Steps Taken to Strengthen Balance Sheet and Financial Position
The REIT today announces:
Extension of Credit Facility
An extension to the maturity date of its
Further to the REIT's press release on
Near-Term Non-Core Asset Sales
At the outset of 2023, the REIT identified dispositions of certain non-core assets as a key priority for the year. Sales of assets to date have generated gross sale proceeds of approximately
The REIT intends to use the proceeds from non-core asset sales, net of transaction costs, to repay debt and for general trust purposes, and will continue to review its portfolio for other non-core asset sale candidates with the intention to apply net proceeds to pay down additional high cost debt.
Changes to Monthly Distribution & Declaration of September Distribution
Management has undertaken an analysis of the REIT's distribution payments, with a specific focus on expected 2024 operating results and cash flows, including the maturity of the in-place interest rate caps in Q1 2024 (which is expected to decrease the REIT's AFFO per unit by approximately
The distribution will be paid on
The Board and management believe this decision is prudent and in the best interests of the REIT and its unitholders. The distribution reduction is expected to provide the REIT with financial flexibility to continue advancing its short and long-term objectives while exploring strategic alternatives, with maximizing unitholder value being the principal objective.
Update on Strategic Review Process
As announced on
The Committee has engaged Canadian banks,
The Committee and its advisors have received a broad range of enquiries from third parties, including expressions of interest and non-binding proposals regarding certain potential asset dispositions. The Committee, following consultation with its financial and legal advisors, has determined to explore, among other strategic initiatives, transactions involving the potential sale of all or part of Northwest's
There is no certainty regarding the results of the Committee's strategic review or that any particular transaction will be agreed upon or consummated. The REIT does not intend to comment further on the strategic review until it determines that additional disclosure is appropriate or required.
Continuing Strong Portfolio and Platforms
The REIT's portfolio continues to perform well. Operationally, the REIT's high quality and defensive portfolio continues to deliver strong results, including 5.1% same property net operating income growth through Q2 of 2023 on a year-over-year basis, portfolio occupancy of approximately 96%, a weighted average lease expiry of approximately 13.5 years and approximately 83% of leases are subject to rent indexation, as of Q2 2023. With a portfolio comprising more than 2,000 tenants in 8 countries, the REIT's cash flow is highly diversified across its 231 properties. The REIT currently believes that global partnerships will remain a strategic backbone of the REIT and are likely to be significant to the REIT's future success, one notable example being Northwest's interest in NZX-listed Vital Healthcare Property Trust.
Summary
"The Board supports the management team as they focus on fortifying the REIT's balance sheet" said
About
Forward Looking Information
Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by such terms such as "may," "might," "will," "could," "should," "would," "occur," "expect," "plan," "anticipate," "believe," "intend," "estimate," "predict," "potential," "continue," "likely," "schedule," or the negative thereof or other similar expressions concerning matters that are not historical facts. The forward-looking information in this news release includes statements regarding the REIT's distribution policy, the Committee's strategic review process, including the potential for any transaction involving the REIT or its assets, including the Brazilian or
The REIT has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, financial performance, business strategy and financial needs. These assumptions include, but are not limited to, those relating to the REIT being able to achieve its operating results and cash flows, interest rates remaining stable or decreasing, the REIT's properties continuing to perform, and the completion of various transactions (including related to the
Although the forward-looking statements contained in this news release are based upon assumptions that management of the REIT believe are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the REIT's control, including, among other things, the risk that the REIT's business will be unable to generate the income needed to sustain the new distribution, the transactions described above not being completed on the terms proposed and generating the expected net proceeds, no transaction or other changes will result from the strategic review process and other risks identified in materials filed under the REIT's profile at www.sedar.com from time to time. The forward-looking statements in this news release relate only to events or information as of the date hereof. Except as required by applicable Canadian securities laws, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
SOURCE
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