Bwp Trust · ASX:BWP
Bwp Trust — Merrill Lynch 2011 Australian REIT Conference
30 slides from Bwp Trust's conference presentation, Nov 7, 2011
Slide 1: Merrill Lynch 2011 Australian REIT Conference Presentation Materials
For personal use only 7 November 2011 MERRILL LYNCH 2011 AUSTRALIAN REIT CONFERENCE PRESENTATION MATERIALS Attached are the investor presentation materials to be presented by BWP Management Limited, the responsible entity for BWP Trust, at the Merrill Lynch 2011 Australian REIT Conference taking pla
Slide 2: Australian REIT Conference, Sydney 8-9 November 2011
For personal use only Australian REIT Conference Sydney 8-9 November 2011
Slide 3: 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 4: Information outline
Information outline For personal use only Grant Gernhoefer > BWP profile General Manager BWP Management Limited > Portfolio overview > Strategy Andrew Ross Portfolio Manager > Domain Central BWP Management Limited > Outlook
Slide 5: BWP profile – snapshot
BWP profile – snapshot For personal use only > Traditional real estate investment trust (exposed to direct property only, limited development risk, no funds management activity, externally managed) > Domestic focus, with predominantly warehouse retailing properties, particularly Bunnings Warehouse h
Slide 6: BWP profile – market performance
BWP profile – market performance For personal use only > BWP unit price has outperformed during exceptionally difficult market conditions BWP unit price vs S&P/ASX 200 A-REIT index & All Ordinaries index 3 years to 30 September 2011 Source: Reuters, rebased to 100 for periods ended 30 September 2011
Slide 7: BWP profile – total returns
BWP profile – total returns For personal use only > BWP total returns compared to market – periods ended 30 September 2011 Total returns include distributions and movement in price (assumes distributions are reinvested). Source: UBS 6
Slide 8: BWP profile – distributions
BWP profile – distributions For personal use only 13.27 13.30 12.98 12.61 11.96 12.08 11.98 11.57 11.38 10.50 9.56 9.77 9.18 1 2 3 4 5 1 BWP commenced trading in Sep 98 2 end of concessional management fee 3 final distribution FY09 – impacted by additional units issued from $150 million capital rais
Slide 9: Portfolio – geographic spread
Portfolio – geographic spread 1 For personal use only 60 Bunnings Warehouses 2 Bunnings Warehouse and showrooms 3 Bunnings Warehouse development sites 1 Bunnings distribution centre 1 Bulky goods showrooms 11 3 Industrial properties 13 1 1 1 2 BWP rental income1 1 15 WA 18% 1 SA 4% 1 VIC 39% QLD 19%
Slide 10: Portfolio – lease expiry
Portfolio – lease expiry For personal use only > 8.4 year weighted average lease expiry (by rental income) at 30 September 2011 Lease expiry profile 16 Non Bunnings Bunnings 14 1 12 Number of leases 10 8 14 6 12 2 10 3 3 4 3 5 2 4 4 1 3 3 3 2 2 1 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Years to expi
Slide 11: Portfolio – rental income
Portfolio – rental income For personal use only > Typical Bunnings Warehouse leases feature: – Minimum 10 year initial term – Generally, 5 yearly market rent reviews (plus 5 year tenant options) (majority uncapped) – Annual CPI or 3% escalation with periodic – Wesfarmers covenant market reviews (A-
Slide 12: Portfolio – major tenant
Portfolio – major tenant For personal use only > Majority of BWP income underpinned by the highly successful Bunnings business Revenue ($m) Bunnings Group Limited EBIT ($m) 7,000 900 Trading revenue (LHS) EBIT (RHS) 800 6,000 700 5,000 600 4,000 500 3,000 400 300 2,000 200 1,000 100 - - FY02 FY03 FY
Slide 13: Portfolio – pipeline
Portfolio – pipeline For personal use only > Capital committed to Bunnings Warehouse acquisitions & developments1 Property $m Acquisitions Craigieburn2 18.42 Wallsend3 2.50 20.92 Developments Greenacre 16.75 Fyshwick 15.00 Rocklea 3.83 Scoresby 6.26 Wallsend3 18.79 60.63 Total 81.55 1 As at 30 Septe
Slide 14: Strategy – planning process
Strategy – planning process For personal use only > Annual review of strategic direction and on-going monitoring of business plans Core purpose Strategies Reviewed annually to ensure continued relevance Objectives Actions set annually and progress Business plan reviewed at each board meeting 13
Slide 15: Strategy – strategic direction
Strategy – strategic direction For personal use only > 3 main strategies directed towards BWP’s core purpose Core purpose Provide a premium commercial real estate investment product, providing unitholders with a secure and growing income stream and long-term capital growth Strategies Drive better re
Slide 16: Strategy – asset management
Strategy – asset management For personal use only > Extract more from existing assets Strategies Drive better returns Deliver efficiency, Generate growth by from existing assets sustainability and value acquiring quality through focused and through effective commercial properties pro-active asset ma
Slide 17: Strategy – stewardship
Strategy – stewardship For personal use only > Operate effectively for competitive advantage Strategies Drive better returns Deliver efficiency, Generate growth by from existing assets sustainability and value acquiring quality through focused and through effective commercial properties pro-active a
Slide 18: Strategy – acquisitions
Strategy – acquisitions For personal use only > Build the portfolio selectively Strategies Drive better returns Deliver efficiency, Generate growth by from existing assets sustainability and value acquiring quality through focused and through effective commercial properties pro-active asset manageme
Slide 19: Strategy – current priorities
Strategy – current priorities For personal use only Asset management > Upgrades of existing properties (to increase income, improve building format, and extend lease expiry) > Redeploy or divest properties that have reached optimal value for BWP (crystallise capital growth for unitholders, recycle c
Slide 20: Strategy – acquisition diversification
Strategy – acquisition diversification For personal use only > Bunnings Warehouses provide a successful and high profile tenant and attractive property characteristics (strong covenant, long-term leases, low on-going capital and management requirement, moderate purchase price) > Consequently, buying
Slide 21: Domain Central – acquisition rationale
Domain Central – acquisition rationale For personal use only Super homemaker centres – emerging format for growth > Large scale prime homemaker centres, anchored by a range of national and chain retailers offer a refinement on conventional bulky goods concept > Predominance of national and chain ret
Slide 22: Domain Central – impact on BWP portfolio
Domain Central – impact on BWP portfolio For personal use only > Increased portfolio exposure to Queensland Geographic diversification (by value) 4% 3% 4% 3% 18% 17% 19% 18% Post transaction NSW NSW VIC VIC QLD QLD WA WA 16% SA 20% 38% SA 40% ACT ACT > Acquisition diversifies BWP portfolio tenant ba
Slide 23: Domain Central – transaction summary
Domain Central – transaction summary For personal use only > Agreement to acquire a 50% interest in Domain Central Homemaker Centre > Subject to conditions precedent relating to refinancing by the vendor (outcome likely to be determined late 2011) > Vendor retains 50% ownership and will manage the p
Slide 24: Domain Central – property overview
Domain Central – property overview For personal use only > Property located 6km south-west of Townsville CBD > Domain Central forms part of an integrated homemaker precinct (Appendix A) > The precinct incorporates a freestanding Bunnings Warehouse, Harvey Norman, Spotlight and Anaconda complex—not i
Slide 25: Domain Central – tenancy profile
Domain Central – tenancy profile For personal use only > Broad tenancy mix: national/chain retailers comprise 88% of gross lettable area > 90% of national/chain retailers are company operated stores > Top 10 tenants (by rent) account for 37% of rental income and 43% of area > No rental arrears at 30
Slide 26: Domain Central – lease expiry profile
Domain Central – lease expiry profile For personal use only > Leases are generally 5–10 years with annual fixed or consumer price index reviews and periodic market rent reviews > Staggered lease expiry profile of Domain Central reduces re-leasing risk Lease expiry profile (by area) 25
Slide 27: Outlook
Outlook For personal use only > Rental income strengthened as a result of the acquisitions of Bunnings Warehouse properties, upgrades of existing properties and rent reviews during 2011 > Proposed acquisition of Domain Central and committed upgrades and developments of Bunnings Warehouses will bolst
Slide 28: Outlook – impact of Masters
Outlook – impact of Masters For personal use only Preliminary assessment > Too early to assess impact on hardware industry and property market. Preliminary view is that there is sufficient differentiation in offer and relative pricing to support two major players Potential impacts for BWP > Reinforc
Slide 29: Further information
Further information For personal use only Visit: www.bwptrust.com.au Responsible entity: BWP Management Limited Tel: +61 8 9327 4356 Email: ggernhoefer@bwptrust.com.au 28
Slide 30: Appendix A: Domain Central site plan
Appendix A Domain Central site plan For personal use only Subject property 29 29
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