Slide 1: 2024 Full-year results
2024 Full-year results 14 August 2024
Slide 2: Important notice
Important notice The information provided in this presentation should be considered together with the financial statements for the period & previous periods, ASX announcements & other information available on BWP’s website. This presentation has been prepared by BWP Management Limited as the respons
Slide 3: Acknowledgement of Country
Acknowledgement of Country We acknowledge the Traditional Owners of Country throughout Australia & their continuing connection to lands & waterways upon which we depend. We pay our respects to their Elders past, present & emerging. 3 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 4: Presentation outline
Presentation outline Presenters Item Slide Mark Scatena, Managing Director 2023/24 Portfolio highlights 5 Andrew Ross, Head of Property Financial performance 8 David Hawkins, Head of Finance Strategic framework 11 Portfolio optimisation 13 Profitable growth 25 Portfolio renewal 32 Capital management
Slide 5: 2023/24 Portfolio highlights
2023/24 Portfolio highlights Maroochydore, QLD 5 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 6: FY24 performance highlights
FY24 performance highlights Portfolio momentum supported by increased growth & renewal activity > Strong like-for-like rental growth > Acquisition of Newmark Property > Divestments completed for three (4.2%) REIT ($540m) non-core assets (realised IRR of > Five Bunnings market rent > Two properties a
Slide 7: FY24 key portfolio metrics
FY24 key portfolio metrics Balance sheet strength leveraged whilst maintaining high quality & high returning portfolio Like-for-like rental growth Market rent reviews Total income Full-year ordinary distribution 1 2 4.2% 6 completed $174.5m 18.29c 4.9% previous year Rent up 4.4% ↑10.3% on previous y
Slide 8: Financial performance
Financial performance Melton, VIC 8 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 9: Financial performance
Financial performance FULL-YEAR ENDED 30 JUNE 2024 30 JUNE 2023 INCOME & EXPENSES Total income $m 174.5 158.2 Total expenses $m (55.2) (44.6) Profit before fair value movements $m 119.3 113.6 Amounts released from undistributed income reserve $m 5.21 3.9 Distributable amount $m 124.1 117.5 Managemen
Slide 10: Financial performance (continued)
Financial performance (continued) FULL-YEAR ENDED 30 JUNE 2024 30 JUNE 2023 INVESTMENT & CASH GENERATION Capital expenditure $m 41.9 14.3 Acquisitions of investment properties $m 572.0 - Free cash flow $m 105.6 109.6 CAPITAL STRUCTURE Total assets $m 3,586.3 2,960.2 Borrowings $m 771.6 468.5 Unithol
Slide 11: Strategic framework
Strategic framework Warragul, VIC 11 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 12: Strategic framework & investment proposition
Strategic framework & investment proposition > Consistent objective > Key focus areas align to strategic pillars – Portfolio optimisation – optimising & leveraging the existing network while managing asset repurposing requirements – Profitable growth – expanding the core portfolio & assessing adjace
Slide 13: Portfolio optimisation
Portfolio optimisation Hervey Bay, QLD 13 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 14: Contracted rent escalation & balanced lease structure
Portfolio optimisation Contracted rent escalation & balanced lease structure (fixed & CPI) Average increase FY24 FY25 (expected) 0.2% Market/ other1 8.7%1 Rental income Rental income 12.0% composition composition 48.6% 4.2% ~55.0% Fixed 3.0% like-for-like 52.8% rental growth 51.2% ~35.0% CPI 5.3% 35
Slide 15: Active management of Bunnings market rent review process
Portfolio optimisation Continued active management of Bunnings market rent review process FY24 PASSING REVIEWED EFFFECTIVE PROPERTY LOCATION VARIANCE > Five Bunnings market rent reviews RENT ($PA) RENT ($PA) DATE finalised Craigieburn, VIC1,2 1,826,683 1,945,000 6.5 6-May-22 > Variance to passing re
Slide 16: Covenant mix strength driven by Wesfarmers Group
Portfolio optimisation Continued covenant mix strength driven by Wesfarmers Group & national retailers > Wesfarmers Group covenant coverage COVENANT % OF TOTAL RENT – 82.3% (83.8% at 31 December 2023) Wesfarmers Group 82.3 > National retailer coverage – 97.9% of rental income with national Commonwea
Slide 17: Limited transactions recently completed
Portfolio optimisation Limited transactions recently completed, excluding NPR portfolio acquisition > Low transaction volume over last Capitalisation rate two years reflecting divergent buyer & seller pricing expectations 7.00% > NPR portfolio acquisition 6.50% completed at implied cap rate above tr
Slide 18: Portfolio capitalisation rate expansion of 16 basis points
Portfolio optimisation Portfolio capitalisation rate expansion of 16 basis points in FY24 > June 2024 weighted average capitalisation (‘cap’) Revaluations by State as at 30 June 2024 rate of 5.54% (December 2023: 5.53% & June 2023 5.38%) PROPERTIES RENTAL CAP RATE VALUE STATE (NO.) ($M/ANNUM)1 (%) (
Slide 19: Independent valuation movement
Portfolio optimisation Independent valuation movement reflects Bunnings site expansion activity & rental income growth Independent valuation summary (six months to 30 June 2024) > Cohort of eight independent valuations completed in 2H FY24 Valuation (m) Cap rate (9.2% of BWP portfolio value) with av
Slide 20: Core portfolio improvement
Portfolio optimisation Core portfolio1 improvement driven by effective asset repurposing & renewal & growth activity Core portfolio contribution to portfolio Average lettable area (sqm) Metropolitan location (# of total) (% of sites) 100 14,140 14,123 100 6 14,120 80 9 14,100 80 14,080 60 60 14,060
Slide 21: Near term expiries and option exercising
Portfolio optimisation Near term expiries reflect historic tranche portfolio acquisitions; option exercising supported by portfolio quality & option history FY24 Weighted average lease expiry profile2 > Bunnings exercised all 5 options1 30% > Options comprised 1 x 1st option, 1 x 2nd option & 6 x 3r
Slide 22: Term certain & lease option management
Portfolio optimisation Term certain & lease option management supported by improved portfolio quality In year expiries (number of Bunnings leases) Recent history 25 > Leases expiring in FY22, FY23 & FY24 – 14 of 18 options exercised 20 Lease mechanics Number of lease 15 > FY25 lease expiries – Optio
Slide 23: Evolving capability in repurposing
Portfolio optimisation Evolving capability in repurposing across feasibility assessment, planning approval, leasing & construction Management of development process > Concept to commissioning requires significant time (> 2.5 years) > Construction costs remain elevated, albeit cost inflation moderati
Slide 24: Hervey Bay completion affords confidence for future repurposing
Portfolio optimisation Hervey Bay completion affords confidence for future repurposing activity Bunnings Warehouse During construction At completion 24 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 25: Profitable growth
Profitable growth Bunnings Eastgardens, NSW 25 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 26: Successful completion of Newmark Property REIT acquisition
Profitable growth Successful completion of Newmark Property REIT acquisition 27 Mar 2024 1 Apr 2024 21 Jun 2024 Responsible entity Active property Compulsory Due diligence management acquisition acquisition commenced commenced (BWPM) Due diligence & announcement Path to delisting & compulsory acquis
Slide 27: NPR acquisition affords scale and diversification
Profitable growth NPR acquisition affords scale, complementary portfolio, growth platform, geographic diversification & increased WALE Larger $3.5b portfolio Highly complementary Platform for income & Enhanced Leveraging & with increased scale & portfolios with further capital growth diversification
Slide 28: Logical, adjacent acquisitions with initial yield of 6.8%
Profitable growth Logical, adjacent acquisitions afford expansion potential with initial yield of 6.8% Southport Showrooms, QLD Broadmeadows Homemaker Centre, VIC > September 2023 purchase for $10.0m > September 2023 purchase for $20.0m (excluding acquisition costs) (excluding acquisition costs) > G
Slide 29: Bunnings upgrades completed at Lismore & Coburg
Profitable growth Bunnings upgrades completed at Lismore & Coburg, enabling key tenant format & range expansion Lismore, NSW Coburg, VIC > Upgrade cost of $11.7m at funding rate of 4.0% > Upgrade cost of $2.9m at funding rate of 4.0% – Land acquisition $1.5m (acquired in October > Upgrade increases
Slide 30: Bunnings upgrades agreed at Dubbo & Scoresby
Profitable growth Bunnings upgrades agreed at Dubbo & Scoresby for FY25 completion Dubbo, NSW Scoresby, VIC > Upgrade cost of ~$14.0m at funding rate of 4.0% > New 10-year lease on completion of works with > New 10-year lease on completion of works with six, three, five-year options five-year option
Slide 31: Reduced alternate use activity; Hervey Bay template
Profitable growth Reduced alternate use activity reflecting improved portfolio quality; Hervey Bay provides template for near term repurposing activity PROPERTY LEASE EXPIRY COMMENTS Port Kennedy > Expired > Divestment process advanced (expected completion 1H FY25) Noarlunga > Sep 2024 > Development
Slide 32: Portfolio renewal
Portfolio renewal Bunnings Preston, VIC 32 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 33: Active divestment activity with proceeds recycled
Portfolio renewal Active divestment activity (to highest & best use) with proceeds recycled into growth activity Wollongong, NSW Belmont North, NSW Albany, WA OUTCOME OUTCOME OUTCOME Purchase date Feb 2003 Purchase date Dec 2006 Purchase date Nov 1999 Total invested capital $14.1m Total invested cap
Slide 34: Capital management
Capital management Warragul, VIC 34 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 35: Diversified debt
Diversified debt Debt sources diversified including introduction of new lenders > Average borrowings for the year $587.5m LIMIT DRAWN AS AT 30 JUNE 2024 EXPIRY (up 24.2% on prior year, largely due to NPR debt ($M) ($M) assumed as part of the takeover) Sumitomo Mitsui Banking Corporation (“SMBC”) 100
Slide 36: Debt facilities & duration
Debt facilities & duration NPR debt refinanced & tenor extended > Significant refinancing activity in FY24 Debt maturity profile as at 30 June 2024 (including refinancing of acquired NPR debt): – new $75m seven-year institutional term loan, maturing in November 2030, with 400.0 CBA appointed as payi
Slide 37: Outlook
Outlook Port Melbourne, VIC 37 BW P 2 0 2 4 F U L L - YEAR RE S U L TS
Slide 38: Outlook: FY25 focus areas
Outlook Continued focus on BWP’s objective of providing unitholders a secure & growing income stream & long-term capital growth FY25 focus areas > Continued progress in repurposing vacated properties, > Recycling proceeds from divestments of non-core filling vacancies, completing store upgrades, ext
Slide 39: Outlook (continued)
Outlook (continued) Continued focus on BWP’s objective of providing unitholders a secure & growing income stream & long-term capital growth Operating market & environment Income generation > Trust remains well positioned with rental income > FY25 rent reviews comprising largely the Wesfarmers Group
Slide 40: Q&A Thank you
Q&A Thank you Further Information Responsible entity: BWP Management Limited Tel: +61 8 9327 4356 Email: investorrelations@bwptrust.com.au
Slide 41: Appendix A Core Portfolio Lease Expiries
Appendix A Core Portfolio Lease Expiries
Slide 42: Core Portfolio: Bunnings lease expiries (FY25 & FY26)
Core Portfolio Bunnings lease expiries (FY25 & FY26) PROPERTY LEASE EXPIRY OPTIONS (YEARS) RENT ($’000 PA) COMMENTS Fyshwick Dec 2024 1 x 5 (5) 1,505 Fourth option, notification received Aug 2024 Nunawading Feb 2025 1 x 10 (10) 2,931 Third option, notification required by Nov 2024 Mile End Mar 2025
Slide 43: Core Portfolio: Bunnings lease expiries (FY25 & FY26)
Core Portfolio Bunnings lease expiries (FY25 & FY26) PROPERTY LEASE EXPIRY OPTIONS (YEARS) RENT ($’000 PA) COMMENTS Townsville North Dec 2025 5 x 6 (30) 2,076 First option, notification required by Dec 2024 Springvale Dec 2025 5 x 6 (30) 2,486 First option, notification required by Dec 2024 Mt Grava
Slide 44: Core Portfolio: Bunnings lease expiries (FY27)
Core Portfolio Bunnings lease expiries (FY27) PROPERTY LEASE EXPIRY OPTIONS (YEARS) RENT ($’000 PA) COMMENTS West Ipswich Sep 2026 5 x 6 (30) 2,968 First option, notification required by Sep 2025 Manly West Sep 2026 5 x 6 (30) 2,675 First option, notification required by Sep 2025 Harrisdale Oct 2026