TORONTO, June 27, 2016 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) (the "REIT" or "NorthWest") announced today that it has acquired 100% of Generation Healthcare Management Pty Limited ("GHM"), the external investment manager for Generation Healthcare REIT (ASX: GHC.AX) ("GHC"), along with an option to acquire shares in GHC which would bring NorthWest's interest in GHC to approximately 19.9% (the "Transaction").
The Transaction significantly grows Northwest's commitment to Australia, a leading global healthcare market where NorthWest has a long track record of successful investment. GHC is the only Australian-listed healthcare real estate owner, operator and developer, and owns a A$400M portfolio of 17 hospitals, medical centers and aged care facilities centered around the major markets of Sydney, Melbourne and Brisbane.
Acquisition of GHM and a strategic interest in GHC
NorthWest has purchased GHM for A$58.5M (C$56.0M) from APN Property Group Limited ("APN") and senior executives of GHM's management team. The REIT also entered into an option to purchase up to 27.1M units of GHC from entities affiliated with APN and GHM management at a price of $2.20 per GHC share. Upon exercise of the option, and taking into account other GHC units controlled by it, and expected to be controlled by it under a previously disclosed option agreement to acquire approximately 15.5 million units of GHC, NorthWest would own an approximate 19.9% interest in GHC. The existing GHM management team has been retained, and will continue to operate GHC independently. GHC's existing responsible entity, APN Funds Management Limited will also remain also remain in that role, with any future change to the responsible entity requiring the approval of GHC unitholders. The responsible entity of GHC is the trustee of GHC and is required to act in the best interests of GHC unitholders. In addition, APN has agreed to provide certain services to NorthWest for a transition period of up to 2 years to ensure a successful transition.
Significant Benefits of the Transaction
- Enhanced Diversification: Proforma for the Transaction, the REIT's assets under management will increase to $3.1BN ($1.5BN in Australasia) with approximately 26% of Adjusted NOI generated in Australasia on a proportionate basis
- Increased Exposure to Australian Private Healthcare: Australia is the world's 5th largest private healthcare market with large, sophisticated healthcare operators seeking real estate capital
- Improved Portfolio Characteristics: Improves the REIT's already market leading portfolio occupancy and weighted average lease expiry term to 96.3% and 10.3 years, respectively
- Core Healthcare Focus: The Transaction will increase the REIT's Adjusted NOI generated from Hospitals to 42% and will strengthen and grow its relationships with leading Australian healthcare providers, including Healthscope, St John of God and the Epworth Foundation
- Enhanced Organic Growth Prospects: Consistent with the REIT's existing international portfolio, GHC has a significant pipeline (~A$105M) of accretive expansion and development opportunities and almost all of its leases are indexed to inflation
- Access to Australian Capital Markets: With a market capitalisation of ~A$480M and a strong history of outperformance, GHC provides access to a wide unitholder base with significant retail and institutional support
- Accretive: Funded through existing resources and new stock loan financing, the Transaction is expected to be accretive
Commenting on the Transaction, NorthWest Chairman and CEO Paul Dalla Lana said "We are delighted to have acquired the management of, and made a significant investment in, Generation Healthcare REIT. As a long-time investor in Australian healthcare real estate, we recognize and appreciate the strong performance GHC has delivered and the excellent quality of its portfolio and development pipeline. Australia is a core market for NorthWest, and we see there a tremendous opportunity to serve the growing and consolidating healthcare provider market. We look forward to working with GHM management to continue to provide excellent service to their hospital, physician and aged care clients and to growing the business through value-enhancing acquisition and development activities."
Further details on the Transaction are available on the REIT's website at www.nwhreit.com and Generation Healthcare REIT's website at www.generationreit.com.au.
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 137 income-producing properties and 8.9 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 9 offices in 5 countries to serve as a long term real estate partner to leading healthcare operators.
About Generation Healthcare REIT
Generation Healthcare REIT (ASX: GHC), is Australia's only ASX listed healthcare real estate investment entity. The Fund owns 17 properties including hospitals, medical centres, laboratories, residential aged care facilities and other purpose-built healthcare facilities. The Fund partners with high quality healthcare tenants with strongly diversified income streams. The Fund has total assets of approximately $439 million with investments located in Victoria, New South Wales and Queensland.
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
