Vital Infrastructure Ppty

Welcome to Vital Infrastructure Property Trust Q1 2026 Earnings Conference Call. At this time, all lines have been placed on a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, May 14, 2026. I would now like to turn the conference over to Stephen Hong, Vice President of Investor Relations. Stephen Hong, Vice President of Investor Relations Thank you, operator.

Good morning, everyone, and thanks for participating in our first quarter results conference call. This is Stephen Hong speaking. Joining me are Zach Vaughn, CEO, Stephanie Kramarkovic, CEO of Salt, Mike Brady, President, and Tracey Woodall, COO. Our earnings announcement was released yesterday afternoon, and we posted an updated investor presentation on our website, which listeners can refer to during the call. Following comments, we'll be glad to ask and take questions from analysts. Today's discussion includes four looking statements. As always, we want to caution you that such statements are based on management's assumptions and beliefs. These four looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Please see our public followings on CDAR+, including our MD&A and annual information form for discussion of these risk factors. During this call, we'll also reference certain non-GAAP financial measures. A reconciliation to the most directly comparable IFRS measure is provided in our MD&A and earnings lead. Unless otherwise noted, all amounts discussed today are in Canadian dollars. With that, I will now hand it over to our CEO, Zach Barnes.

Thanks, Stephen. Good morning, everyone. Thank you for joining us today for our Q1 results. In addition to the solid operating results that we're going to discuss in our remarks, we've continued to make progress as we simplify our business, lowering costs. Stephanie's going to give some more details about that specifically, and recycling capital to be redeployed back here. Last quarter, we announced an agreement to sell a portfolio of 33 properties in Europe And I'm pleased to say that the Netherlands portion of this portfolio closed at the end of April, and the remaining assets in Germany are expected to close in Q2. Our share of net proceeds from the entire transaction will be about $145 million, which is going to be redeployed to reduce leverage and support future growth. Also, as a reminder, in late August of this year, we'll also be through our lockup period related to our public shareholdings in New Zealand. These capital recycling opportunities, together with our current liquidity of over $400 million, create significant optionality for new investments going forward. During the quarter, we also reactivated our growth activities in Canada. We closed on the transitional care facility that's long-term leased to the Ottawa Hospital, and we advanced progress on our new development with Royal Victoria Hospital, or RVH, in Barrie, where we received zoning approval in April. Once RVH is completed in 2029, the property is going to generate about $9 million of annual NOI, or almost 4 cents a unit. This is income that's fully contracted. It's long-term, and it's supported by government credit. And as hospitals and health systems across Canada increasingly shift towards outpatient, we're uniquely positioned as a partner of choice and continue to advance discussions with various Canadian health systems in Ontario, Alberta, and Manitoba. We also have an active pipeline of follow-on acquisitions of standing assets at various stages of negotiations across Canada. And in the U.S., we're looking at several opportunities involving large, long-term, least critical healthcare assets and or advancing discussions with potential strategic operating partners. Turning to Q1 results, our same property NOI grew by 3% year over year. This is a great result, especially considering it included higher property expenses resulting from our decision to outsource facility management work in our Canadian portfolio. Absent this impact, our same property NOI growth would have been 4%. In terms of leasing during the quarter, we completed about 324,000 square feet of leasing activity, and we ended the quarter with portfolio occupancy of over 96% and a weighted average lease term of more than 12 years, which is the longest in the REIT sector. From a balance sheet perspective, we've made meaningful progress. Proportionate leverage stands at about 52.5% at the end of the quarter. And we expect this to decline below 50% once we receive all the proceeds from the European sale, with our debt to EBITDA at that time expected to be in about the mid-eight times range. And as I previously mentioned, we have significant available liquidity, more than $400 million, before taking into account any additional proceeds from future recycling activities. Before handing the call over to Stephanie, just a quick update on HealthScope. We continue to work with the receiver and the creditors toward a resolution that would secure our previously disclosed transaction with a new operator. This transaction would allow all of our hospitals to transition to a top-tier not-for-profit operator. And while we would experience a nominal initial financial impact, we would also get the opportunity to participate in the longer-term profitability of those hospitals, which based on what we are seeing across all our assets in Australia, just continue to improve. Now in April, a collective proposal from a number of operators, including our potential new partner was provided to acquire HealthScope's remaining hospitals. So those were the hospitals that did not find a buyer or home during the sales process. If this is approved by the lenders, this transaction would provide a solution for all the HealthScope hospitals, which is critical outcome for all the stakeholders involved. And based on what we've seen so far, the lenders and receivers, the lenders and receiver are actively engaging on this proposal, which is encouraging and, in our view, moves us closer to a resolution. So, to summarize just a few takeaways, first, we delivered a solid quarter with same property NOI growth at the upper end of our target range, even taking into account some property expense increases. Second, we have significant financial flexibility through our existing liquidity and anticipated recycling proceeds. Third, we're actively pursuing growth, both through our hospital and health system partnerships, and through follow-on acquisitions in Canada and the U.S. And fourth, we believe we're getting much closer to a resolution on HealthScope. So we're pleased with the quarter, and the outlook ahead remains quite positive. The top priority for us is to continue to demonstrate the strength of our portfolio by consistently delivering results, which we have been, and continuing to tell our story and attract new capital to vital. With that, I'm going to turn it over to Stephanie.