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Northwest Healthcare Properties REIT posted a 2.6% year-on-year decline in third-quarter 2025 revenue from investment properties to CAD 104.3 million, mainly due to the sale of non-core assets. However, the company recorded a strong turnaround in profitability, reporting a net income of CAD 31.17 million against a loss in the same period last year. Adjusted funds from operations (AFFO) per unit rose to CAD 0.11 from CAD 0.09, supported by cost reductions, higher same-property growth, and a stronger operational focus across key markets.
Northwest Healthcare Properties REIT reported a revenue decline of 2.6% in the third quarter of 2025, with income from investment properties standing at CAD 104.3 million compared to the previous year. The reduction was primarily due to the sale of non-core assets as part of its portfolio streamlining efforts. This decline, however, was partly offset by a 4.4% growth in same-property net operating income (SPNOI), which rose to CAD 76.9 million, reflecting improved performance across regions including North America, Europe, Brazil, and Australasia. Advertisement
The company recorded a significant improvement in profitability during the quarter. Net income reached CAD 31.17 million, reversing a loss of CAD 157.3 million in the same quarter of 2024. The improvement was supported by disciplined expense management, including lower administrative costs. General and administrative expenses, excluding unit-based compensation and termination benefits, decreased to CAD 12.0 million from CAD 12.6 million a year earlier, driven by headcount reductions and operational simplification.
Adjusted funds from operations per unit increased to CAD 0.11 from CAD 0.09 a year ago. The AFFO payout ratio improved to 85% compared to 99% last year, reflecting better earnings retention. The REIT also reported stronger balance sheet metrics, with overall leverage reduced to 48.4% at the end of the quarter from 50% at the end of December 2024. The reduction came from debt repayment and proceeds generated through asset dispositions.
Portfolio performance remained stable, with overall occupancy at 96.9% and a weighted average lease expiry of 13.4 years. The company continues to benefit from long-term lease structures and a diversified tenant mix across healthcare facilities, clinics, and hospitals. In addition, one of its major tenants, Healthscope Pty Ltd, which had been under receivership earlier this year, has now cleared all deferred rent and resumed regular payments, improving the REIT's income visibility.
On the strategic front, Northwest is currently reviewing its European portfolio with assistance from third-party advisors to explore restructuring or potential sale options. The review is aimed at reducing exposure and improving capital efficiency across regions. The REIT also plans to launch a normal course issuer bid (NCIB) beginning 14 November 2025, allowing it to repurchase up to 22.2 million units, representing about 10% of the public float, along with certain convertible debentures. The management stated that the buyback reflects confidence in the REIT's long-term value and capital position.
Analyst sentiment remains mixed, with the average rating on the stock being hold. Out of six analysts, two recommend a buy or strong buy, while four suggest hold, and none have issued a sell rating. The median 12-month price target for the stock stands at CAD 5.50, which is roughly 7% higher than the recent closing price of CAD 5.11.
Source Reuters
5th Jun, 2025
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