") versus the second quarter of 2014, nearly one and a half times the NOI relative to the same quarter last year. Further, Adjusted Funds From Operations ("AFFO") grew approximately 1% relative to the second quarter of 2014 and approximately 42% relative to the same quarter of last year, largely due to the strength of our growing NOI.

Key highlights from the REIT's financial and operating results for the three and nine month period ended September 30, 2014 include:

• Growth in total assets to $863.8 million, up $107.5 million from the beginning of 2014;
• Closed the $16.1 million acquisition of the Hohenschoenhausen medical office building in the city of Berlin;
• Recognition of a $16.0 million valuation gain in our Brazilian portfolio of 5 hospital assets, largely driven by incremental NOI as a result of increased rents associated with the portfolio's indexed leases;
• NOI of $10.5 million in Q3'14, representing a 144.5% increase over the same quarter last year (YTD NOI of $29.4 million);
• AFFO per unit (basic) of $0.05 for Q3'14, or $0.21 per Unit on an annualized basis, largely consistent with the previous two quarters of 2014 (AFFO per unit of $0.16 for the nine months ended September 30, 2014);
• AFFO payout ratio of 104% (AFFO payout ratio of 101% for the nine months ended September 30, 2014);
• Same property NOI growth of 9.7% driven by indexation of approximately 99% of the REIT's international property revenues;
• Leading portfolio occupancy at 96.0% on a proportionate share basis (Canada = 91.8%; International = 98.3%), consistent with the second quarter of 2014;
• Weighted average lease term to maturity of 11.4 years on a proportionate share basis (Canada = 4.6 years; International = 15.3 years), consistent with the second quarter; and
• In September 2014, the REIT closed a successful $38.75 million bought deal unsecured convertible debt offering.

Subsequent Events

In the third quarter of 2014 and subsequently, the REIT successfully refinanced all 2014 loan maturities. The REIT extended three corporate loans with 2014 maturities, both in Canada and New Zealand, each extending for a further one year period. In addition, subsequent to the third quarter of 2014, the REIT entered contracts to renew its existing Brazilian term loans for a one year period and entered into new long-term financing arrangements that will provide stable, 12-year financing over the majority of its Brazilian portfolio and that will significantly extend the REIT's overall debt maturity profile.

On October 17, 2014, the REIT announced the appointment of Mr. Vincent Cozzi as Co-President and Chief Investment Officer of the REIT. Prior to joining the REIT, Mr. Cozzi was a Senior Vice President of Ventas, Inc., a U.S. healthcare REIT, and Executive Vice President and Chief Investment Officer of its Lillibridge Healthcare Services subsidiary. Mr. Cozzi will lead the REIT's international investment initiatives as well as oversee its strategic investments in Canada and Australia/New Zealand.

On November 25, 2014, the REIT closed an equity offering of 13,954,000 Trust Units. The Trust Units were issued at a price of $2.15 per Trust Unit, for gross proceeds of $30,001,100.

"In the third quarter of 2014 and in the months subsequent, the REIT delivered on its commitments to successfully refinance its 2014 debt maturities and to close the final property of its significant German medical office portfolio acquisition this year," said Paul Dalla Lana, Chief Executive Officer of the REIT. "The REIT can now look forward to the final months of the year and continue to focus on a number of initiatives including; the completion of the long-term refinancing of its Brazil term loans and its management internalization initiative; as well as continuing to source new accretive acquisition and development opportunities for 2015."  

FINANCIAL HIGHLIGHTS
					As at Sep. 30, 2014				As at Dec. 31, 2013
Operational Information ^(1)
Number of Properties - 100% of associates						122				113
Gross Leasable Area (sf) - 100% of associates						7,891,572				7,664,605
Occupancy % - 100% of associates						94.7%				94.4%
Summary of Financial Information
Gross Book Value ^(2)					$	863,768,660			$	756,258,230
Debt - Declaration of Trust ^(3)					$	483,808,250			$	437,642,389
Debt to Gross Book Value - Declaration of Trust						56.0%				57.9%
Debt - Including convertible debentures ^(3)					$	557,153,810			$	473,065,389
Debt to Gross Book Value - Including convertible debentures						64.5%				62.6%
Percentage of Mortgages and Loans Payable at Fixed Rates						65.6%				59.1%
Weighted-Average Interest Rate on Fixed Rate Mortgages and Loans Payable						5.59%				6.11%
Adjusted Units Outstanding - period end ^(4)
	Basic					164,478,610				146,046,705
	Diluted ^(7)					164,868,636				146,347,916
					For the three months ended Sep. 30, 2014				For the nine months ended Sep. 30, 2014
Operating Results
Net Income / (Loss)					$	(11,922,697)			$	(47,842,286)
NOI					$	10,470,000			$	29,360,454
Funds From Operations ("FFO") ^(5)					$	3,878,945			$	11,696,515
Adjusted Funds From Operations ("AFFO") ^(5)					$	8,620,918			$	25,321,184
Distributions ^(6)					$	8,981,352			$	25,711,881
Per Unit Amounts ^(4)
FFO per unit - Basic					$	0.02			$	0.08
FFO per unit -  fully diluted  ^(7)					$	0.02			$	0.08
AFFO per unit - Basic					$	0.05			$	0.16
AFFO per unit - fully diluted  ^(7)					$	0.05			$	0.16
Distributions per unit					$	0.06			$	0.17
AFFO Payout Ratio						104%				101%
AFFO Payout Ratio - fully diluted ^(7)						104%				101%
Adjusted Weighted Average Units Outstanding ^(4)
Basic						162,384,317				154,536,353
Diluted ^(7)						162,612,832				154,742,238

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 Trust and Northwest Healthcare Properties REIT ("NWHP REIT"). The REIT has an exposure to an approximate 24% interest in Vital Trust and approximate 26% 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 September 30, 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 third 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.

In conjunction with the release of the REIT's third quarter 2014 financial results, the REIT will be posting 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 management internalization, 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 April 23, 2014, audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2013, and the REIT's short form prospectus dated November 18, 2014, copies of which each may be obtained on the SEDAR website at www.sedar.com.

SOURCE: NorthWest International Healthcare Properties REIT

Paul Dalla Lana, CEO, [phone] x1001; Teresa Neto, CFO, [phone] x1002