Bwp Trust · ASX:BWP
Bwp Trust — H1 FY2020 Earnings Presentation
29 slides from Bwp Trust's earnings presentation, Feb 4, 2020
Slide 1: Half-year results to 31 December 2019
For personal use only Half-year results to 31 December 2019 February 2020
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 >Summary Managing Director BWP Management Limited >Results Andrew Ross >Portfolio Portfolio Manager >Core portfolio BWP Management Limited >Alternative use properties David Hawkins Finance Manager >Capital management BWP Management Limited
Slide 4: Summary
Summary For personal use only Hawthorn, VIC 4 SUMMARY | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 5: 2019/20 half-year at a glance
2019/20 half-year at a glance For personal use only $76.2m $57.9m ⇧ 9.02 cpu ⇧ $3.04 ⇧ 14.5 % pa Total revenue 3.5%1 Dist. amount 1.0%1 Distribution 1.0%1 NTA 5.2%1 10 yr total return PORTFOLIO PORTFOLIO CAPITAL PERFORMANCE MANAGEMENT MANAGEMENT 2.2% 97.5% A- S&P rating/ like-for-like rental growth
Slide 6: Results
Results For personal use only Southport, QLD 6 RESULTS | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 7: Financial performance
Financial performance 6 monthly For personal use only 6 months to 6 months to Dec 19 Dec 18 Total revenue $76.2m $79.0m Management expense ratio 0.63% 0.62% Other expenses $4.2m $3.5m Distributable amount $57.9m $57.4m1 Property net revaluation gains $78.5m $20.1m Net profit including property reval
Slide 8: Portfolio
Portfolio For personal use only Maribyrnong, VIC 8 PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 9: FY2020 Bunnings market rent review outcomes
FY2020 Bunnings market rent review outcomes For personal use only > 4 Bunnings market rent reviews from FY2019 were resolved during the six months to 31 December 2019 Property Passing rent Reviewed rent Variance Effective date location ($pa) ($pa) (%) Balcatta, WA1,2 2,336,761 2,220,000 (5.0) 23-Sep
Slide 10: Capitalisation rate trends
Capitalisation rate trends For personal use only > New Bunnings Warehouse store yields continue to tighten with the most recent transaction recorded at 4.5% Bunnings transaction yields 10.00% 9.00% 8.00% 7.00% Bunnings Portfolio Acquisitions by BWP 6.00% 5.00% 4.00% 3.00% Jun‐10 Jan‐11 Jul‐11 Feb‐12
Slide 11: December 2019 revaluation
December 2019 revaluation For personal use only > December 2019 weighted average capitalisation rate 6.08% (June 2019: 6.30%) – 18 independent valuations (25% of BWP portfolio value), average cap rate 6.00% – 57 internal valuations, average cap rate 6.11% – Stand alone Bunnings Warehouses weighted a
Slide 12: December 2019 independent valuations
December 2019 independent valuations For personal use only Jun-19 Dec-19 Valuation Dec-19 Jun-19 Dec-19 Cap Rate Property State Valuation Valuation Movement Term Certain Cap Rate Cap Rate Movement ($m) ($m) ($m) (years) Fyshwick ACT 6.25% 24.0 6.25% 24.3 0.00% 0.3 5.0 Dubbo NSW 7.00% 22.6 6.75% 24.0
Slide 13: December 2019 independent valuations (continued)
December 2019 independent valuations (continued) For personal use only Jun-19 Dec-19 Valuation Dec-19 Jun-19 Dec-19 Cap Rate Property State Valuation Valuation Movement Term Certain Cap Rate Cap Rate Movement ($m) ($m) ($m) (years) Coburg VIC 6.75% 66.7 6.50% 70.0 -0.25% 3.3 2.9 Port Melbourne VIC 4
Slide 14: Core portfolio
Core portfolio For personal use only Mornington, VIC 14 CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 15: Core portfolio summary
Core portfolio summary For personal use only 67 4.3 years properties portfolio WALE 14,204m2 3.3 ha average lettable average land area area 75% 82% upgrade metro located properties or properties occupied <12yrs 5.93% weighted average cap rate 15 CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 16: Weighted average lease expiry profile
Weighted average lease expiry profile For personal use only 25% 20% 15% % of Rental Income 10% 5% 0% CY20 CY21 CY22 CY23 CY24 CY25 CY26 CY27 CY28 CY29 Beyond 1 BWH <12 yrs occ. + upgrades BWH >12 years occ. Showrooms 1 Includes both proposed and completed upgrades 16 CORE PORTFOLIO | HALF-YEAR RESUL
Slide 17: Lease expiries next three years
Lease expiries next three years For personal use only > Five year options recently exercised for Fountain Gate (VIC) and Port Melbourne (VIC) Lease Rent Property Options Comments expiry ($’000pa) Vermont South Aug 2020 4 x 5 yrs 2,297 Notification required by Jun 2020 Northland Aug 2020 2 x 5 yrs 2,
Slide 18: Coburg upgrade
Coburg upgrade For personal use only > Upgrade cost of $2.5 million at a funding rate of 5.5 per cent > Upgrade increases the total retail area by 918 square metres incorporating an expansion and full enclosure of the timber trade sales area > Anticipated completion late 2020 > On completion of the
Slide 19: Hoxton Park repositioning
Hoxton Park repositioning For personal use only > Bunnings surrendered its lease in June 2019 ($2.15 million surrender fee to BWP) > Project completed at a total cost of $13.0 million > Property is 92 per cent leased mainly to national tenants and expect remaining two tenancies to be leased by mid-2
Slide 20: Alternative use properties
Alternative use For personal use only properties Hawthorn, VIC 20 ALTERNATIVE USE PROPERTIES | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 21: Other stores being repositioned
Other stores being repositioned For personal use only Property Lease expiry1 Progress Development complete with Amart Furniture and Snooze open and trading. Mandurah Expired Negotiations with other LFR tenants progressing for the remaining lettable area of 2,560sqm Concept and feasibility finalised
Slide 22: Divestments
Divestments For personal use only Property Lease Sale price Progress expiry1 ($m) Under conditional option agreement to sell to unrelated third Underwood Expired Undisclosed party, progressing toward satisfaction of conditions Under conditional option agreement to sell to unrelated third Belmont Nor
Slide 23: Capital management
Capital For personal use only management Gladstone, QLD 23 CAPITAL MANAGEMENT | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 24: Debt facilities
Debt facilities For personal use only > Average borrowings for the half-year $439.0m (down 4.7% on prior corresponding period) – 3.53% p.a. weighted average cost of debt after hedging (2018: 4.31% per annum) – Borrowing costs for the half-year $7.8m (down 21.9% on prior corresponding period) > Bank
Slide 25: Debt duration
Debt duration For personal use only Debt maturity profile as at 31 December 2019 300 Volume (A$M) 65.9 200 69.1 100 110.0 42.4 100.0 100.0 67.6 0 FY FY FY FY FY FY FY 20 21 22 23 24 25 26 Bonds Drawn bank facilities Undrawn bank facilities 25 CAPITAL MANAGEMENT | HALF-YEAR RESULTS TO 31 DECEMBER 201
Slide 26: Interest rate hedging
Interest rate hedging For personal use only Hedge book profile by Dec 2019 Jun 2020 Dec 2020 Jun 2021 Dec 2021 Jun 2022 half-year ending Active swaps ($m) 98 85 85 70 40 - Swap rates (%) Maximum 4.92 4.12 4.12 2.60 2.60 - Minimum 2.39 2.39 2.39 2.39 2.60 - Weighted average (%)1 3.07 2.79 2.79 2.51 2
Slide 27: Outlook
Outlook For personal use only Nunawading, VIC 27 OUTLOOK | HALF-YEAR RESULTS TO 31 DECEMBER 2019
Slide 28: Outlook
Outlook For personal use only Macro economic environment > Demand for Bunnings Warehouse properties should remain stable, subject to any significant risk events interrupting capital flows into the Australian property sector > The Trust is well positioned in the event of any change in the macro econo
Slide 29: 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 29 FURTHER INFORMATION | HALF YEAR RESULTS TO 31 DECEMBER 2019