The healthcare REIT has fully acquired another Brazilian hospital, and has made adjustments to its Canadian portfolio
NorthWest Healthcare Properties REIT has announced the completed $127.1 million acquisition of Hospital Santa Helena, along with a new 10-year financing deal secured by its existing Caxias Hospital. In addition, the REIT has completed its $100 million Canadian portfolio repositioning program.
With the REIT’s acquisition of Hospital Santa Helena – which is expected to get an initial annual rent of $12.1 million from major Brazilian hospital operator Rede D’Or as part of a 25-year lease agreement – the REIT’s Brazil portfolio has expanded to seven hospitals in three major gateway Brazilian cities, continuing its consolidation of private hospitals in the region.
The REIT has also completed a new $64.5 million long-term financing deal, secured by its existing Caxias Hospital leased to Rede D’Or, with a term of 10 years and interest rate of 7%, around 125 bps lower than a recent secured financing it completed in Q2 of this year. The financing, together with the acquisition, is expected to bolster the REIT’s balance sheet via long-term fixed rate financing.
The REIT has also detailed its recent moves to reposition its Canadian portfolio. Through dispositions of non-core assets, which were located in secondary and tertiary Canadian markets, it has generated gross proceeds of $100 million and net proceeds of $25 million after mortgage discharges. Separately, a completed sale and leaseback of a midtown Toronto parking garage to an institional third-party developer has generated net proceeds of approximately $19.5 million.
"The transactions enhance the REIT's high quality portfolio of healthcare real estate as well as being accretive to earnings and improving its financial profile. In particular, we were pleased to see the 125 basis point lower interest rate on our second secured financing this year in Brazil, highlighting the improving domestic credit markets there as well as continued strength of our lead tenant Rede D'Or," said NorthWest Chairman and CEO Paul Dalla Lana.
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With the REIT’s acquisition of Hospital Santa Helena – which is expected to get an initial annual rent of $12.1 million from major Brazilian hospital operator Rede D’Or as part of a 25-year lease agreement – the REIT’s Brazil portfolio has expanded to seven hospitals in three major gateway Brazilian cities, continuing its consolidation of private hospitals in the region.
The REIT has also completed a new $64.5 million long-term financing deal, secured by its existing Caxias Hospital leased to Rede D’Or, with a term of 10 years and interest rate of 7%, around 125 bps lower than a recent secured financing it completed in Q2 of this year. The financing, together with the acquisition, is expected to bolster the REIT’s balance sheet via long-term fixed rate financing.
The REIT has also detailed its recent moves to reposition its Canadian portfolio. Through dispositions of non-core assets, which were located in secondary and tertiary Canadian markets, it has generated gross proceeds of $100 million and net proceeds of $25 million after mortgage discharges. Separately, a completed sale and leaseback of a midtown Toronto parking garage to an institional third-party developer has generated net proceeds of approximately $19.5 million.
"The transactions enhance the REIT's high quality portfolio of healthcare real estate as well as being accretive to earnings and improving its financial profile. In particular, we were pleased to see the 125 basis point lower interest rate on our second secured financing this year in Brazil, highlighting the improving domestic credit markets there as well as continued strength of our lead tenant Rede D'Or," said NorthWest Chairman and CEO Paul Dalla Lana.
Related stories:
Office REIT releases major leasing update
Healthcare REIT moves on Brazil hospital acquisitions
