Slide 1: Full-year results to 30 June 2017
For personal use only Full-year results to 30 June 2017 August 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 full-year highlights Managing Director BWP Management Limited > Results > Portfolio Andrew Ross Portfolio Manager > Core portfolio BWP Management Limited > Alternative use properties David Hawkins Finance Manager > Capital management
Slide 4: 2017 Full-Year Highlights
For personal use only 2017 FULL-YEAR HIGHLIGHTS
Slide 5: 2017 Full-year highlights
2017 Full-year highlights For personal use only $152.5m $112.5m 17.51 cpu $2.74 9.8% pa Total revenue 1.5% Dist. profit 4.2% Distribution 4.3% NTA 7.0% 10 yr total return Portfolio performance Portfolio management Capital management 2.1% 5 4.7% like-for-like rental growth MRRs finalised cost of debt
Slide 6: Results
lan bwp TRUST =| RESULTS
Slide 7: Results – financial performance vs pcp
Results – financial performance vs pcp1 For personal use only FY2017 Previous corresponding period Total revenue $152.5m $150.2m Management expense ratio 0.60% 0.64% Other expenses $5.9m $6.2m Distributable profit (excluding revaluations) $112.5m $107.9m Number of units on issue 642.4m 642.4m Full-y
Slide 8: Results - financial performance six-monthly
Results - financial performance 6 monthly For personal use only 6 months 6 months 6 months to Jun 17 to Dec 16 to Jun 16 Total revenue $76.7m $75.8m $75.5m Management expense ratio 0.60% 0.62% 0.64% Other expenses $2.9m $3.0m $3.1m Distributable profit $57.0m $55.5m $54.6m Property revaluation gains
Slide 9: Results - year financial summary
Results - 5 year financial summary For personal use only 30 June 2017 2016 2015 2014 2013 Revenue $152.5m $150.2m $144.9m $127.4m $109.2m Distributable profit $112.5m $107.9m $101.6m $92.8m $75.8m Total assets $2,312.8m $2,200.5m $2,018.0m $1,837.4m $1,398.7m Borrowings $471.1m $472.3m $485.4m $448.
Slide 10: Results - FY2017 like-for-like rental growth
Results - FY2017 like-for-like rental growth For personal use only Proportion of rental income1 Average increase 5% Market 2.1%2 2.1% 40% Fixed 3.1% like-for-like rental growth 55% CPI 1.4% Like-for-like rental growth FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Rental growth3 2.8% 7.1% 2.9% 3.
Slide 11: Results – FY2017 market rent review outcomes
Results – FY2017 market rent review outcomes For personal use only 5 Bunnings reviews resulted in a 4.5% increase, 1 from FY2016, and 4 due during the period Reviewed rent Property location Customer Passing rent ($pa) Variance Effective date ($pa) Belmont North, NSW1 Bunnings 954,629 1,145,000 19.9%
Slide 12: Portfolio
lan bwp TRUST f=) PORTFOLIO
Slide 13: Portfolio – FY2018 rent reviews
Portfolio – FY2018 rent reviews For personal use only > 3 Bunnings Warehouse market rent reviews due in FY20171 currently in negotiation Rent review type FY18 (all leases) % of First- Second- rental half half income2 Market rent reviews (BWH) CPI 36 18 55% Artarmon, NSW Fixed 19 24 38% Belrose, NSW
Slide 14: Portfolio – capitalisation rate trends
Portfolio – capitalisation rate trends For personal use only > Solid transactional support for new store yields at current levels > Secondary market sales with short remaining term certain seeing strong capitalisation rate compression Bunnings and Masters transaction yields 10.00% 9.00% 8.00% 7.00%
Slide 15: Portfolio – June 2017 revaluation
Portfolio – June 2017 revaluation For personal use only > June 2017 weighted average capitalisation rate 6.59% (Dec 2016: 6.77%) – Stand alone Bunnings Warehouses weighted average cap rate of 6.51% • 11 independent valuations (14% of BWP portfolio value), average cap rate 6.27% • 60 internal valuati
Slide 16: Portfolio – June 2017 independent valuations
Portfolio – June 2017 independent valuations For personal use only Dec-16 Jun-17 Valuation Jun-17 Dec-16 Jun-17 Cap Rate Property State Valuation Valuation Movement Term Certain Cap Rate Cap Rate Movement ($m) ($m) ($m) (years) Brendale QLD 6.00% 33.2 5.75% 34.6 -0.25% 1.4 9.5 Fountain Gate VIC 6.25
Slide 17: Portfolio - weighted average lease expiry profile
Portfolio - weighted average lease expiry profile For personal use only 25% 20% 15% % of rental income 10% 5% 0% FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 1 BWH <12 yrs occ. + upgrades BWH >12 years occ. Showrooms Replacement BWHs Masters Impacted 1 includes both proposed and completed
Slide 18: Core Portfolio
lan bwp TRUST CORE PORTFOLIO
Slide 19: Core portfolio - summary
Core portfolio - summary For personal use only 68 5.5 Years properties portfolio WALE 3.3ha 13,995m2 average land area average lettable area 77% 78% upgrade properties or metro located properties occupied <12yrs 40% 6.28% metro located properties weighted average cap rate within 20kms of CBD 19
Slide 20: Core portfolio - weighted average lease expiry profile
Core portfolio - weighted average lease expiry profile For personal use only 25% 20% % of Core PF rental income 15% 10% 5% 0% FY18 FY19 FY20 1 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 1 BWH <12 yrs occ. + upgrades BWH >12 years occ. Showrooms 1 includes both proposed and completed upgrades 20
Slide 21: Core portfolio – lease expiries next years
Core portfolio – lease expiries next 3 years For personal use only Property Lease expiry Options Rent Comments ($’000pa) Hervey Bay Dec 2017 2 x 5 yrs 1,252 Notification required by Sep 2017; expect option to be exercised Notification required by Sep 2017; strong large format retail and service/ com
Slide 22: Alternative Use Properties
Pe bwp TRUST éizs] ALTERNATIVE USE PROPERTIES
Slide 23: Bunnings Warehouse replacements
Bunnings Warehouse replacements For personal use only Lease Property Progress expiry1 Cairns Feb 2018 Re-leasing campaign ongoing Altona Sep 2018 Option agreement with adjoining owner to acquire property Currently sub-leased to A Mart Furniture. Re-leasing campaign underway, good interest in the Men
Slide 24: Burleigh Heads
Burleigh Heads For personal use only > Adjoins the Stockland Burleigh Shopping Centre > Bunnings has sub-leased to Golddoc (Commonwealth Games) who are expected to vacate in mid-2018 > Progressing discussions with a number of national large format retailers, service station operators and a leading s
Slide 25: Burleigh Heads
Burleigh Heads For personal use only > Demolition of existing building and construct new development option (Above: Architectural perspectives of retail + service station option considered to date) 25
Slide 26: Higher and better use property - Joondalup
Higher and better use property - Joondalup For personal use only > Leased to Automotive Holdings Group. Located within the ‘Joondalup Edge’ precinct in the Joondalup activity centre plan currently with the WA Department of Planning for ratification, which will allow: – high density residential and u
Slide 27: Masters impacted stores
Masters impacted stores For personal use only Property Lease expiry1 Proposed alternative use/s Neighbourhood shopping centre development; advanced negotiations with Dandenong Nov 2017 anchor retailer subject to planning approval Oakleigh Large format retail, online retail distribution and business
Slide 28: Morley
Morley For personal use only > Located 15 kilometres from Perth CBD opposite Galleria Regional Shopping Centre > Galleria Shopping Centre planning approval for $350 million redevelopment (Vicinity/Perron owned), likely to add value to surrounding properties and increase occupier demand in the area >
Slide 29: Hoxton Park
Hoxton Park For personal use only > Located 41 kilometres from Sydney CBD > Hoxton Park identified as an attractive large format retail precinct for retailers due to growth of Western Sydney > Re-configuration design will result in a flexible large format retail tenancy layout > Leasing campaign und
Slide 30: Hoxton Park
For personal use only Hoxton Park 30
Slide 31: Capital Management
la bwp TRUST %$) CAPITAL MANAGEMENT
Slide 32: Capital management – debt facilities
Capital management – debt facilities For personal use only > Average borrowings for the year $479.1m (down 0.9% on previous year) - 4.6% weighted average cost of debt after hedging (2016: 5.0%) - Borrowing costs for the year $22.0m (down 9.5% on pcp) > All bank facilities can be extended a further y
Slide 33: Capital management- debt duration
Capital management- debt duration For personal use only Debt maturity profile 300.0 60.0 200.0 200.0 Volume ($M) 100.0 53.6 30.5 110.0 81.4 79.5 0.0 FY FY FY FY FY 18 19 20 21 22 Bonds Drawn bank facilities Undrawn bank facilities 33
Slide 34: Capital management – interest rate hedging
Capital management – interest rate hedging For personal use only Hedge book profile by Jun 17 Dec 17 Jun 18 Dec 18 Jun 19 Dec 19 half-year ending: Active swaps ($m) 140 128 88 58 98 98 Swap rates (%) Maximum 5.54 5.54 5.54 4.92 4.92 4.92 Minimum 2.39 2.39 2.39 2.39 2.39 2.39 Weighted average (%)1 4.
Slide 35: Primary Business Objectives
For personal use only PRIMARY BUSINESS OBJECTIVES
Slide 36: Primary Business Objectives
Primary Business Objectives For personal use only > Secure and growing income stream > Long term capital growth > Strong customer alignment 36
Slide 37: For personal use only
For personal use only
Slide 38: Outlook
Outlook > Macro economic environment: For personal use only – Demand for Bunnings Warehouse properties expected to remain strong, while capital continues to flow into the Australian property sector. The direction of cap rates will be a function of direction of interest rates > Rental growth: – 54 CP
Slide 39: Further information
Further information For personal use only bwptrust.com.au Responsible entity: BWP Management Limited Tel: +61 8 9327 4356 Email: investorrelations@bwptrust.com.au 39
Slide 40: Appendix A: weighted average lease expiry table
Appendix A: weighted average lease expiry table For personal use only Total Lease Total Rental Year Year End Rental Income Bunnings Showrooms Expiries Income ($) (% of Total) (%) (%) 1 30-Jun-18 9 11,584,767 7.6% 7.0% 0.6% 2 30-Jun-19 14 16,794,357 11.0% 8.9% 2.0% 3 30-Jun-20 8 10,888,846 7.1% 6.9%
Slide 41: Appendix B – future rent reviews and revaluations
Appendix B – future rent reviews and revaluations For personal use only Future market rent reviews for Bunnings Warehouses (“BWH”) and revaluations FY2018 FY2019 FY2020 FY2021 FY2022 BWH market reviews 6 8 11 15 8 % of total1 6% 10% 12% 17% 9% Independent valuations 23 24 34 23 24 % of total2 28% 30