In a July 21 release, Toronto-based NorthWest Healthcare Properties Real Estate Investment Trust announced the completion of the previously disclosed $25.7-million acquisition of Hospital Ifor. The same release reports that the REIT waived due diligence for the separate, previously disclosed $117m acquisition of Hospital Santa Helena, subject to customary closing adjustments.
Together, the transactions expand the NorthWest's Brazil portfolio to seven hospitals concentrated around major gateway cities Sao Paulo, Brasilia, and Rio De Janeiro. They also represent another step in the REIT’s continuing consolidation of private hospitals in the region.
Located in a densely populated commercial hub within Sao Paulo, Hospital Ifor is a specialist orthopedic hospital that has 60 beds and six surgical suites. Its acquisition was funded using existing resources from the REIT's recent long-term financing of its Hospital e Maternidade Brasil asset, and is expected to be immediately accretive. Concurrent with the acquisition, private hospital operator Rede D’or has entered into a new, fully net 25-year lease with an initial annual rent of $2.8 million. The lease comes with three 25-year renewal options.
On the other hand, Hospital Santa Helena is a general hospital situated in the north hospital sector of Brasilia, the federal capital of Brazil. The healthcare property is comprised of 234 beds and 16 surgical units. Its pending acquisition is expected to be completed during the third quarter of 2016. Concurrent with the closing, Rede D'Or will also enter into a new, fully net 25-year lease at an initial annual rent of $11.1m, and will also have three 25-year renewal options with the lease. The pending acquisition is expected to be funded partly through net proceeds from the REIT's recent $122.8-million bought deal financing and concurrent $5m private placement, along with placement of new long-term financing secured by the REIT's existing Caxias Hospital for an estimated amount of $51.9 million.
“The Transactions further strengthen the REIT's relationship with Rede D'Or – Brazil's largest private hospital operator in Brazil with a Fitch credit rating of 'AA' on a National scale and to 'BB+' on a Global scale,” says NorthWest Chairman and CEO Paul Dalla Lana. “Rede D'Or operates approximately 4,500 beds across 29 owned and two managed hospitals, in addition to 35 oncology clinics, with a presence in Rio de Janeiro, Sao Paulo, Pernambuco and Brasilia. The REIT is Rede D'Or's largest landlord and a key partner in its growth initiatives."
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