Bwp Trust · ASX:BWP
Bwp Trust — Merger or Acquisition (March 2011)
26 slides from Bwp Trust's merger presentation, Mar 30, 2011
Slide 1: Acquisition of 13 Bunnings Warehouse Properties
Bunnings Warehouse Property Trust Acquisition of 13 Bunnings Warehouse Properties Unitholder meeting – 30 March 2011
Slide 2: John Austin, Chairman
John Austin, Chairman Bunnings Property Management Limited www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST
Slide 3: Grant Gernhoefer, General Manager
Grant Gernhoefer General Manager Bunnings Property Management Limited www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST
Slide 4: Background - acquisitions of Bunnings Warehouses
Background - acquisitions of Bunnings Warehouses 25 Number of Bunnings Warehouse properties acquired 20 Number of properties 15 10 5 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year ended 30 June www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST 4
Slide 5: Background – income and capital growth
Background – income and capital growth • Early acquisitions provided the foundations for BWP’s growth Portfolio value history Distributions Per Unit history 1,400 14 1,200 12 1,000 10 cents per unit 800 $ million 8 600 6 400 4 200 2 0 0 FY11F4 Dec-00¹ FY00¹ FY02² Dec-08 Dec-09 Dec-10 FY01 FY03 FY04
Slide 6: Transaction rationale – platform for future growth
Transaction rationale – platform for future growth Significant portfolio of recently developed or new properties • 10 recently completed Bunnings Warehouses (improves the age profile of the Trust’s portfolio) • 3 development sites – brand new and lower statutory charges on acquisition • Long-term
Slide 7: Acquisition portfolio
Acquisition portfolio • Geographically spread - 4 states • All properties are located in metropolitan cities or large regional centres • Increased presence in New South Wales and Western Australia Initial net Purchase price State Property rent ($000) ($000) NSW Dubbo 1,295 15,790 NSW Greenacre 2,215
Slide 8: Summary of commercial terms
Summary of commercial terms Acquisition cost Purchase price $241.7m Acquisition costs $ 11.6m Total outlay $253.3m Rent Commencing rent $ 18.8m Annual reviews 3% On exercise of each option Market reviews (10% caps and collars) Lease term Initial fixed term 10 years Optional terms (tenant) 5 x 5 year
Slide 9: Summary of terms of leases
Summary of terms of leases Acquisition portfolio Existing portfolio Average lease term 35 years 30 years (incl. tenant options) Annual rent reviews 3% fixed Majority CPI Market rent reviews At exercise of each option Most every 5 years (no mid-term review for initial 10 year term) Limits on market N
Slide 10: Financial impact
Financial impact With transaction Without transaction Funding (pro-forma 31 Dec 2010) (at 31 Dec 2010) Equity (units on issue) 515m 427m Borrowings $300m $193m Gearing (borrowings/total assets) 23% 18% Net Tangible Assets (per unit) $1.91 $1.96 Estimated distributions With transaction* Without trans
Slide 11: Funding structure
Funding structure • Risky to commit to a substantial acquisition without funding in advance • Fully debt-funded not viable: • insufficient capacity • results in unsustainable gearing level ~ 34% • no flexibility for further acquisitions some equity required • Conditional placement would provide equi
Slide 12: Advantages of the transaction
Advantages of the transaction • Fixed 3% annual rental growth • Market reviews at the end of each term • Commencing rents low for 8 properties • Improves geographic diversity • Increases average lease expiry www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST 12
Slide 13: Sustainability
Sustainability Sustainability initiatives included in most of the Bunnings Warehouse: • Water collection and recycling for toilets and nursery irrigation • Energy efficient in-store lighting • LED lighting in nursery and car park • Solar and heat recovery hot water systems Sustainability initiatives
Slide 14: Disadvantages of the transaction
Disadvantages of the transaction • Reduced distribution per unit for the six months to 30 June 2011 • Decrease in Net Tangible Asset backing per unit (resulting from issuing additional units) • New properties’ rental growth likely to be lower than existing portfolio in medium term (...but, longer te
Slide 15: Summary
Summary • Proposed acquisition of a portfolio of 13 properties for $242m is largest single proposed acquisition for the Trust since it listed in 1998 • Acquisition complements BWP’s existing portfolio and enhances the quality of the Trust’s portfolio (growth platform) • Consistent with the Trust’s c
Slide 16: Review of operations
Review of operations www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST
Slide 17: Acquisition & divestment
Acquisition & divestment Acquired: Port Melbourne, Victoria • Established Bunnings Warehouse • Acquired December 2010 • 2.5km from Melbourne CBD • Purchase price $24.0m + $1.4m costs • Passing rent $1.65m (review to CPI March 2011) Sold: Canning Vale, WA (Oct 2010) • Industrial property (ex-Blackwoo
Slide 18: Rocklea, Queensland
Rocklea, Queensland $3.8m upgrade Completion: 2nd half 2011 Retail area increase: 2,893m2 Annual rent increase: $0.31m New lease: 10 years + 10 years Date: 13 January 2011 Source: Channel 9, Today show www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST 18
Slide 19: Upgrade – Broadmeadows, Victoria
Upgrade – Broadmeadows, Victoria $5.9m upgrade Completed: Dec 2010 Retail area increase: 3,824m2 Annual rent increase: $0.47m New lease: 10 years + 10 years www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST 19
Slide 20: Other developments in the pipeline
Other developments in the pipeline Fyshwick, ACT $15m redevelopment Minchinbury, NSW Completion: June 2012 $4m adjoining land acquisition Retail area increase: 7,082m2 Settlement: May 2011 Annual rent increase: $0.55m Land area: approx. 5,186m2 Non-reviewable: $1.05m pa for Purpose: Expand existing
Slide 21: Bank funding
Bank funding • Bank bill facilities with 4 main Australian banks • Refinancing discussions progressing well, finalising terms with NAB and CBA • Generally, market pricing and terms improving and reflected in BWP’s discussions with banks to date • Portfolio Acquisition expected to improve cost of bor
Slide 22: Woolworths hardware and home improvement
Woolworths hardware and home improvement Assessment of impact on hardware industry and property market purely speculative at this stage Potential positives for BWP • Reinforces the success of the big-box hardware format • Creates competitive market for properties – land values and market rents Shoul
Slide 23: Further information
Further information Visit: www.bwptrust.com.au Responsible entity: Bunnings Property Management Limited Tel: (08) 9327 4356 Email: ggernhoefer@bwptrust.com.au The information provided in this presentation should be considered together with the financial statements for the period and previous periods
Slide 24: Formal business of Unitholder meeting
Formal business of Unitholder meeting John Austin, Chairman Bunnings Property Management Limited www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST
Slide 25: Questions
Questions www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST
Slide 26: Thank you
Thank you www.bwptrust.com.au BUNNINGS WAREHOUSE PROPERTY TRUST