$2 Billion Australian Healthcare Real Estate Joint VentureAug. 1, 2018 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) today announced that it has entered into a joint venture agreement with a large sovereign wealth fund (the "Institutional Investor").
With an indefinite term and an aggregate gross commitment of A$2.0 billion (debt and equity), the mandate of the JV is to acquire and develop high quality core Australian healthcare real estate, including hospitals and related medical office buildings. The JV will be 70% owned by the Institutional Investor with the REIT owning the remaining 30% interest and acting as investment, property, development and asset manager for which it will be entitled to earn market based management fees, as well as a potential performance fee, subject to achieving certain return thresholds. Paul Dalla Lana – Chairman and CEO of the REIT said: "We are excited to partner with and be in a position to add value to a sophisticated global institutional investor. The JV commitment, focused on Australian healthcare real estate represents one of the largest in the healthcare real estate sector globally, leverages our market leading A$2.5BN platform, and NorthWest's track record in a growth asset class. With a significant pipeline of near-term opportunities, we are confident in our ability to more than double our investments in the region over the coming years."
The JV commitment is expected to be fully deployed over a 4 year period and once full deployed, the REIT expects to benefit from third-party fee bearing assets under management of approximately A$1.4 billion.
As part of the JV commitment, the REIT has also agreed to sell three income producing properties and one development property (collectively the "Seed Portfolio") to the JV with an ascomplete value of approximately A$412 million. The REIT will redeploy net proceeds after repayment of property level financing from the Seed Portfolio sale of approximately A$180 million to fund future JV acquisitions, as well as pursue additional global investment opportunities. The Seed Portfolio sale, which is subject to Australian Foreign Investment Review Board approval, is expected to close in Q3 2018.
To support its anticipated growth in the region, NorthWest also announced the appointment of Craig Mitchell as Chief Executive Officer of its Australian and New Zealand management platform – NorthWest Healthcare Properties Management. Craig was previously CEO of Grocon, Australia's largest privately owned development, construction and funds management company, where he introduced two new global real estate partners and delivered the Commonwealth Games Village and prior to that, Executive Director and Chief Operating Officer (COO) of DEXUS Property Group, where he was responsible for growing its funds management division from A$6.0BN to A$11.0BNbetween 2010 and 2016. His appointment strengthens NorthWest's sector leading management team and will help drive the next stage of our growth and development in the ANZ region.