Slide 1: Half-year results to 31 December 2017
For personal use only Half-year results to 31 December 2017 February 2018
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 > Portfolio Andrew Ross Portfolio Manager > Core portfolio BWP Management Limited > Alternative use properties David Hawkins Finance Manager > Capital management BWP Management Li
Slide 4: Summary
For personal use only SUMMARY
Slide 5: Value drivers
Value drivers For personal use only underlying strength of the long duration of Unique large sites in high Australian Home occupancy by portfolio population areas Improvement Bunnings market Solid capital ongoing Capital low re-financing positioned for structure markets support risk growth Disciplin
Slide 6: 2017/18 Half-year summary
2017/18 Half-year summary For personal use only $76.9m $56.4m 8.78 cpu $2.82 10.0% pa Total revenue 1.6%1 Dist. profit 1.7%1 Distribution 1.7%1 NTA 8.5%1 10 yr total return Portfolio performance Portfolio management Capital management 2.4% 79 19.8% like-for-like rental growth properties in portfolio
Slide 7: Results
For personal use only
Slide 8: Results - financial performance
Results - financial performance 6 monthly For personal use only 6 months 6 months to Dec 17 to Dec 16 Total revenue $76.9m $75.8m Management expense ratio 0.61% 0.62% Other expenses $2.9m $3.0m Distributable profit $56.4m $55.5m Property revaluation gains $46.9m $17.9m Net profit including property
Slide 9: Portfolio
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Slide 10: Portfolio - FY2018 Bunnings market rent review outcomes
Portfolio - FY2018 Bunnings market rent review outcomes For personal use only > Four Bunnings market rent reviews resulted in a 4.1% increase, three from FY2017, and one due during the period Reviewed rent Property location Passing rent ($pa) Variance (%) Effective date ($pa) Croydon, VIC1 1,868,741
Slide 11: Portfolio - capitalisation rate trends
Portfolio - capitalisation rate trends For personal use only > Solid ongoing transactional support for new store yields > Secondary market sales with shorter remaining term certain seeing strong support however at a 50-100 basis point yield margin to new store transactions Bunnings transaction yield
Slide 12: Portfolio - December 2017 revaluation
Portfolio - December 2017 revaluation For personal use only > December 2017 weighted average capitalisation rate 6.50% (June 2017: 6.59%) – Stand alone Bunnings Warehouses weighted average cap rate of 6.38% • 12 independent valuations (15% of BWP portfolio value), average cap rate 6.31% • 67 interna
Slide 13: Portfolio - December 2017 independent valuations
Portfolio - December 2017 independent valuations For personal use only Dec-17 Jun-17 Jun-17 Dec-17 Valuation Dec-17 Cap Rate Term Property State Cap Valuation Valuation Movement Cap Rate Movement Certain Rate ($m) ($m) ($m) (years) Craigieburn VIC 6.25% 26.0 6.00% 27.0 -0.25% 1.0 4.4 Hawthorn VIC 6.
Slide 14: Portfolio - weighted average lease expiry profile
Portfolio - weighted average lease expiry profile For personal use only 25% 20% % of Rental Income 15% 10% 5% 0% CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26 CY27 1 BWH <12 yrs occ. + upgrades BWH >12 years occ. Showrooms Replacement BWHs Masters Impacted 1 Includes both proposed and completed upgra
Slide 15: Core portfolio
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Slide 16: Core portfolio - summary
Core portfolio - summary For personal use only 67 5.3 years properties portfolio WALE 3.3ha 13,990m2 average land area average lettable area 78% 40% metro located properties metro located properties within 20kms of CBD 76% 6.22% upgrade properties or weighted average cap rate occupied <12yrs 16
Slide 17: Core portfolio - weighted average lease expiry profile
Core portfolio - weighted average lease expiry profile For personal use only 25% 20% % of Rental Income 15% 10% 5% 0% CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26 CY27 1 BWH <12 yrs occ. + upgrades BWH >12 years occ. Showrooms 1 Includes both proposed and completed upgrades 17
Slide 18: Core portfolio - lease expiries next years
Core portfolio - lease expiries next 3 years Rent Property Lease expiry Options Comments For personal use only ($’000pa) Villawood May 2018 5 x 5 yrs 1,739 Five year option exercised in February 2018 Port Macquarie Nov 2018 2 x 5 yrs 1,034 Notification required by Aug 2018; property well located in
Slide 19: Alternative use properties
ALTERNATIVE USE PROPERTIES MUORISeniNOS Bf
Slide 20: Bunnings Warehouse replacements
Bunnings Warehouse replacements For personal use only Property Lease expiry1 Progress Lease surrendered Awaiting Planning Minister approval for redevelopment before adjoining owner exercises Altona under Option option to acquire the property Agreement Cairns Feb 2018 Re-leasing campaign ongoing Curr
Slide 21: Masters impacted stores
Masters impacted stores For personal use only > Home Consortium transaction completed in late 2017 Property Lease expiry1 Proposed alternative use/s Anchor tenant terms almost finalised; negotiations with national retailers for remaining Mandurah Nov 2018 lettable area progressing; expect to commenc
Slide 22: Dandenong
Dandenong For personal use only > Property sold (via direct negotiation off-market) to an unrelated third party for $16.4 million in November 2017 > Bunnings relocated to the Dandenong South ex-Masters > Demonstrates demand for well-located sites supporting strong underlying land value Outcome Purch
Slide 23: Capital management
i$) CAPITAL MANAGEMENT
Slide 24: Capital management - debt facilities
Capital management - debt facilities > Average borrowings for the half-year $476.3m (down 0.2% on pcp) For personal use only - 4.65% p.a. weighted average cost of debt after hedging (2016: 4.69% p.a.) - Borrowing costs for the half-year $11.2m (down 1.0% on pcp) > All bank facilities can be extended
Slide 25: Capital management - debt duration
Capital management - debt duration For personal use only Debt maturity profile 300 90 200 200 Volume (A$M) 155 100 110 0 FY FY FY FY FY 18 19 20 21 22 Bonds Drawn bank facilities Undrawn bank facilities 25
Slide 26: Capital management - interest rate hedging
Capital management - interest rate hedging For personal use only Hedge book profile by Dec 17 Jun 18 Dec 18 Jun 19 Dec 19 Jun 20 half-year ending: Active swaps ($m) 128 88 58 98 98 85 Swap rates (%) Maximum 5.54 5.54 4.92 4.92 4.92 4.12 Minimum 2.39 2.39 2.39 2.39 2.39 2.39 Weighted average (%)1 4.1
Slide 27: Outlook
For personal use only
Slide 28: Outlook
Outlook For personal use only > Macro economic environment – Demand for Bunnings Warehouse properties expected to remain strong, while capital continues to flow into the Australian property sector > Rental growth – 18 CPI/ 23 fixed rent reviews in second half FY2018 – 5 Bunnings MRRs to be finalised
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