COMBINING TO CREATE A
LEADING GLOBAL HEALTHCARE REIT
March 12, 2015
DISCLAIMER
This presentation contains information about the proposed combination of NorthWest Healthcare Properties Real Estate Investment Trust (“NWH”) and NorthWest International Healthcare
Properties Real Estate Investment Trust (“NWI”), including forward-looking statements about the entity that will result from their combination. Forward-looking statements are typically identified by
words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may”, “potential” and “should” and similar expressions. Forward-looking
statements reflect current estimates, beliefs and assumptions which are based on NWH’s and NWI ’s perception of historical trends, current conditions and expected future developments, as well as
other factors management believes are appropriate in the circumstances. NWH’s and NWI’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive
and other uncertainties and contingencies regarding future events and, as such, are subject to change. NWH and NWI can give no assurance that such estimates, beliefs and assumptions will prove
to be correct.
This presentation contains forward-looking statements concerning: the extent to which the transaction is accretive; the combined REIT’s financial position, property portfolio, cash flow and growth
prospects; in place and contracted run rates, payout ratios, certain strategic benefits, and operational, competitive and cost synergies; management of the combined REIT; the proposed timing of
the transaction; the anticipated tax treatment of the transaction and NWH’s and NWI’s anticipated future results. Such information should not be considered to be what the actual financial position
or other results of operations would have necessarily been had NWH and NWI operated as the combined REIT.
Numerous risks and uncertainties could cause actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but
not limited to: economic and market factors specific to the healthcare real estate industry; general economic and market factors; local real estate conditions; interest rates; the availability of equity
and debt financing to the combined REIT; efficiencies and operating costs; tax related matters; reliance on key personnel of NWI, NWH and the combined REIT; increases or decreases in the prices of
real estate; the combined REIT’s future stability and growth prospects; the combined REIT’s future profitability and capital needs, including capital expenditures; development and operating risks;
currency risk; project development, expansion targets and operational delays; marketability; additional funding requirements; governmental regulations, licenses and permits; environmental
regulation and liability; competition; uninsured risks; contingent liabilities and guarantees; litigation; health and safety; trustees’ and officers’ conflicts of interest; the failure to satisfy conditions
precedent to the completion of the transaction; the ability of the combined REIT to integrate the operations of NWI and its subsidiaries and; the ability of NWI, NWH and the combined REIT to
continue to develop and grow and management of the combined REIT’s success in anticipating and managing the foregoing factors.
Readers are cautioned that the foregoing list of factors is not exhaustive. Other risks and uncertainties not presently known to NWH and NWI or that NWH and NWI presently believe are not
material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional information on these and other factors that could affect the
operations or financial results of NWH or NWI are included in reports filed by NWH and NWI with applicable securities regulatory authorities and may be accessed through the SEDAR website
(www.sedar.com). This presentation is qualified in its entirety by the disclosure in such reports.
There can be no assurance that the proposed combination will occur or that the anticipated strategic benefits and operational, competitive and cost synergies will be realized. The proposed
combination is subject to various regulatory approvals and the fulfillment of certain other conditions, including unitholder approvals, and there can be no assurance that any such approvals will be
obtained and/or any such conditions will be met. The proposed combination could be modified, restructured or terminated.
Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect NWH’s and NWI’s expectations only as of the date of this presentation. NWH, NWI and the
combined REIT disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
This presentation for contains information provided by each of NWH and NWI. The information concerning each of NWH and NWI contained in this presentation has been provided by NWH and
NWI, as applicable. Although neither NWI nor NWH has knowledge that would indicate that any of information about the other is untrue or incomplete, neither NWI nor NWH assumes any
responsibility for the accuracy or completeness of information about the other. Certain information concerning Vital Healthcare Property Trust contained in this press release has been taken from, or
is based upon, publicly available documents and records on file with regulatory bodies. Although NWI and NWH have no knowledge that would indicate that any of such information is untrue or
incomplete, neither NWI nor NWH was involved in the preparation of any such publicly available documents and neither NWI, NWH, nor any of their officers or trustees, assumes any responsibility
for the accuracy or completeness of such information or the failure by Vital Healthcare Property Trust to disclose events which may have occurred or may affect the completeness or accuracy of
such information but which are unknown to NWI and NWH.
This presentation includes references to funds from operations (“FFO”), adjusted funds from operations (“AFFO”) and net operating income (“NOI”). FFO, AFFO and NOI are not measures recognized
under IFRS and do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies.
1
COMBINING TO CREATE A LEADING GLOBAL HEALTHCARE REIT
“NWI”





Large portfolio of hospitals and
MOBs with ~$850mm in assets(1)
High growth international markets
(Brazil, Germany, Australasia)
Core infrastructure for the provision
of acute and non-acute care
Compelling portfolio metrics with
occupancy of 98.3% and WALE of
~15.1 years
Manager and 24% majority
unitholder in Vital Healthcare
Property Trust (NZE:VHP)
“NWH”






Largest landlord of MOBs in Canada
with ~$1.2bn in assets(1)
Unique portfolio with critical mass
not replicable
Core infrastructure for the provision
of non-acute care
Growing yet defensive asset class
owing to necessity based, high
retention tenancies
Well diversified tenant base
National platform focused on major
markets
Global platform of core
healthcare real estate
infrastructure with ~$2.4bn
in total assets(2)
 Combines stable Canadian
portfolio with high growth
international assets
 122 properties with total GLA of
~6.6mm square feet in Canada,
Brazil, Germany, Australia and New
Zealand(2)
 Compelling portfolio metrics with
occupancy of ~93.9% and WALE of
~7.9 years
 68% MOB / 32% hospital asset mix
on NOI basis
 Significant growth opportunities at
compelling yields
 Enhanced capital markets profile –
scale, float, liquidity
 Simplified, internally managed
corporate structure
1. Total assets as of December 31, 2014 (IFRS)
2. Includes assets of Vital Healthcare Property Trust (“VHP”) on a 100% basis
2
SIGNIFICANT TRANSACTION BENEFITS TO UNITHOLDERS
COMBINING THE
STABILITY OF NWH’S
CANADIAN PORTFOLIO
WITH NWI’S HIGH
GROWTH, CORE
INFRASTRUCTURE
INTERNATIONAL
PORTFOLIO PROVIDES A
COMPELLING
INVESTMENT VEHICLE
BENEFITS TO NWH UNITHOLDERS





Enhances scale and provides exposure to high
growth, international, core infrastructure assets
Improves portfolio characteristics including average
age of buildings, same property NOI growth, WALE
and geographic diversification
Enhances prospects for growth in international
markets where NWI has local operating experience
and well established partnerships
Diversifies into international markets including
Brazil, Germany, Australia and New Zealand
Immediately accretive to AFFO per unit
BENEFITS TO NWI UNITHOLDERS




Enhances scale and increases exposure to NWH’s
large and stable Canadian portfolio
Enhances access to capital to pursue value
enhancing growth opportunities
Stability of NWH’s Canadian portfolio of high
quality healthcare real estate when combined with
NWI’s portfolio in Brazil, Germany, Australia and
New Zealand provides significant diversification
benefits
Reduces overall leverage and enhances balance
sheet flexibility
MUTUAL BENEFITS

Improves operating characteristics due to highly complementary real estate portfolios

Enhances capital markets presence due to larger scale, portfolio diversification and growth prospects

Unifies platform combining management and operating platforms of NWH and NWI

Immediately streamlines costs inherent in managing two separate publicly traded REITs

Larger float expected to improve trading liquidity
3
GLOBAL HEALTHCARE REAL ESTATE INFRASTRUCTURE
COMBINED PORTFOLIO PORTFOLIO SUMMARY
COMPRISES 122
PROPERTIES TOTALING
GLA OF 6.6MM SQUARE
Number of Properties
FEET IN FIVE COUNTRIES
STRONG OPERATING
FUNDAMENTALS WITH
OCCUPANCY OF ~93.9%,
WALE OF ~7.9 YEARS
AND 68%/32%
MOB/HOSPITAL MIX
Canada
Brazil
Germany
Australasia(1)
Combined
Platform
73
5
19
25
122
100% MOB
100% Hospital
100% MOB
15% MOB / 85%
Hospital
68% MOB /
32% Hospital
4.5
1.0
0.7
1.6
6.6
Gross Assets (3)
$1,245
$386
$138
$580
Occupancy
91.9%
100.0%
95.2%
99.5%
93.9%
WALE (Years)
4.5
22.2
4.6
15.2
7.9
Average Building Age
(Years)
~32
~11
~15
~15
~26
Weighted Average Cap
Rate (5)
6.8%
9.4%
6.4%
9.0%
7.5%
Asset Mix (2)
GLA (Million Square
Feet)
1. Shown on a 100% basis. NWI owns a 24% interest in VHP
2. Based on proportionally consolidated NOI
3. Total assets (IFRS) as of December 31, 2014
4. Based on total assets of NWI , NWH and VHP on a 100% basis, including corporate assets, adjusted for NWI equity interest in NWH and VHP; $1.9 billion in proportionate ownership
5. Per IFRS financial statements as of December 31, 2014
4
$2,415
(4)
PORTFOLIO DIVERSIFICATION
DIVERSIFIED PORTFOLIO
IN STRATEGIC
INTERNATIONAL
MARKETS AND STABLE,
CORE HEALTHCARE REAL
ESTATE ASSET CLASSES
PRO FORMA NOI DIVERSIFICATION
BY GEOGRAPHY
PRO FORMA TOP 10 TENANTS BY GROSS RENT
Tenant
Australasia
10%
Germany
7%
Region
% of Gross
Rent (1)
1
Brazil
23%
Rede D'Or SL
15.2%
Bantrel Corporation
3.4%
CLSC / CSSS
2.7%
Sabara
2.0%
Healthe Care
1.9%
Shoppers Drug Mart
1.9%
Lawtons Drugs
1.6%
Alberta Health Services
1.5%
Province of Ontario
1.4%
Centric Health
1.0%
Top 10 Tenants
32.5%
2
3
DIVERSIFIED TENANT
BASE WITH STRATEGIC
PARTNERSHIPS WITH
LEADING HEALTHCARE
OPERATORS IN LOCAL
MARKETS
4
5
Canada
60%
PRO FORMA NOI DIVERSIFICATION
BY ASSET MIX
6
7
8
Hospitals
32%
9
10
MOBs
68%
1. VHP shown at a proportionally consolidated basis
5
CANADA: LARGEST PORTFOLIO OF MOB ASSETS
INVESTMENT AND MARKET OVERVIEW

YT
NT
NU

AB
BC
NL
SK
Spruce Grove (1)
Edmonton (4)
MB
QC
Airdrie (1)
Kamloops (1)

ON
Calgary (7)
PE
Winnipeg (2)
NB
Canada’s largest non-government owner/manager of MOBs and
healthcare related facilities
 Portfolio of 73 properties comprising GLA of 4.5 million sf and
~1,500 tenants
 91.9% occupancy and ~4.5 year WALE
High quality real estate with stable cash flow underpinned by
tenancies supported by the Canadian publicly funded healthcare
system
Provides stability and diversification to a broader international
healthcare real estate portfolio
NS
QC
ON
CANADA
Quebec City (4)
Levis (1)
Sudbury (2)
Joliette (1)
Laval (1)
Lachenaie (1)
Longueuil (2)
Ottawa (1)
Richelieu (1)
PE
NB
Sydney (2)
Moncton (1)
New Glasgow (1)
Fredericton (1)
Lower Sackville (1)
Dartmouth (1)
Halifax (2)
NS
Saint Hubert (1)
Lindsay (1)
Montreal (2)
Orillia (1)
Vaudreuil-Dorion (1)
Midland (1)
Peterborough (1)
Collingwood (1)
Port Hope (1)
Whitby (1)
Mississauga (1)
Toronto (10)
Guelph (2)
Oakville (1)
Cambridge (1)
Hamilton (3)
London (2)
Le Carrefour Medical
Laval, QC
St. Thomas (1)
Chatham (1)
Windsor (2)
6
Dundas-Edward Centre
Toronto, ON
BRAZIL: NEWLY BUILT PRIVATE PAY HOSPITAL ASSETS
INVESTMENT AND MARKET OVERVIEW

RORAIMA
AMAPÁ

Belem
Manaus
Fortaleza
AMAZONAS
PARA

CEARA
MARANHÃO
RIO GRANDE
DO NORTE
Natal
Institutional quality, core healthcare infrastructure assets in
strategic markets including Sao Paulo, Brasilia and Rio de Janiero
 100.0% occupancy and ~22.2 year WALE
Stable cash flow with long-term, triple-net, inflation-indexed
leases, providing consistent organic growth
Long-term relationship with one of the country’s leading hospital
operators Rede D’Or Sao Luiz S.A. (S&P National Rating: A-)
PIAUI
PERNAMBUCO
ACRE
Recife
ALAGOAS
Macieo
TOCANTINS
RONDÔNIA
BAHIA
FEDERAL
DISTRICT
Salvador
Santa Luzia
Coração
Brasilia
GOIAS
MINAS GERAIS
MATO GROSSO
DO SUL
SAO PAULO
Hospital Sabará
Hospital Brasil
RIO DE JANEIRO
Caxias
Rio De Janeiro
Sao Paulo
PARANÁ
SANTA
CATARINA
RIO GRANDE
DO SUL
Port Alegre
Hospital Infantil Sabara
Sao Paulo
7
Hospital Caxias D’Or
Rio de Janeiro
GERMANY: STRATEGICALLY LOCATED MOB ASSETS
INVESTMENT AND MARKET OVERVIEW

SCHLESWIGHOLSTEIN
High quality MOB assets located in the major markets including Berlin,
Frankfurt, Ingolstadt and Leipzig
 95.2% occupancy and ~4.6 year WALE
MECKLENBURG-VORPOMMERN
HAMBURG

BREMEN
BERLIN
NIEDERSACHSEN
Polimedica
Hohenschoen
1 4 Berlin
1
Portfolio

Highly fragmented MOBs market in Germany presents a unique
opportunity to consolidate healthcare infrastructure assets accretively
Fully integrated property management and asset management
capabilities allow efficient operation and deal sourcing
BRANDENBURG
SAXONY-ASPHALT
NORDRHEIN-WESTFALEN
SACHSEN
Fulda
1
11
THURINGIA
Leipzig Portfolio
HESSEN
RHINELAND-PFALZ
Adlershof 1
Berlin
Polimedica
Berlin
Berlin Neukolln
Berlin
Hollis Centre
Ingolstadt
SAARLAND
BAYERN
BADEN-WÜRTTEMBERG
1
Hollis
8
AUSTRALASIA: STRATEGIC INVESTMENT IN VHP
INVESTMENT AND MARKET OVERVIEW
AUSTRALIA


NORTHERN
TERRITORY
QUEENSLAND
Manager and 24% strategic shareholder of Vital Healthcare Property
Trust (NZE:VHP), Australasia’s largest healthcare real estate owner with
18 private hospitals and 7 MOBs
 99.5% occupancy and ~15.2 year WALE
Stable and growing cash flows underpinned by tenancies of high
quality hospital and healthcare operators with long-term, inflationindexed leases
4
WESTERN AUSTRALIA
1
SOUTH AUSTRALIA
1
NEW SOUTH WALES
6
VICTORIA
6
NEW ZEALAND
TASMANIA
1
Epworth Eastern Medical Centre
Melbourne, AU
Marian Centre
Perth, NZ
Epworth Eastern Hospital
Melbourne, AU
Ascot Hospital
Auckland, NZ
6
9
GROWTH STRATEGY OFFERING COMPELLING OPPORTUNITIES
A CANADA “PLUS”
STRATEGY THAT BUILDS
ON THE STABLE
CANADIAN PORTFOLIO
TO PURSUE ATTRACTIVE
INTERNATIONAL
GROWTH INITIATIVES
Target Market
Organic Growth




VARIOUS ACTIONABLE
NEAR TERM GROWTH
OPPORTUNITIES
IDENTIFIED






Corporate

Focus on asset management and asset
harvesting
Focus on new and renewal leasing program
Rental rate indexation linked to inflation
(Q4-14 run-rate of ~6% a year)
Strategic relationship with Rede D’Or SL
provides significant expansion opportunities
at attractive yields
External Growth




Rental rate indexation linked to inflation
(Q4-14 run-rate ~1% a year)
Focus on revenue enhancing activities (ie.
Parking, expense recoveries) and
enhancement of assets

Develop new format MOB facilities
Potential to invest in core hospitals and
ancillary facilities over time
Opportunity for acquisition and
development of hospitals
Potential to partner with clinics, labs and /or
pharmacy consolidator and establish a MOB
segment in Brazil
Continued incremental acquisitions focused
on MOBs and clinics
Rental rate indexation linked to inflation
(Q4-14 run-rate ~3% a year)
~A$68.8mm commitment to 5 new
expansion projects at ~9%

Continued incremental acquisitions of
regional hospitals, clinics and MOBs
Forecast pipeline of ~A$25mm in the next
24 months
Optimize balance sheet to lower cost of
capital
Potential for additional capital sources
10

M&A / investments

Strategic partnerships
ACCRETIVE COMMITTED EXPANSION OPPORTUNITIES
# of Projects
Projects
Development
Opportunity
Project Cost (C$M)
Expected Rental
Yield
Size
2 Developments
Barrie and Toronto
Medical Office Buildings
~$45mm
~8%
107k sq. ft.
# of Projects
2 Expansion Projects
HMB
Coracao
Projects
Development
Opportunity
Hospital expansion
Parking expansion
Project Cost (C$M)
~$60mm
Expected Rental
Yield
Size
~11.5%
240k sq. ft. for 150 beds
92k sq. ft. for 316 parking stalls
# of Projects
Projects
Development
Opportunity
Project Cost (C$M)
Expected Rental
Yield
Size
5 Expansion Projects
Belmont, Hurstville, Marian, Maitland,
and Lingard
Hospital expansions
~$68mm
~9%
~150 new beds
Start Date
Sept 2015 – Jan 2016
Start Date
June 2015
Start Date
In Progress
Duration
14 – 18 months
Duration
12 - 24 months
Duration
2 - 8 months
11
REPRESENTATIVE INVESTMENTS
Dundas-Edward
Centre
Assets
Size
Tenants
MOB + Hospital Admins /
Traditional Office
~410k Square Feet
Province of Ontario, Sick
Kids Hospital, and other
medical tenancies
Rede D’Or Hospital
Portfolio
Assets
Size
Tenants
German MOB
Portfolio
3 Hospitals
Assets
446 Beds / ~573k Square
Feet
Size
Hospital Operator Rede D’Or
S.L.
S&P “A-” Rated
Tenants
14 MOBs
~410k Square Feet
~200 Medical Practitioners
& Related Services
Marian Health
Centre
Assets
Size
Tenants
1 Hospital
31 beds / To expand to 66
beds during 2015
Healthe Care
Cap Rate (1)
~6.0%
Cap Rate (1)
~9.4%
Cap Rate (1)
~6.6%
Cap Rate (1)
~8.5%
Occ.
~94%
Occ.
100%
Occ.
~95%
Occ.
100%
Lease Term
Rental
Increase
Acquisition
Date
~6 Years
Contract Rents
Jan 2011
Lease Term
Rental
Increase
Acquisition
Date
~25 Years
Lease Term
Annual Inflation Index
Dec 2013
1. IFRS cap rate as at December 31, 2014
12
~5 Years
Lease Term
Rental
Increase
Annual Inflation Index
Rental
Increase
Acquisition
Date
Jun 2014 & Aug 2014
Acquisition
Date
~20 Years
Annual Inflation Index
Aug 2014
GLOBAL PLATFORM WITH REGIONAL CAPABILITY AND EXPERTISE
HIGHLY EXPERIENCED
AND ALIGNED EXECUTIVE
MANAGEMENT TEAM
FULLY ESTABLISHED,
SCALABLE REGIONAL
TEAMS WITH EXPERTISE
IN PROPERTY
MANAGEMENT,
ACQUISITIONS AND
DEVELOPMENT
LOCAL MARKET
KNOWLEDGE AND
STRONG RELATIONSHIPS
WITH LEADING
HEALTHCARE PROVIDERS
OVER 180
PROFESSIONALS ACROSS
9 OFFICES IN 5
COUNTRIES
MANAGEMENT – COMBINED REIT
Paul Dalla Lana
Chairman &
CEO


REGIONAL OPERATING PLATFORM AND EXPERTISE
Founder of NorthWest
REITs
Largest unitholder of NWI

Peter Riggin
President –
Canada



Vincent Cozzi
President and
CIO


Teresa Neto
CFO



Mike Brady
EVP, General
Counsel and
Secretary

Current President and CIO
of NWI REIT
Previously Senior Vice
President, Acquisitions at
Ventas
Current CFO of NWI REIT
Previously CFO of KEYreit
and Retrocom REIT
Chartered Accountant
Current EVP, General
Counsel and Secretary of
NWH
Previously a Partner at
Baker & McKenzie LLP and
McLean & Kerr LLP
13

Gerson Amado
Managing
Director



Jan Krizan
Managing
Director
139 professionals
Leading healthcare real estate
asset management platform
Relationships with hospital
operators Rede D’Or SL and
Sabara
2 professionals
Established platform with full
property management and
asset management capabilities
Office in Berlin

19 professionals
David Carr
CEO – VHP
HQ in Toronto plus five
regional offices


President Australasia
Fully integrated real estate
owner and operator


Fully integrated property
management and asset
management
Offices in Auckland and
Melbourne
12 professionals
BOARD OF TRUSTEES
EQUAL BOARD
REPRESENTATION
COMPRISED OF
MAJORITY
INDEPENDENT
TRUSTEES
HIGHLY EXPERIENCED
BOARD OF TRUSTEES
BOARD OF TRUSTEES
Paul Dalla Lana
Chairman & CEO
Martin Barkin
Trustee
Independent
Robert Baron
Trustee
Independent
Bernard Crotty
Trustee
Colin Loudon
Trustee
Independent
David Naylor
Trustee
Independent
Brian Petersen
Trustee
Independent
14

Founder of NorthWest REITs

Largest unitholder of NWI

Director of Viventia Biotech and Viable healthworks

Member of the Faculty of Medicine at the University of Toronto

Current Trustee at NWI; Former Trustee of NWH

Principal and founder of BCGI Baron Consulting

Current Trustee at NWI, NWH and VHP

Principal at Silver and White Management

EVP, Strategy at Oxford Properties Group

Chartered Accountant and Chartered Business Valuator

President emeritus and professor of medicine at the University of Toronto

Director of Barrick Gold and current trustee at NWI

Independent financial consultant and merchant banker

Previous Managing Director at RBC Capital Markets
FINANCIAL PROFILE – MERGECO RUN RATE
FY 2014 (1)



In Place
Run Rate
Contracted
Run Rate
NOI
$39.4
$80.8
$123.8
$134.2
FFO
$14.9
$46.3
$55.4
$62.6
AFFO
$33.2
$38.8
$63.1
$70.3
AFFO / Unit
$0.21
$0.83
$0.88
$0.94
AFFO / Unit
Accretion
n.a.
n.a.
~5%
~12%
Payout
Ratio
105.2%
95.9%
91.3%
85.4%
LTV (Incl. Converts)
60.1%
55.3%
59.8%
59.5%
MERGER ASSUMPTIONS

MergeCo
IN PLACE RUN RATE
Exchange ratio of 0.208 for NWH to NWI units

Cancellation of 11.9mm NWH units currently
held by NWI

Excess liquidity of ~$29mm used to reduce near
term debt obligations

Full year effect of acquisitions, dispositions and changes in
capital structure during 2014
Reflect subsequent events, including:



1. For the year ended December 31, 2014


Elimination of 2014 non-recurring items (i.e. interest rate
subsidy, interest income and F/X adjustments)

Synergies of ~$1.5mm
CONTRACTED RUN RATE
NWI: management internalization and acquisition of
Vital Management
NWI: Brazilian refinancing and rental indexation
NWH: Owen Sound acquisition and Polyclinique
disposition
NWH: $70.1mm mortgage refinancing at 3.1%
Temporary increase to NWH CAPEX costs of $1.5M per
annum to fund non-recurring deferred maintenance
15

Reflect contracted development and expansion
projects in Canada, Brazil and VHP on a leverage
neutral basis, which are expected to complete over the
next 24 months
Commitments are funded regionally with local
financing including headroom on existing revolving
facilities. Assumes issuance of 3.0mm units to fund
equity requirement of ~$29mm
FINANCIAL PROFILE – MERGECO CAPITALIZATION
MERGECO CAPITALIZATION
Market
Capitalization(2)
Enterprise
Value
Total Secured
Debt
Total
Convertible
Debentures
Debt / GBV
Excl. Converts
Debt / GBV
incl. Converts
1.
2.
3.
4.
~$680 Million
~$1,850 Million
~$1,007 Million
~$113 Million
~55%
~60%
MERGECO OUTSTANDING DEBT (1)
Balance O/S
W.A. Term
to Maturity
W.A.
Interest
Rate
Canada – Mortgages
$632.0
4.8
4.6%
Germany – Mortgages
$75.6
4.1
2.3%
Convertible Debentures – NWI
$71.9
4.7
7.1%
Convertible Debentures – NWH
$40.9
5.8
5.3%
Acquisition Facility
$23.0
2.0
8.2%
Brazil Term Loans
$176.3
1.0 (2)
7.3%
Corporate Debt (3)
$84.6
1.1
7.1%
Revolving Credit Facility (Max $50mm)
$15.8
1.2
BA+2.00%
Vendor Note
$41.3
1.0
--
Long Term Debt Obligations
Near Term Debt Obligations
Debt balance and WATM shown as of December 31, 2014 ; Excludes deferred revenue related to Hospital Sabara
Market value based on NWH unit price pre announcement
The Brazil term loans mature between December 22, 2015 and January 2, 2016. On November 19, 2014, the REIT entered into a term sheet with a Brazilian financial institution to refinance up to $170mm of the term loans with a long term (12 year) facility
Excess liquidity of ~$29mm used to reduce near term corporate debt obligations as part of the Transaction
16
FOREIGN EXCHANGE MANAGEMENT
~40% OF PORTFOLIO
NOI GENERATED FROM
INTERNATIONAL
MARKETS
175.0
RENTAL INDEXATION
ACTS AS NATURAL
CURRENCY HEDGE
125.0
LOCAL CURRENCY
PROPERTY / CORPORATE
DEBT TO REDUCE
INVESTMENT RISK
OVER A 10 YEAR PERIOD,
PORTFOLIO INDEX HAS
REMAINED IN-LINE
WITH ITS BASE VALUE
150.0
108.0
100.0
98.7
98.2
88.5
75.0
50.0
Jan-05
Jan-07
Jan-09
Jan-11
BRL/CAD
EUR/CAD
NZD/CAD
Jan-13
Jan-15
Portfolio Average
Historically, Euros and New Zealand Dollars have acted as a natural hedge against
Brazilian Real
Note: Portfolio index weighted by NOI including proportionally consolidated VHP NOI
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KEY DRIVERS OF HEALTH CARE REAL ESTATE
Aging Population


Consolidation & Cost
Savings


Scale required for efficiency and
quality
>65 population cohort growing
rapidly in developed countries
580mm people worldwide over 65 by
2018, ~10% of global population
Increased Healthcare
Spend

Rise of Public Private partnerships

$7.2 trillion global healthcare
spending
 10.6% of world GDP
Growing 5.2% per year
The Rise of Private
Healthcare


Budget pressures affecting the
sustainability of public healthcare
funding
Governments mandating lower costs
and improved quality
Growing Populations and
Wealth Creation


Emerging economies demanding
better access to quality care
Patients seeking more choice and
control
1. Source: Deloitte 2015 Global Healthcare sector outlook
COMPELLING NEED FOR CAPITAL, FACILITIES AND REAL ESTATE SOLUTIONS
18
HEALTHCARE REAL ESTATE OPPORTUNITIES AND PERFORMANCE
THE U.S. EXPERIENCE
$1 Trillion
Estimated U.S. Healthcare Real Estate Market Exceeds $1 Trillion
$100 Billion &
< 15%
Largest Healthcare REITs Acquired More Than $100 Billion over
Last 10 Years, But Still Owns Less than 15% of the Market
Return & Stability
Large U.S Healthcare REITs Historically Generated Better Returns
with Less Volatility
HISTORICAL NOI GROWTH OF “BIG 3 HEALTHCARE REITS (1)
6.0%
4.9%
3.7%
4.0%
2.0%
1.7%
1.5%
2007
2008
2009
2.0%
4.2%
3.3%
-2010
2011
(2.0%)
(4.0%)
1. Source: Green Street Advisors (May 2014)
Big 3 HC REITs
Major Sectors
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2012
2013
KEY DRIVERS OF PRIVATE HEALTHCARE STRATEGY
Canada
Healthcare Regulatory
Framework
Germany

Public

Public / private

Public / private

Large aging population

Growing middle class

Large aging population
Demographic

Healthcare Spending(1) (2)
Brazil


Median population cohort
is ages 50-54
~11% of GDP
US$212bn healthcare
expenditures



Median population cohort
is ages 25-29
~9% of GDP
US$208bn healthcare
expenditures



Australasia


Median population cohort
is ages 45-49

~12% of GDP

US$411bn healthcare
expenditures

Real Estate Opportunities



Limited ability to invest in
hospital infrastructure
Select PPP opportunities

Fragmented ownership

Alberta Health Services,
largest health authority for
the province

Direct investment in public
and private assets,
including hospitals
Sale/leaseback with large
operators

Primarily MOB product

Ability to own clinics

Potential for hospital
ownership



Healthcare Operator
Relationships



SickKids, leading children’s
hospital in Ontario
Other regional family
health teams

Rede D’Or SL, one of the
largest and fastest-growing
operators with 26 hospitals
and ~2,800 beds
Sabara, the leading
children’s hospital in Sao
Paulo
1. OECD average spending of ~9% of GDP
2. Source: Deloitte 2015 Country Healthcare Outlook
20


Family health teams

Clinics / doctors

Public / private
Aging population balanced
by younger cohorts
Median population cohort
is ages 35-44
~11% of GDP
US$172bn healthcare
expenditures
Direct investment in public
and private assets,
including hospitals
PPP opportunities
Sale/leaseback with large
operators
Healthscope, 2nd largest
operator with 44 hospitals /
~4,500 beds
Healthecare, one of the
largest operators with 16
hospitals / ~1,500 beds
TRANSACTION SUMMARY
ARRANGEMENT
AGREEMENT PROVIDES
FOR CUSTOMARY
RECIPROCAL BOARD
SUPPORT
TRANSACTION HIGHLIGHTS

Transaction Overview
Board Support



Governance


Voting Threshold

Deal Protection
Expected Closing
1.
PRO FORMA OWNERSHIP
NWI Unitholders will receive 0.208 of a
NWH unit for each NWI unit held on a
tax-deferred basis
NWH units held by NWI would be
redeemed and cancelled as part of the
transaction
Unanimous support from both NWH and
NWI Boards of Trustees
NWVP
34% (1)
NWH Public
Unitholders
48%
Equal representation from the two entities
at the Board level
Board and management composition
includes both NWI and NWH participation
NWH – 66 2/3 of the votes cast at special
meeting; Approval of a majority of the
votes cast at the NWH special meeting,
other than votes held by NWI
NWI – 66 2/3 of the votes cast at special
meeting

Customary “fiduciary out” provisions

Five day right to match

$17 million reciprocal termination fee

Expected in Q2 2015
Northwest Value Partners Inc. (“NWVP”) currently holds approximately 65% of NWI’s voting units. NWVP is wholly-owned by Paul Dalla Lana, who currently
serves as Chairman of NWH and Chairman and CEO of NWI
21
NWI Public
Unitholders
18%
CONTACT INFORMATION
NORTHWEST INTERNATIONAL HEALTHCARE PROPERTIES REIT
NORTHWEST HEALTHCARE PROPERTIES REIT
Paul Dalla Lana, Chairman & CEO
416-366-8300 Ext. 1001
Peter Riggin, CEO
416-601-3200
KINGSDALE SHAREHOLDER SERVICES
Toll free: 1-877-659-1822
Collect outside North America: 1-416-867-2272
Email: [email protected]
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