Slide 1: Full-year results to 30 June 2015
For personal use only Full-year results to 30 June 2015 August 2015
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 > 2015 full-year highlights Managing Director BWP Management Limited > Results > Portfolio Andrew Ross Portfolio Manager > Capital management BWP Management Limited > Strategic agenda David Hawkins > Outlook Finance Manager BWP Management L
Slide 4: 2015 Full-year highlights
2015 Full-year highlights For personal use only $144.9m $101.6m 15.84 cpu $2.24 30.0% Total income 13.7% Dist. profit 9.5% Distribution 7.7% NTA 8.2% Total return Portfolio performance Portfolio management Capital management 2.6% 1 3 like-for-like rental growth new store acquisition bank facilities
Slide 5: Results – performance vs pcp
Results – performance vs pcp1 For personal use only FY2015 Previous corresponding period Total income $144.9m $127.4m Management expense ratio 0.65% 0.64% Other expenses $6.4m $6.0m Distributable profit (excluding revaluations) $101.6m $92.8m Number of units on issue 642.4m 634.4m Full-year distribu
Slide 6: Results - performance monthly
Results - performance 6 monthly For personal use only 6 months 6 months 6 months to Jun 15 to Dec 14 to Jun 14 Total income $73.7m $71.2m $67.7m Distributable profit $52.5m $49.1m $49.9m1 Property revaluation gains $40.3m $68.2m $33.3m Net profit including property revaluations $92.8m $117.3m $82.4m
Slide 7: Australind acquisition & development
Portfolio – Australind acquisition & development For personal use only > Bunnings Warehouse - Australind, WA ($18.3m) – Strongly growing part of regional Western Australia – Land acquired in June 2015 for $8.3m (plus acquisition costs of approximately $0.5 million) – Development completed June 2015
Slide 8: Developments completed in FY2015
Portfolio – developments completed in FY2015 For personal use only Minchinbury Manly West West Ipswich Brendale Maribyrnong upgrade Development completion Sep 2014 Sep 2014 Dec 2014 Feb 2015 Apr 2015 Land acquisition costs $7.2m $13.1m $8.1m $7.6m $4.3m Development cost $21.3m $17.9m $19.2m $32.0m $
Slide 9: FY2015 like-for-like rental growth
Portfolio – FY2015 like-for-like rental growth For personal use only Proportion of rental income Average increase 7% Market 1.5%1 2.6% 34% Fixed 3.0% like-for-like rental growth 59% CPI 2.5% Like-for-like rental growth2 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Rental growth 3.0% 4.4% 2.8% 7
Slide 10: FY2015 market rent review outcomes
Portfolio – FY2015 market rent review outcomes 17 Bunnings reviews resulted in an 8.0% increase, 12 from FY2014, and 5 due during the period For personal use only Reviewed rent Property location Customer Passing rent ($pa) Variance (%) Effective date ($pa) Altona, VIC1 Bunnings 1,089,650 1,122,339 3
Slide 11: FY2016 rent reviews
Portfolio – FY2016 rent reviews > 5 Bunnings Warehouse market rent reviews due in FY20151 currently being negotiated or For personal use only at determination Rent review type FY16 (all leases) % of Market rent reviews (BWH) First- Second- rental Morley, WA half half income2 Vermont South, VIC CPI 3
Slide 12: FY2015 revaluation
Portfolio – FY2015 revaluation > June 2015 weighted average capitalisation rate 7.33% (Dec 2014: 7.41%) For personal use only – Stand alone Bunnings Warehouses weighted average cap rate of 7.25% • 9 independent valuations (10% of BWP portfolio value), average cap rate 7.46%1 • 63 internal valuations
Slide 13: Future rent reviews and revaluations
Portfolio – future rent reviews and revaluations For personal use only Future market rent reviews for Bunnings Warehouses (“BWH”) and revaluations FY2016 FY2017 FY2018 FY2019 FY2020 BWH market reviews 6 7 8 15 11 % of total1 6% 8% 8% 16% 12% Independent valuations 26 29 25 29 29 % of total2 34% 35%
Slide 14: Bunnings lease term expiries next 3yrs
Portfolio – Bunnings lease term expiries next 3yrs For personal use only Property Lease term Options Annual rent Comments expiry ($’000) Mt Gravatt Dec 2015 5 x 5 yrs 1,163 Notification received to exercise next 5 year option Belmont North Mar 2016 2 x 5 yrs 955 Notification required by Dec 2015 Gla
Slide 15: Weighted average lease expiry profile
Portfolio – weighted average lease expiry profile For personal use only 25% 20% 16 % of Rental Income 15% 9 10% 11 10 7 7 5 5% 6 3 2 2 2 0% FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Industrial Showrooms Bunnings > 16 Bunnings Warehouse leases WALE >10 years, combined property
Slide 16: Re-positioning
Portfolio – re-positioning For personal use only The sale of six non–core properties completed in the year ending 30 June 2015 Property Tenancy Sale price ($m) Settlement date Regency Park Ex-Blackwoods 3.9 Jul 14 Hemmant Ex-Bunnings 21.3 Sep 14 Sandown Ex-Bunnings 8.6 Oct 14 Sunshine Bunnings 13.0
Slide 17: Bunnings Warehouse replacements
Portfolio – Bunnings Warehouse replacements For personal use only Lease Duration of Property Outcome achieved expiry occupancy1 Altona Sep 2018 18yrs Option agreement expiring in July 2016 to sell property to Folkestone Limited Mentone Sep 2018 20yrs Bunnings has moved to a new site, Trust owned sto
Slide 18: Bunnings Warehouse replacements: Epping
Portfolio – Bunnings Warehouse replacements For personal use only Epping > Located near Epping Train Station, in a large format retail precinct, adjacent to the Epping Plaza Shopping Centre > Mixed use zoning Melbourne CBD Bunnings Epping Epping large Epping Plaza format retail Shopping Centre preci
Slide 19: Capital management – debt facilities
Capital management – debt facilities > Average borrowings FY2016 $462.7m (up 39.2% on previous year) For personal use only - 5.5% weighted average cost of debt after hedging (2014: 6.1%) - Borrowing costs for the full-year $25.8m (up 23.5% on previous year) > Bank facilities repriced and extended du
Slide 20: Capital management – interest rate hedging
Capital management – interest rate hedging For personal use only Hedge book profile by Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 18 half-year ending: Active swaps ($ m) 180 180 175 135 110 28 Swap rates (%) Maximum 5.70 5.70 5.70 5.70 5.70 5.05 Minimum 3.10 3.10 3.10 3.10 3.10 4.25 Weighted average1 5.
Slide 21: Strategic agenda
For personal use only Strategic agenda 21
Slide 22: Strategic agenda - major customers
Strategic agenda - major customers For personal use only Customer Stores Percentage Comments of total BWP rent 9.2% store-on-store growth for 9mths to 31 March 2015, adding Bunnings (Wesfarmers Limited) 80 92.8% 15 – 18 stores pa over next two years, 10 to 14 stores pa therafter BCF 4 0.7% Bayswater
Slide 23: Strategic agenda - distributions per unit (DPU)
Strategic agenda - distributions per unit (DPU) For personal use only (cents) 16 15.84 14.67 14.71 8.17 14.14 14 12.98 13.27 7.75 12.61 7.14 6.72 12.08 11.98 6.87 12 6.56 11.57 6.39 5.98 5.80 4.87 10 8 7.67 6 6.70 7.00 6.83 6.42 6.55 6.63 6.22 6.10 6.09 4 2 0 2,3 4 5 FY06 FY07 FY08 FY091 FY10 FY11 F
Slide 24: Strategic agenda - total return profile
Strategic agenda - total return profile For personal use only 24
Slide 25: Strategic agenda – long term return focus
Strategic agenda – long term return focus > Portfolio dynamics For personal use only – Average portfolio ROIC last 10 years +10%pa – 43 Bunnings Warehouse stores initial lease term – 23 Bunnings Warehouse stores have exercised one option – 14 Bunnings Warehouse stores have exercised more than one op
Slide 26: Strategic agenda - priorities
Strategic agenda - priorities For personal use only > Portfolio – Finalise Bunnings Warehouse replacement store outcomes ahead of lease expiry – Reinvestment in existing properties to support Bunnings’ evolving business model – Ongoing review of portfolio for redeployment or divestment opportunities
Slide 27: Outlook
Outlook > Macro economic environment: For personal use only – Demand for Bunnings Warehouse properties expected to remain strong, while interest rates remain low – Further cap rate compression will be a function of the duration of the current interest rate cycle > Rental growth: – Increased rental i
Slide 28: 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 28
Slide 29: 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 Industrial Showrooms Expiries Income ($) (% of Total) (%) (%) (%) 1 30-Jun-16 7 3,384,344 2.3% 1.4% 0.0% 0.9% 2 30-Jun-17 6 4,268,131 2.9% 2.1% 0.0% 0.8% 3 30-Jun-18 8