Thank you, operator, and good morning, everyone. I appreciate you joining us today.

I'm joined today by Shailen Chande, the REIT's Chief Financial Officer; and Peter Riggin, the REIT's Chief Administrator Officer. Together, we are pleased to share with you our results for the first quarter of 2021.

But first, I'd like to point out that during today's call we may make forward-looking statements as defined under Canadian securities law. While such forward-looking statements reflect management's expectations regarding our business plans and future results, they are necessarily based on assumptions that are subject to uncertainties and risks, which could cause actual results to differ materially.

We direct all of you to the risk factors outlined in our public filings.

Good morning. Sorry, I joined the call a little bit late.

So I apologize if I'm repeating anything. But I wanted to focus a bit more on the potential US entry.

And that you talked about last quarter. Now as you get closer to that entry into the market, presumably you are refining your strategy, can you just maybe quickly remind us of the asset profile being targeted, where those assets are trading today in terms of cap rates, and then whether you have more conviction that the entry will be through a JV format as opposed to 100% subsequence indication?

What you've done in your other regions? Thank you.

Yes, lots in that. So thanks.

You know, I think I'm going to take the high ground on this one, which is, we continue to be focused in the cure side of the business, obviously. So, you know, really between hospitals and medical office, including sort of outpatient and ambulatory type clinics.

So that's our sweet spot. And those would be the areas that we're focused on the US, I think we're in the middle innings of defining and articulating strategy.

And again, I think transactionally a minute, but certainly looking to move to sort of specific decision over the next little bit and to make our first investment seeing later in 2021. You know, I do you expect that anything substantial would involve a partner, although, at this point, you know, getting started, you know, maybe direct as we have in the past, so we're not committed on anything particularly large at the moment.

So I think that's a building part of the portfolio for that.

In any color in terms of how a potential acquisition cap rates made, compared to some recent transactions you've done in other geographies?

Yes, as we know, the US is an incredibly vibrant market. But I think what we can say is that, we see maybe a spectrum of returns between sort of low to mid fives for high quality, existing MOBs in good markets with the characteristics that we like in any event, up into the high sixes, low sevens for hospital opportunities, particularly for profit space, which is a little bit lower focused.

So it's that sort of range of cap rates that we see. Obviously, it's an incredibly vibrant market.

So as I said, there's a lot around that any change in that market that we're looking at.

Got it, true color, thank you for that. And then maybe just shifting focus, I think, Paul to your comment on potential $1 to $2 of not per unit upside on Capri compression and then value creation, presumably within the UK healthcare fund, yields are coming up or Treasury yields are coming up.

But overall demand was quite strong. So how do you were the $1 to $2 coming from?

What type of cap rate impression do you see in the portfolio?

Yes, that's a super good question. So breaking it down.

Now, if we just looked at the current portfolio, if you will, and said, where do we see demand for long term index assets, sort of moving. We could see, again, up to 25 basis points in our portfolio over the certainly over 2021.

And maybe a good chunk of that sooner part of that. And so if you do that math, and but by our estimates, about 10 basis points translates into approximately $120 million of average .

So, big chunks of that, obviously, might be in Australasia, as you know, we have a pretty particular approach to approaching our valuations there. And it's their yearend in June.

So clearly, pretty high visibility in that part of the world, I might reference some recent comments in the vital release that came out around similar issues. So, just given valuation policies, we take those marks sort of semi-annually, and the big ones come at the end of the year, which is in June.

So pretty good visibility there but I just say, an incredibly, positive, at least from a valuation standpoint, environment, certainly starting to see pretty meaningful marks. So there'll be some ideas, but it's coming through the rest of the portfolio as well, in bits and pieces.

So that might make up sort of the more cap rate driven stuff. In terms of value creation, I think what I can say is, we're substantially advanced in our UK initiatives.

And you recall that, we've acquired again £350 million of assets there north of six cap on average. And the market is well, inside of that we've brought certainty through our asset manner, we're bringing certainty through our asset management initiatives to into those portfolios.

And so we see pretty meaningful steps coming broadly along the same timeline, certainly, over the next 90 days and before we report again.

And what would be some of the major remaining milestones with respect to launching that platform?

Yes, still a bit of work to go, it's going to follow these things, the asset management work by a little bit, but we're certainly making progress. And I believe we're in good shape for the second half of ‘21, to put that in place.

And then maybe just last question on the evolution of the asset management franchise. Any incremental progress or thoughts on diversifying the LP investor base over time?

And are you spending more time talking to LP investors relative to history and just maybe some thoughts on the evolution of the LP investor base where we're going to be for five years?

Yes, so every hour of the day, it's a strategic priority for us, as we previously said. And yes, I do think again, in the balance of 2021, we expect to introduce new partners to the business and one of our existing strategic priorities, or perhaps a new one, we're very focused on it.

I do think the market for institutional partners in healthcare real estate as positive and constructive as we've ever seen. So, again, that akin to the historical efforts we've made finding the right partner in the right structures is a high priority for us.

So you know, it's all of those key things that sort of drive the decision and I think we're making good progress there. So yes, I expect to have some positive news over the course of the year and expect to those similar qualitative elements that we have in existing relationships.

Not an injustice as a follow on when you look at that wall of LP capital and say that's targeting healthcare is typically more of a one on one relationship where you have an LP investor with a specific sponsor or are commingled funds something that you're seeing in the industry today?

We're coming at it from those directions to be fair and each has its advantages in lines up with particular strategies, but I can say that we've certainly would like to add some more diversified funds to certain strategies that we have on. We will call out some of the strategies and things that we're seeing are -- for example, our precinct development opportunity or program in Australia, our ambulatory care outpatient strategy, also in Australia.

Again, we've initiated some life sciences investments both in Europe and in Canada, which will be naturally suited. So, we do have a number of new strategies under consideration and scaling and certainly a number of opportunities that might be a little bit differentiated, but some of the long-term core ones that we have in place today involving a little bit more development and leading to a slightly different structure, if you will.

Those are some thoughts around how we're approaching. But I think these are meaningful core programs to us, they're just slightly different characteristics to the individual strategies.

Thank you for the color.

Good morning, everyone. My first question in terms of constant currency basis, I saw vital achieved 10.2% growth in Q1 from 4.3% back in Q4.

I wonder what's the main driver behind the growth? What level should we expect the growth rate to be for the rest of 2021?

Yes, thank you. Shailen, I might take that just because having been on the flight of calls overnight, I was stretching my mind.

So, thank you for that question, otherwise normally, I'd let Shailen handle this one. But we've had a couple meaningful market leases come through the vital portfolio over the recent past.

In general, that's a little bit higher than what we would expect to see from our typical SPNOI with gain with 99% occupied, 99% indexed. So by and large that portfolio should track a little more closely to inflation than what it has, but we did have some back to market activities and that led those higher numbers.

Hopefully that answers your question?

Okay. All right.

That's great. My next question moving pretty much to the leasing side.

I saw that excluding Canada, percent of revenue that's subject to the leasing action . And taxation increased to 98.3% this quarter and I saw, Vital in Australia moving towards 100%.

I wonder if Germany would also pick up this year? Because their percentage is maintaining, stable around 94% quarter over quarter?

Would Germany also getting closer to 100% this year?

Shailen, perhaps, you can answer?

Yes, thanks for that question. I actually had difficulty hearing you, but I think you're referring to occupancy primarily in Germany vis-à-vis our Australian portfolio and Brazil.

So just calling out the asset class in Australia as well as Brazil, I exclusively focused on hospitals and long term assets that are 100% occupied. In Europe, specifically in Germany, which you referenced occupancy, we do have a medical office building platform, which tends to structurally operate at lower occupancy levels than hospitals that 100%, but still very high in that context of 90% to 95%.

I think we view our German occupancy as broadly stabilized and continue to see same property NOI growth opportunities there through the institutionalization of our leases and really bringing all of our leases and medical office buildings up to the Northwest standard and then continued indexation in that portfolio. I think, hopefully, that answered your question.

I had some difficulty hearing you but feel free to reach out online and we can get into it.

Okay, sure. My next question is kind of moving to the development front.

I just want to double-check if you guys can hear me okay, now?

Yes.

Okay, great. So with respect to the current environment in which we see on the call today that inflation across the board.

Are you starting seeing that in your development as well? I wonder if that will move around your development yield for your current development project?

Yes, thanks. Again, noting that the read collectively, I'm not sure, but in terms of whole dollars has just over $400 million of development underway.

Almost all of that development is on fixed price, lump sum contracts with very little cost exposure. Again, they're broadly speaking 100% leased with the small exception of the Canadian development, which is pretty close and really, our contracts are cost plus, if you want to say, in terms of our returns, so very structured and very specific.

I think we're feeling quite confident about the ability to deliver broadly speaking on budget and on schedule the vast majority of those projects, which are substantially advanced as well. The answer is probably not a huge impact coming through our portfolio around construction price increases.

Certainly, beyond that though, we do have a very active development pipe and then a very active focus on adding new expansion assets to the portfolio. I think we've called out that and over time, we'd like to see that in the 10% to 15% part of our overall business.

Certainly, cost plays a big part of kicking off those projects. Although, we're likely to pursue them very closely to the historical types of contracts that we take in the vast majority of the risks on the way in and have the billings broadly latched in most of the contracts sort of cost capped.

Getting things off in this environment will be increasingly difficult for the time being, but I think things will normalize and abate over time and we'll be able to manage through overtime. So kind of a bit of a dual answer where in the existing projects, we're not too concerned at all given that they're all very structured and broadly speaking, hitting their milestones on the stuff that we're working on.

It's a high degree of focus and making sure that we can make the numbers work. There's certainly some inflation in those numbers, but we're still finding attractive opportunities to deliver strong yields and I'd say our objective, as we've historically mentioned on relatively low risk development, is to look for 50 to 100 basis points, maybe 125 if we get lucky on gains in place in market cap rates.

So, we're looking for a relatively structured type of return on our project. I hope that answers your question.

Yes, thank you. That's great.

My last question, kind of moving to the financing side. I see you guys made a great achievement, like lower your leverage and also getting a stronger credit profile.

Also, I know, you guys touch on Oscar financing back in 2019 or 2020. I wonder, would you consider getting to the Oscar market this year in 2021?

If you can provide any color?

Yes. I'll take that.

Thanks for that question. Thanks for the acknowledgement around our leverage.

Year-over-year, we brought leverage down around 500 basis points on a proportionate loan to value basis and around turn and a half in terms of net debt to EBITDA on a proportionate basis. We see a very clear path at the moment to leverage that would be in line with our long-term objectives, hovering just north of seven times net debt EBITDA and just over 40% on a proportionate loan to value basis.

That's probably a bit lower than where we see as long term, but very much squarely within what we consider to be investment grade metrics. So, we think we're closer than we've ever been in terms of being able to access unsecured debt markets.

In terms of timing and when we see that as a potential, I think there's a bit of nuance there around principally where the unsecured debt would sit. Whether it'd be at our at our managed capital platforms versus at the REIT level and we're working through that.

I think we very much do see 2021 as achievable in terms of achieving investment grade metrics. Then thereafter considering where unsecured debt fits best in our structure.

Okay, all right. That's great.

Thanks, Shailen. That's all my questions and I'll turn it back.

Hey, good morning. I just wanted to talk first about the Unity option deal.

I understand that you've got like a 13-month contract in there, is there expectation that something strategic will happen there within the next year or is that just a starter and you guys are ready to roll this position until something happens on that their side?

Yes, I prefer not to really comment on what we might do here, but I just maybe refer to our historical approach to these things and say that we tend to have a pretty consistent approach when it comes to what we're looking to do. So, I'd leave it there.

But, we do look at the business as a high quality business, it's certainly something that if it became an investment, we'd be happy with that. But clearly, that's probably not all we're thinking.

Okay. Shailen, maybe you can answer this.

I remember with the Brookfield, the Australian Hospital deal, when you had taken the derivative position, there was a bit of a wild ride there towards the close of that acquisition and the value of that derivative went all over the place. I'm assuming here on the private side, like we've -- given out as a private REIT, we're not -- we don't really have to worry about that kind of volatility in this going forward?

Yes, Tal. I think that's fair.

On our financial statements, we record the fair market value of the derivative, the option we have in respect of Australian Unity and given that there's no public market, we wouldn't expect to see the same type of volatility. We highlight that the assets, as Paul alluded to, are exceptionally high quality and our long term in nature, so I don't see that type of valuation fluctuation.

Okay and then looking at the US entry, I understand sort of like -- your continue look on the care side of the business, what is your comfort with exposure to serve like public insurance -- like in terms of the proportion that the asset generates its revenues from as opposed to private insurance?

I'll try and answer that, Tal. I think it's quite a nuanced question.

If we have to take it offline with lots of thinking here, but I would call out that. The US market is certainly predominantly a for-profit market.

I knew where would I expect us to be is in that part of the space, which would have the traditional insurance elements to it, where we've got payers, providers and integrated players like HMOs, as an example. So, we're very focused on understanding that and being able to consider and risk adjust in the for-profit market.

Obviously, there's a smaller number of, we'll call it, public or Medicaid and Medicare driven institutions as well. But, again, that's part of the focus to look at that and understand it well, but I think what makes us different and big, is for sure, it's for-profit space.

There's a big focus and that's been part of our ongoing education. Obviously, we've invested in in the ground resources as well to be sure that we have all of that understanding.

We are in existing for-profit spaces, both Brazil and Australia. Although, they have full public systems and each function a little bit differently.

The private industry is around them. They both are substantial parts of our business and of course, we've recently entered the UK and in a mixed environment.

Although that market is more nuanced with the large NHS driver to healthcare, but still, we're invested in the private space, where some of our operators provide exclusively private and some are a mix of NHS and private. I think we're comfortable in looking at the US separately for what it is and what the opportunities and we're really looking to have our own clear view on where risk is and relative risk and return.

I think that's part of the exercise but well done on the path there, we're spending a lot of time thinking about it. And as you've heard me previously say, at least in the for-profit space, I mean, we do see it as a slightly higher risk and slightly higher return business to other markets that we're in and hence some of the earlier cap rates that I called out or transaction prices that we believe represent the market today.

That's kind of our current take on it and we're being very thoughtful and looking to do things that are probably at the higher quality end of the spectrum in all directions to get started.

Okay. I think you had made reference to, not just maybe hospitals, but things like ambulatory care facilities.

When you sort of say something like that, you mean, these are like day surgeries and things like that as opposed to skilled nursing or things along those spectrums?

Yes, that's right. Again, very much on the on the cure side or urgent care maybe.

There's a continuum of services. Patient facilities can be quite infrastructure like and they can be more simple like an urgent care center and there's a real continuum.

In general, our big things in life are a bit more campus oriented and a bit more infrastructure oriented. Those are the things we really like.

Of course, the challenge or an opportunity for US is it's a big menu and there's lots of possibilities. We're really looking at it all and trying to find a good entry point that lines up with our sort of highest conviction things.

Again, we're very much on the cure side, not in that in the care side, where you see skilled nursing and see some of the other stuff, not that those are bad places to be fundamentally, it's just not our focus.

Okay and a little bit closer to home, here in Canada. We have the Long-Term Care Commission here in Ontario, talk about potentially looking for a new development model going forward, where they split sort of responsibility for the provision of capital for the real estate and physical plant of the operation versus the delivery of care.

If the province moved in that kind of direction, would you guys be interested in participating on the capital provision side? Are there any opportunities like that?

Yes. I think the answer in terms of the care space here would be possibly, again, very covenant driven and thinking about that, but certainly having provincial backing and that type of program exists in Quebec, as you're probably aware already and most of the other provinces are considering it.

We are looking at that very selectively. Again, it's that backing in the longer-term nature of those contracts that make the real estate commitments work.

I think what I would call out though and where we are absolutely laser beam focused as in a similar initiative that we see coming through ambulatory and outpatient. So I'd call out, for example, our acreage development, which is a joint venture with Lakeridge Houses in Toronto.

That really speaks to the fact that we're starting to see the health ministry in Ontario and expect in other provinces look for ways to expand out of their traditional hospital footprints and that type of commitment in providing either being driven by hospitals like it was in the case of Lakeridge or providing a smaller number of service providers that exist in the marketplace today or whoever is going to be that service provider with commitments that facilitate the ability to get this infrastructure in place is very important for us. So, we're super constructive on that.

I would say that in addition to long-term care across the country in areas of focus for us and we believe that we're going to see a whole lot of opportunities coming with more direct government involvement, like Lakeridge, or even with some private sector players in providing and building on existing types of things. It's a super relevant trend and we're all over it in our pure business to the extent we can find that a small number of care things that might fit we're looking at it very closely too.

Okay. My last question.

You guys have been in serious asset aggregation mode over the last several years. Has there been any thought of looking back at the portfolio and maybe trying to optimize a little bit more?

I have to think given the growth you guys have experienced, you might look back into it and say, okay, we own these but do we need to own them forever?

Yes. It's a great question, sort of come back and answer it.

Classically, around capital allocation and really thinking about where do we want to have our dollars. So, I think that's a continuous exercise now, but we've gotten a lot better at that over time and we're looking very closely at that through the portfolio now continuously, but certainly, it leads us to some broader schematics.

I will say yes to that and I think we'll have some answers as the year comes on with the things that we do with JVs or otherwise. And I think, you know, I'll just remind that we've kind of been through a continuous sifting program in Canada over the years as an example and, again, we have historically been sellers of things.

As you recall, we were quite broad and wide as we built the platform up and look to get scale. Then we started to refine that back to larger assets and more major markets.

I think there's another sift that's coming probably over time for us as we look at our portfolios across the world around thinking about things like ambulatory and outpatient. So, we're very focused on buildings, for example, that have the capacity to take on these higher acuity initiatives or that fit within catchments or places that are likely to benefit by that.

So that's a pretty logical one to the point of building new ones where we don't have something or where we don't like what we have. I think that's a theme that's already resonating through the portfolio and we're quite focused on it.

We do believe that integration of a continuum of investment in the care space with that focus on major markets and assets that are our precinct or higher acuity based is consistent with our core strategies right now. So, we really are probably to continue to add on.

If it's not in those directions, it's probably very much up for consideration. That's how we're thinking about it today.

Okay, that's great. Thanks very much.

Thank you. I think appreciate everyone's attendance today and wish you well and thank you for listening into our Q1 2021 Northwest Healthcare Properties call.

Thanks.