Slide 1: Full-year results to 30 June 2019
For personal use only Full-year results to 30 June 2019 August 2019
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 Andrew Ross >Portfolio Portfolio Manager BWP Management Limited >Core portfolio David Hawkins >Alternative use properties Finance Manager BWP Management Limited >Capital management
Slide 4: Summary
Summary For personal use only Wollongong, NSW 4 SUMMARY | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 5: 2019 full-year results at a glance
2019 full-year results at a glance For personal use only $156.3m ⇧ $116.4m ⇧ 18.11 cpu ⇧ $2.92 pu ⇧ 15.5% pa Total revenue 1.9%1 Dist. amount 1.7%1,2 Ordinary dist. 1.7%1,2 NTA 2.5%1 10 yr total return PORTFOLIO PORTFOLIO CAPITAL PERFORMANCE MANAGEMENT MANAGEMENT 2.3% 97.4% 1.56 cents like-for-like
Slide 6: Bunnings
Bunnings For personal use only > 265 Bunnings Warehouse stores across Australia and New Zealand at 31 Dec 2018 > Half-year revenue of $6.9 billion, up 5.2 per cent per comparable period > Addressable Australian market, sales of $78 billion per annum > Key strategies: – Building a stronger offer: in
Slide 7: BWP sustainability and climate risk actions
BWP sustainability and climate risk actions For personal use only > 86 per cent of the Trust’s properties have LED lighting in one or more of the car park, nursery trading area, canopy trading area, or in the main store > 13 properties in portfolio have solar power generation installed > 92 per cent
Slide 8: Results
Results For personal use only Port Melbourne, VIC 8 RESULTS | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 9: Financial performance vs PCP
Financial performance vs PCP1 For personal use only FY2019 PCP Total revenue $156.3m $153.4m Management expense ratio 0.62% 0.60% Other expenses $7.3m $6.0m Distributable profit2 (excluding revaluations) $115.9m $113.2m Number of units on issue 642.4m 642.4m Full-year ordinary distribution per unit
Slide 10: Financial performance monthly
Financial performance 6 monthly For personal use only 6 months to 6 months to 6 months to Jun 2019 Dec 2018 Jun 2018 Total revenue $77.3m $79.0m $76.5m Management expense ratio 0.62% 0.62% 0.60% Other expenses $3.8m $3.5m $3.0m Distributable amount1 $59.0m $57.4m2 $56.8m Property revaluation gains $
Slide 11: Financial summary year performance
Financial summary 5 year performance For personal use only FY2019 FY2018 FY2017 FY2016 FY2015 Revenue $156.3m $153.4m $152.5m $150.2m $144.9m Distributable profit1 $116.4m $114.4m $112.5m $107.9m $101.6m Total assets $2,382.3m $2,369.5m $2,312.8m $2,200.5m $2,018.0m Borrowings $412.7m $457.6m $471.1
Slide 12: Portfolio
Portfolio For personal use only Morayfield, QLD 12 PORTFOLIO | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 13: FY2019 like-for-like rental growth
FY2019 like-for-like rental growth For personal use only Proportion of rental income Average increase 4% Market -1.4%1 2.3% 47% Fixed 3.0% like-for-like rental growth 49% CPI 1.9% Year ended 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 30 June (%) Rental growth2 2.3 2.43 2.1 2.4 2.9 4.0 2.1 4.0
Slide 14: Bunnings market rent review outcomes
Bunnings market rent review outcomes For personal use only > One Bunnings market rent review from FY2019 and two market rent reviews from FY2018 were resolved during the 12 months to 30 June 2019 Passing rent Reviewed rent Property location Effective date ($pa) ($pa) Fyshwick, ACT1,2 1,233,359 1,233
Slide 15: FY2019 rent reviews
FY2019 rent reviews For personal use only > Three Bunnings Warehouse market rent reviews due in FY20181 and six market rent reviews due in FY20192 currently in negotiation Rent review type FY2019 (all leases) % of rental First-half Second-half income3 CPI 27 18 47% Fixed 20 26 42% Market 8 4 11% Tot
Slide 16: Capitalisation rate trends
Capitalisation rate trends For personal use only > New Bunnings Warehouse store yields remain stable in the 5.0 per cent to 5.5 per cent range Bunnings transaction yields 10.00% 9.00% 8.00% 7.00% Bunnings Portfolio Acquisitions by BWP 6.00% 5.00% 4.00% 3.00% Jun‐10 Jan‐11 Aug‐11 Feb‐12 Sep‐12 Mar‐13
Slide 17: June 2019 revaluation
June 2019 revaluation For personal use only > June 2019 weighted average capitalisation rate 6.30 per cent (Dec 2018: 6.40 per cent) – 14 independent valuations (20 per cent of BWP portfolio value), average cap rate 6.02 per cent – 61 internal valuations, average cap rate 6.37 per cent – Stand alone
Slide 18: June 2019 independent valuations
June 2019 independent valuations For personal use only Jun 2019 Dec 2018 Jun 2019 Valuation Dec 2018 Jun 2019 Cap Rate Term Property State Valuation Valuation Movement Cap Rate Cap Rate Movement Certain ($m) ($m) ($m) (years) Rydalmere NSW 5.50% 57.4 5.25% 62.0 -0.25% 4.6 6.7 Thornleigh NSW 6.50% 21
Slide 19: Core portfolio
Core portfolio For personal use only Rydalmere, NSW 19 CORE PORTFOLIO | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 20: Core portfolio summary
Core portfolio summary For personal use only 66 4.5 years properties portfolio WALE 14,031m2 3.3 ha average lettable average land area area 75% 82% upgrade metro located properties or properties occupied <12yrs 6.07% weighted average cap rate 20 CORE PORTFOLIO | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 21: Weighted average lease expiry profile
Weighted average lease expiry profile For personal use only 25% 20% % of Rental Income 15% 10% 5% 0% FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 1 2 BWH <12 yrs occ. + upgrades BWH >12 years occ. Showrooms 1 Includes both proposed and completed upgrades 2 Includes Northland which has been reta
Slide 22: Lease expiries next three years
Lease expiries next three years For personal use only > Five year options recently exercised for Bibra Lake (WA), Albany (WA), Maitland (NSW), Thornleigh (NSW), and Noarlunga (SA) Lease Rent Property Options Comments expiry ($’000pa) Fountain Gate Jan 2020 2 x 5 yrs 1,760 Notification required by Oc
Slide 23: Croydon upgrade
Croydon upgrade For personal use only > Upgrade cost of $4.0 million at a funding rate of 5.5 per cent > Upgrade increases the total retail area by 2,190 square metres incorporating an expansion of the timber trade sales and nursery areas > Anticipate completion mid-2020 > On completion of the works
Slide 24: Alternative use properties
Alternative use For personal use only properties Balcatta, WA 24 ALTERNATIVE USE PROPERTIES | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 25: Hoxton Park repositioning
Hoxton Park repositioning For personal use only > Bunnings surrendered its lease in June 2019 ($2.15 million surrender fee to BWP) > New large format retail leases secured to occupy over 70 per cent of the building area > Tenants include Total Tools, Totally Work Wear, Crunch Fitness, Jaycar and Sou
Slide 26: Other stores being repositioned
Other stores being repositioned For personal use only Property Lease expiry1 Progress Development complete with Amart Furniture and Snooze open and trading. Mandurah Expired Negotiations with other LFR tenants progressing for the remaining lettable area of 2,560sqm Concept and feasibility finalised
Slide 27: Divestments
Divestments For personal use only Sale price Property Lease expiry1 Progress ($m) Under conditional option agreement to sell to unrelated third Underwood Apr 2019 Undisclosed party, progressing toward satisfaction of conditions Under conditional option agreement to sell to unrelated third Belmont No
Slide 28: Capital management
Capital For personal use only management Nunawading, VIC 28 CAPITAL MANAGEMENT | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 29: Debt facilities
Debt facilities For personal use only > Average borrowings for the year $458.3 million (down 2.6 per cent on prior corresponding period) – 4.3 per cent per annum weighted average cost of debt after hedging (2018: 4.6 per cent per annum) – Borrowing costs for the year $19.6 million (down 8.8 per cent
Slide 30: Debt duration
Debt duration For personal use only Debt maturity profile as at 30 June 2019 Volume (A$M) 300 90.4 200 44.6 100 52.0 110.0 100.0 100.0 58.0 0 FY FY FY FY FY FY FY 20 21 22 23 24 25 26 Bonds Drawn bank facilities Undrawn bank facilities 30 CAPITAL MANAGEMENT | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 31: Interest rate hedging
Interest rate hedging For personal use only Hedge book profile by Jun 2019 Dec 2019 Jun 2020 Dec 2020 Jun 2021 Dec 2021 half-year ending Active swaps ($m) 98 98 85 85 70 40 Swap rates (%) Maximum 4.92 4.92 4.12 4.12 2.60 2.60 Minimum 2.39 2.39 2.39 2.39 2.39 2.60 Weighted average (%)1 3.07 3.07 2.79
Slide 32: Outlook
Outlook For personal use only Fountain Gate, VIC 32 OUTLOOK | FULL-YEAR RESULTS TO 30 JUNE 2019
Slide 33: Outlook
Outlook For personal use only Macro economic environment > Low interest rates, returns and growth > Demand for Bunnings Warehouse properties is expected to remain stable other than if a major risk event impacts valuations and/or liquidity in the Australian property sector > The Trust is well positio
Slide 34: 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 34 FURTHER INFORMATION | FULL-YEAR RESULTS TO 30 JUNE 2019