Slide 1: Half-year Results to 31 December 2016
For personal use only Half-year Results to 31 December 2016 February 2017
Slide 2: Important Notice
Important Notice For personal use only The information provided in this presentation should be considered together with the financial statements for the period and previous periods, ASX announcements and other information available on the Trust’s website. This presentation has been prepared by BWP M
Slide 3: Presentation Outline
Presentation Outline For personal use only Michael Wedgwood > 2017 half-year highlights Managing Director BWP Management Limited > Results Andrew Ross > Portfolio Portfolio Manager BWP Management Limited > Capital management David Hawkins > Primary business Finance Manager objectives BWP Management
Slide 4: 2017 Half-Year Highlights
For personal use only 2017 HALF-YEAR HIGHLIGHTS
Slide 5: 2017 half-year highlights
2017 half-year highlights For personal use only $75.8m $55.5m 8.63 cpu $2.60 10.6% pa Total income 1.5% Dist. profit 4.1% Distribution 4.1% NTA 3.1% 10 yr total return Portfolio performance Portfolio management Capital management 2.4% 5.5% 4.6% like-for-like rental growth 4 MRRs finalised cost of de
Slide 6: Results
lan bwp TRUST 2'\ RESULTS
Slide 7: Results - financial performance
Results - financial performance 6 monthly For personal use only 6 months 6 months 6 months to Dec 16 to Jun 16 to Dec 15 Total income $75.8m $75.5m $74.7m Management expense ratio 0.62% 0.64% 0.66% Other expenses $3.0m $3.1m $3.1m Distributable profit $55.5m $54.6m $53.3m Property revaluation gains
Slide 8: Portfolio
lan bwp TRUST PORTFOLIO
Slide 9: Market rent review outcomes
Portfolio – market rent review outcomes Four Bunnings reviews resulted in a 5.5% increase, 1 from FY2016, and 3 due during the period For personal use only Reviewed rent1 Property location Customer Passing rent ($pa) Variance Effective date ($pa) Belmont North2 Bunnings 954,629 1,145,000 19.9% 5-Mar
Slide 10: Capitalisation rate trends
Portfolio – capitalisation rate trends For personal use only > Acquisition yields remain low, largely driven by the private investor market > Compression has been particularly evident in the hardware and home improvement sector with the most recent Bunnings Warehouse transactions yielding approximat
Slide 11: December 2016 revaluation
Portfolio – December 2016 revaluation > December 2016 weighted average capitalisation rate 6.77% (June 2016: 6.77%) For personal use only – 23 independent valuations (27% of BWP portfolio value), average cap rate 7.16% – 57 internal valuations, average cap rate 6.62% – Stand alone Bunnings Warehouse
Slide 12: Bunnings lease expiries next years
Portfolio – Bunnings lease expiries next 3 years Property Lease expiry Options Rent ($’000pa) Comments For personal use only Gladstone Feb 2017 3 x 5 yrs 1,138 Further 5 year option exercised, lease expiry now Feb 2022 Oakleigh South Mar 2017 2 x 5 yrs 1,963 Extended to Mar 2018 Dandenong Nov 2017 2
Slide 13: Weighted average lease expiry profile
Portfolio – weighted average lease expiry profile 25% For personal use only 20% 15% % of Rental Income 10% 5% 0% CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26 CY27 CY28 BWH <12 yrs occ. + upgrades 1 BWH >12 years occ. Showrooms BWH Replacement Masters Impacted > 40% of Bunnings Warehouse stores
Slide 14: Bunnings Warehouse replacements
Portfolio – Bunnings Warehouse replacements For personal use only Lease Property Progress expiry1 Cairns Feb 2018 Discussions progressing with a potential lessee Altona Sep 2018 Option agreement expired, discussions continuing with adjoining owner Burleigh Heads Oct 2018 Re-leasing/re-formatting dis
Slide 15: Masters impacted stores
Portfolio – Masters impacted stores For personal use only > On 24 Aug 2016, Woolworths announced the sale of the Masters property portfolio (40 freehold trading locations, 21 leasehold trading locations and 21 freehold development locations) to Home Consortium (“Home”), subject to Lowe’s (Woolworths
Slide 16: Masters impacted stores
Portfolio – Masters impacted stores For personal use only Property Lease expiry1 Proposed alternative use Dandenong Nov 2017 Neighbourhood shopping centre development Oakleigh Mar 2018 Large format retail, long term residential mixed use development South Mandurah Nov 2018 Large format retail Morley
Slide 17: Replacement store process
Portfolio – Replacement store process For personal use only > For any store at risk of vacancy (i.e. Bunnings replacement stores and Masters impacted stores), the Trust takes immediate action to establish a repositioning or divestment strategy. > Generally this process involves: – Identifying all of
Slide 18: Capital Management
lan bwp TRUST i$ ) CAPITAL MANAGEMENT
Slide 19: Capital management – debt facilities
Capital management – debt facilities > Average borrowings for the half-year $477.0m (down 0.9% on previous year) For personal use only - 4.69% weighted average cost of debt after hedging (2015: 5.08%) - Borrowing costs for the half-year $11.3m (down 8.4% on pcp) > All bank facilities can be extended
Slide 20: Capital management – interest rate hedging
Capital management – interest rate hedging For personal use only Hedge book profile by Dec 16 Jun 17 Dec 17 Jun 18 Dec 18 Jun 19 half-year ending: Active swaps ($m) 165 140 128 88 58 98 Swap rates (%) Maximum 5.54 5.54 5.54 5.54 4.92 4.92 Minimum 2.39 2.39 2.39 2.39 2.39 2.39 Weighted average (%)1 4
Slide 21: Primary Business Objectives
For personal use only PRIMARY BUSINESS OBJECTIVES
Slide 22: Primary Business Objectives
Primary Business Objectives > Secure and growing income stream For personal use only > Long term capital growth > Strong customer alignment 22
Slide 23: For personal use only
For personal use only
Slide 24: Outlook
Outlook > Rental growth: For personal use only – Increased rental income from upgrades completed in FY2016 – 19 CPI / 26 fixed rent reviews in second half FY2017 – 4 Bunnings MRR’s to be finalised in second half FY2017 > Re-positioning of vacated or to be vacated stores: – For properties vacated or
Slide 25: Further information
Further information For personal use only bwptrust.com.au Responsible entity: BWP Management Limited Tel: +61 8 9327 4356 Email: investorrelations@bwptrust.com.au 25