Bwp Trust · ASX:BWP
Bwp Trust — Bunnings Warehouse Property Trust — FY2008 Earnings Presentation
26 slides from Bwp Trust's earnings presentation, Sep 9, 2008
Slide 1: Results presentation cover letter to ASX
ARSN 088 581 097 For personal use only 9 September 2008 The Manager Company Announcements Office Australian Securities Exchange Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir RESULTS PRESENTATION FOR THE FULL YEAR TO 30 JUNE 2008 Attached is a copy of a presentation to be presented to in
Slide 2: Annual Results 2008
BEE eee ANNUAL RESULTS 2008 yaugust: : eee _ Bunnings Warehouse Property Trust www.bwoptrust.com.au
Slide 3: Presentation outline
For personal use only Presentation outline • Overview Grant Gernhoefer General Manager • Results Bunnings Property Management Limited • Key growth areas • Portfolio • Capital management Andrew Ross Portfolio Manager • Structure Bunnings Property Management Limited • Outlook 1
Slide 4: Overview
For personal use only Overview Steady earnings results and growth through acquisitions and upgrades in difficult market conditions Revaluation of properties increased cap rates from 6.58% to 7.08% Defensive characteristics - well placed to face further volatile market conditions Underlying strengths
Slide 5: Results - performance
For personal use only Results - performance Revenue $65.9 million 10.3% on pcp Net profit $ 0.7 million $207.0 million pcp Distributable profit (excludes revaluations) $40.0 million 2.3% on pcp Full year distribution 13.27 cpu 2.2% on pcp Total assets $979.9 million 1.7% on pcp Borrowings $308.5 mil
Slide 6: Results - distributions
For personal use only Results - distributions 14 12 10 6.56 6.72 cents per unit 6.39 6.17 5.87 8 5.35 4.86 4.97 4.68 6 4.70 4 5.79 6.22 6.42 6.55 4.80 5.15 5.51 4.70 4.50 2 2.50 0 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 1 2 1 Trust commenced trading in Sep 98 2 end of concessional manageme
Slide 7: Key growth areas
For personal use only 5 Key growth areas 1. Acquire new and established Bunnings Warehouses 2. Improve existing properties 3. Grow rental income from existing properties 4. Acquire or develop bulky goods properties 5. Acquire other properties that meet the Trust’s investment criteria 5
Slide 8: Key growth areas: Acquire new and established Bunnings Warehouses
For personal use only 5 Key growth areas 1. Acquire new and established Bunnings Warehouses Villawood, NSW ($18.4m + $0.9m acq. costs) – May 08 • 26km west of Sydney CBD • annual rent $1,332,500 • 2.6ha site; 10,250 m2 total retail area • annual 3% escalation • 10 years + 5 x 5 year options • market
Slide 9: Key growth areas: Improve existing properties
For personal use only 5 Key growth areas 2. Improve existing properties Morayfield, QLD ($3.4m) • additional 1,926 m2 retail area and 56 car bays • incremental rent $0.27m pa represents 8.0% return on capital outlay • completed Feb 08 Morayfield, QLD 7
Slide 10: Improve existing properties (continued)
For personal use only 5 Key growth areas 2. Improve existing properties (continued) Mile End, SA ($2.8m) • additional 1,469m2 retail area • incremental rent $0.22m per annum Mile End, SA • 8.0% return on capital outlay • completed Apr 08 Mechanical ventilation ($1.5m) • installed in 6 Bunnings Wareh
Slide 11: Improve existing properties: Hawthorn, VIC
For personal use only 5 Key growth areas 2. Improve existing properties (continued) Hawthorn, VIC (acquired in Apr 07) • new multi-level format 7,462m2 Bunnings Warehouse • 7 km east of CBD Hawthorn, VIC • 0.84ha site • Trust acquired site for $19.0m + $1.2m acq. costs with development agreement and
Slide 12: Grow rental income from existing properties
For personal use only 5 Key growth areas 3. Grow rental income from existing properties Determined/ Market Rent Passing negotiated rent Reviews rent ($’000) ($’000) Uplift % Effective date Artarmon, NSW 1,313 1,396 6.3 9 Feb 08 Belrose, NSW 1,618 1,764 9.1 9 Feb 08 Cairns, QLD 1,107 1,107 - 9 Feb 08
Slide 13: Acquire or develop bulky goods properties
For personal use only 5 Key growth areas 4. Acquire or develop bulky goods properties Geraldton Showrooms, WA ($2.9m + $0.1m acq. costs) Geraldton Showrooms, WA • 1.2 ha site • adjoins the Trust’s Bunnings Warehouse • $0.5m conversion costs • gross lettable area 1,511m2 • 1,162m2 leased to BCF (Supe
Slide 14: Acquire other properties that meet investment criteria
For personal use only 5 Key growth areas 5. Acquire other properties that meet Trust’s investment criteria Blackburn, VIC ($19.0m + $1.1m acq. costs) Blackburn, VIC • 18 km east of Melbourne CBD; near Nunawading “Golden Mile” bulky goods precinct • 4.1 ha site; 20,464m2 office/warehouse facility • f
Slide 15: Portfolio properties - good geographic spread
For personal use only Portfolio 60 properties – good geographic spread ) 51 Bunnings Warehouses ) 2 Bunnings distribution centres . 2 Bunnings Warehouse development sites ) 4 Industrial properties ) 2 Bulky goods showrooms* ) 8 Jun 08 ) 10 )2 VIC *21 )1 )2 NSW/ACT 14 )1 )1 )1 QLD 10 ) 13 WA 12 ) 18
Slide 16: Portfolio: lease expiry and lease features
For personal use only Portfolio 6.9 year weighted average lease expiry (by rental income) Typical Bunnings Warehouse lease features • 15 years (plus 2 x 5 year options) • 5 yearly market rent reviews (majority uncapped) • annual CPI escalation • Wesfarmers covenant 20 16 2 Number of leases 12 3 1 No
Slide 17: Portfolio: Revaluations
For personal use only Portfolio Revaluations • Entire portfolio revalued every 6 months • Independent valuations on a 3 year cycle for each property • Balance of portfolio – directors’ valuation using recognised valuation methodology • Directors’ valuations methodology reviewed by an independent val
Slide 18: Portfolio: Revaluations (continued)
For personal use only Portfolio Revaluations (continued) Independent valuations 31 Dec 07 30 June 08 31 Dec 08 30 Jun 09 VIC 3 1 4 1 WA 2 1 2 - QLD - 3 3 3 NSW/ACT - 2 4 1 SA - 2 - - Proportion of 1 2 2 2 portfolio value 11% 13% 27% 9% 1 percentage based on fair value as at 31 December 2007 2 percen
Slide 19: Portfolio: Market rent reviews
For personal use only Portfolio Market rent reviews Typical Bunnings Warehouse market rent review clause • assumes free and open market with vacant possession • has regard to the rent paid by Bunnings at other Bunnings Warehouses • has regard to the rental value of other properties of a similar size
Slide 20: Portfolio market rent reviews in FY09
For personal use only Portfolio 21 market rent reviews in FY09 Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY09 FY09 FY09 FY09 Key Rocklea VIC Altona Burleigh Heads WA Broadmeadows Underwood QLD Mentone Southport NSW/ACT Sandown Hemmant (DC) Scoresby Port Macquarie Sunshine Tuggeranong Balcatta Minchinb
Slide 21: Future Bunnings Warehouse revaluations and market rent reviews
For personal use only Portfolio Future Bunnings Warehouse revaluations and market rent reviews FY09 FY10 FY11 FY12 FY13 Rent reviews 21 1 12 4 7 7 Revaluations 18 22 19 18 22 1 two completed - Altona with 3% uplift and Rocklea at existing rental 19
Slide 22: Capital management: Debt facilities
For personal use only Capital management Debt facilities As at 30 June 08 Limit ($m) Drawn ($m) Review Expiry ANZ 100 100 Sep 20081 Jul 2009 NAB 100 100 Oct 2008 2 Evergreen CBA 100 60 Oct 2008 3 Jan 2010 3 WBC 80 50 July 2009 4 July 2010 4 380 310 1 ANZ - review in Sep 2008 for pricing to apply fro
Slide 23: Capital management: Gearing at 31.5%
For personal use only Capital management Gearing at 31.5% 50% 40% Preferred range 30% 20% 10% 0% 01 01 02 03 04 05 06 07 08 un ec un un un un un un un J D J J J J J J J 21
Slide 24: Capital management: Interest rate management
For personal use only Capital management Interest rate management • $240.0 m hedged (77 %) • 6.39% weighted average rate for all debt across 2008 after hedging and including margins (2007: 6.06%) • 2.4 years weighted average maturity, including delayed starts (2007: 3.5 years) Hedge book Financial y
Slide 25: Structure
For personal use only Structure Manager: Bunnings Property Management Limited Subsidiary of Wesfarmers Limited but…independent board • John Austin (Chairman); Leighton Properties (Chairman), MREEF, Ringmer Pacific, ex Jones Lang LaSalle • Peter Mansell; WAN (Chairman), ThinkSmart (Chairman), OZ Mine
Slide 26: Outlook
For personal use only Outlook The Trust is well placed to weather current market volatility • Low gearing and headroom under debt facilities allow selective acquisitions • Hedged for short term – look for opportunities to extend hedging duration • Focus on acquiring Bunnings Warehouses • Improve exi
Bunnings Warehouse Property Trust — FY2008 Earnings Presentation on 6ix