Slide 1: Full-year results to 30 June 2016
lan bwp TRUST Full-year results to 30 June 2016 August 2016
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 > 2016 full-year highlights Managing Director BWP Management Limited > Results Andrew Ross > Portfolio Portfolio Manager BWP Management Limited > Capital management David Hawkins > Strategic agenda Finance Manager BWP Management Limited > O
Slide 4: 2016 Full Year Highlights
For personal use only 2016 FULL YEAR HIGHLIGHTS
Slide 5: 2016 Full-year highlights
2016 Full-year highlights For personal use only $150.2m $107.9m 16.79 cpu $2.56 13.5% pa Total income 3.7% Dist. profit 6.2% Distribution 6.0% NTA 14.3% 10 yr total return Portfolio performance Portfolio management Capital management 2.3% 14 4.9% like-for-like rental growth MRRs finalised cost of de
Slide 6: Results
lan bwp TRUST 2\ RESULTS
Slide 7: Results – financial performance vs pcp
Results – financial performance vs pcp1 For personal use only FY2016 Previous corresponding period Total income $150.2m $144.9m Management expense ratio 0.64% 0.65% Other expenses $6.2m $6.4m Distributable profit (excluding revaluations) $107.9m $101.6m Number of units on issue 642.4m 642.4m Full-ye
Slide 8: Results - financial performance six monthly
Results - financial performance 6 monthly For personal use only 6 months 6 months 6 months to Jun 16 to Dec 15 to Jun 15 Total income $75.5m $74.7m $73.7m Distributable profit $54.6m $53.3m $52.5m Property revaluation gains $29.1m $173.5m $40.3m Net profit including property revaluations $83.7m $226
Slide 9: Results - five year financial summary
Results - 5 year financial summary 30 June 2016 2015 2014 2013 2012 For personal use only Revenue $150.2m $144.9m $127.4m $109.2m $101.2m Distributable profit $107.9m $101.6m $92.8m $75.8m $76.7m1 Total assets $2,200.5m $2,018.0m $1,837.4m $1,398.7m $1,335.2m Borrowings $472.3m $485.4m $448.3m $296.
Slide 10: Portfolio
lan bwp TRUST PORTFOLIO
Slide 11: Developments completed in FY2016
Portfolio – developments completed in FY2016 Lismore Rockingham For personal use only Development completion Aug 2015 Oct 2015 Development cost $4.6m $4.6m Fully enclosed covered area 8,105m2 9,308m2 Commencing rent (per annum) $1.26m $2.02m Lease term 12 years 12 years Options 4 x 5-years 4 x 6-yea
Slide 12: FY2017 capital commitments so far
Portfolio – FY2017 capital commitments so far… For personal use only Villawood Estimated development completion Mid-2017 Development cost $4.0 million Fully enclosed covered area 10,418m2 Commencing rent (per annum) $1.83m Lease term 7 years Options 5 x 5-years Annual rent reviews 3% fixed Market re
Slide 13: FY2016 like-for-like rental growth
Portfolio – FY2016 like-for-like rental growth For personal use only Proportion of rental income1 Average increase 6% Market 4.3%2 2.3% 37% Fixed 3.1% like-for-like rental growth 57% CPI 1.6% Like-for-like rental growth FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Rental growth3 4.4% 2.8% 7.1%
Slide 14: FY2016 market rent review outcomes
Portfolio – FY2016 market rent review outcomes 10 Bunnings reviews resulted in a 5.8% increase, 5 from FY2015, and 5 due during the period For personal use only Reviewed rent1 Property location Customer Passing rent ($pa) Variance Effective date ($pa) Mornington, VIC2 Bunnings 1,607,814 1,650,000 2.
Slide 15: FY2017 rent reviews
Portfolio – FY2017 rent reviews > 1 Bunnings Warehouse market rent review due in FY20161 currently at determination For personal use only Rent review type FY17 (all leases) % of Market rent reviews (BWH) First- Second- rental Geraldton, WA half half income2 Midland, WA CPI 35 19 53% Mindarie, WA Fix
Slide 16: Capitalisation rate trends
Portfolio – capitalisation rate trends For personal use only > Yields remain low and continue to tighten, largely driven by the private investor market > Compression has been particularly evident in the hardware and home improvement sector with the most recent Bunnings Warehouse transactions yieldin
Slide 17: Independent valuations at June 2016
Portfolio – independent valuations at June 2016 Dec-15 Jun-16 Valuation Jun-16 For personal use only Dec-15 Jun-16 Cap Rate Property State Valuation Valuation Movement Term Certain Cap Rate Cap Rate Movement (A$m) (A$m) (A$m) (years) Rydalmere NSW 6.00% 48.2 5.75% 51.0 -0.25% 2.8 9.7 Thornleigh NSW
Slide 18: FY2016 revaluation
Portfolio – FY2016 revaluation > June 2016 weighted average capitalisation rate 6.77% (Dec 2015: 6.81%) For personal use only – Stand alone Bunnings Warehouses weighted average cap rate of 6.67% • 15 independent valuations (20% of BWP portfolio value), average cap rate 6.45% • 56 internal valuations
Slide 19: Lease expiries next years
Portfolio – lease expiries next 3 years Property Lease expiry Options Rent ($’000pa) Comments For personal use only Gladstone Feb 2017 4 x 5 yrs 1,138 Notification required by Nov 2016 Oakleigh South Mar 2017 2 x 5 yrs 1,963 Notification required by Dec 2016 Dandenong Nov 2017 2 x 5 yrs 1,595 Notifi
Slide 20: Weighted average lease expiry profile
Portfolio – weighted average lease expiry profile 25% For personal use only 20% 17 15% % of Rental Income 9 10% 10 7 9 7 5 5% 6 3 2 2 2 0% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Showrooms Bunnings > 40 Bunnings Warehouse stores in initial lease term > 22 Bunnings Warehous
Slide 21: Re-positioning
Portfolio – re-positioning For personal use only Property Tenancy Sale price ($m) Settlement date Blacktown Ex-Blackwoods 7.71 May 16 Geraldton Showrooms BCF and Ultra Tune 3.32 Aug 16 1 Before selling costs of $0.2 million 2 Before selling costs of $0.1 million 21
Slide 22: Bunnings Warehouse replacements
Portfolio – Bunnings Warehouse replacements For personal use only Lease Duration of Property Progress expiry occupancy1 Altona Sep 2018 18yrs Option agreement expiring in September 2016 to sell property Cairns Feb 2018 15yrs Continuing to assess repositioning/ sale options Lease assigned to ASX-list
Slide 23: Capital Management
lan bwp TRUST i$) CAPITAL MANAGEMENT
Slide 24: Capital management – debt facilities
Capital management – debt facilities > Average borrowings for the year $483.4m (up 4.5% on previous year) For personal use only - 5.0% weighted average cost of debt after hedging (2015: 5.5%) - Borrowing costs for the year $24.3m (down 5.8% on pcp) > All bank facilities can be extended a further yea
Slide 25: Capital management – interest rate hedging
Capital management – interest rate hedging For personal use only Hedge book profile by Jun 16 Dec 16 Jun 17 Dec 17 Jun 18 Dec 18 half-year ending: Active swaps ($m) 175 165 140 128 88 58 Swap rates (%) Maximum 5.54 5.54 5.54 5.54 5.54 4.92 Minimum 2.39 2.39 2.39 2.39 2.39 2.39 Weighted average (%)1
Slide 26: Strategic Agenda
lan bwp TRUST STRATEGIC AGENDA
Slide 27: Strategic Agenda
For personal use only Strategic Agenda 27
Slide 28: Strategic agenda – solid foundations
Strategic agenda – solid foundations > Drivers For personal use only – Exposure to a business model focused on location – Long duration of occupancy – Portfolio built over an 18 year period > Short term variables – Like-for-like rental growth, range last 10 years, 2.1% – 7.1%pa – Annual variation in
Slide 29: For personal use only
For personal use only
Slide 30: 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 31: 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 31
Slide 32: 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) (%) (%) Vacant 1 420,000 0.3% 0.0% 0.3% 1 30-Jun-17 6 4,439,366 3.0% 2.1% 0.9% 2 30-Jun-18 8 9,359,629 6.2% 5.6% 0.6% 3 30-Ju
Slide 33: 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 FY2017 FY2018 FY2019 FY2020 FY2021 BWH market reviews 8 8 13 11 17 % of total1 9% 8% 15% 13% 19% Independent valuations 30 24 25 30 24 % of total2 38% 2