Slide 1: For personal use only
For personal use only 10 February 2009
Slide 2: Presentation outline
For personal use only Presentation outline • Overview Grant Gernhoefer General Manager • Results Bunnings Property Management Limited • Portfolio • Capital management • Structure Andrew Ross Portfolio Manager • Outlook Bunnings Property Management Limited 1
Slide 3: Overview
For personal use only Overview Solid earnings and strong balance sheet to navigate through tough market conditions Defensive characteristics - well placed to face further volatile market conditions Underlying strengths of the Trust • Traditional property trust % BWP unit price vs S&P/ASX 200 A-REIT
Slide 4: Results - performance
For personal use only Results - performance Revenue $35.1 million 10.0% on pcp Net (loss)/profit including revaluations ($23.4 million) $33.9 million pcp Distributable profit (excludes revaluations) $20.5 million 3.6% on pcp Half-year distribution 6.70 cpu 2.3% on pcp Total assets $968.3 million 2.5
Slide 5: Results - distributions
For personal use only Results - distributions 2009 Interim distribution per unit – 2.3% increase on pcp 14 12 10 6 .5 6 6 .7 2 6 .3 9 cents per unit 5 .8 7 6 .1 7 8 5 .3 5 4 .8 6 4 .9 7 4 .6 8 6 4 .7 0 4 6 .2 2 6 .4 2 6 .5 5 6 .7 0 5 .1 5 5 .5 1 5 .7 9 4 .7 0 4 .5 0 4 .8 0 2 2 .5 0 0 FY9 9 1 FY0 0 F
Slide 6: Valuation process
For personal use only Portfolio Valuation process • entire portfolio revalued every 6 months • independent valuations on a 3 year cycle for each property (13 for period) • balance of portfolio – directors’ valuation using recognised valuation methodology • directors’ valuations methodology reviewed
Slide 7: Valuations
For personal use only Portfolio Valuations Independent valuations 31 Dec 07 30 June 08 31 Dec 08 30 Jun 09 VIC 3 1 4 1 WA 2 1 2 3 QLD - 3 3 4 NSW/ACT - 2 4 1 SA - 2 - - Proportion of 1 2 3 3 portfolio value 11% 13% 27% 16% 1 percentage based on fair value as at 31 December 2007 2 percentage based on
Slide 8: Valuations – capitalisation rate impact on gearing
For personal use only Portfolio Valuations – capitalisation rate impact on gearing • gearing levels comfortably within Loan to Value Ratio covenant limit Dec 07 Jun 08 Dec 08 Cap rate 6.58% 7.08% 7.57% Gearing 27.7% 31.5% 35.5% • sensitivity analysis undertaken by management shows that for gearing t
Slide 9: Acquisition of Bunnings Warehouse
For personal use only Portfolio Acquisition of Bunnings Warehouse Mt Gravatt, QLD ($11.2m + $0.7m acq. costs) – Dec 08 • 10km south of Brisbane CBD • 2.7ha site; 10,432 m2 total retail area Mt Gravatt, QLD • 7 years + 5 x 5 year options • annual rent $0.97m • 8.0% capitalisation rate on net income •
Slide 10: Development
For personal use only Portfolio Development Cannon Hill, QLD ($1.2m) – Dec 08 • amalgamation of Trust owned Bunnings Warehouse with adjoining Distribution Centre into a Bunnings Warehouse with a retail trading area of 16,446m2 • incremental rent $0.2m pa ($0.1m represents 8.0% return on capital outl
Slide 11: New multi-level format Bunnings Warehouse completed
For personal use only Portfolio New multi-level format Bunnings Warehouse completed Hawthorn, VIC (site acquired in Apr 07) • new multi-level format 7,462m2 Bunnings Warehouse on 0.84ha site opened in Dec 08 • final development payment of $24.1m by Trust • 12 years + 4 x 5 year options Hawthorn, VIC
Slide 12: Market rent reviews
For personal use only Portfolio Market rent reviews Typical Bunnings Warehouse market rent review clause • assumes free and open market with vacant possession • has regard to the rent paid by Bunnings at other Bunnings Warehouses • has regard to the rental value of other properties of a similar size
Slide 13: Market rent reviews completed
For personal use only Portfolio Market rent reviews completed Passing Determined/ Market Rent rent negotiated rent Reviews ($’000) ($’000) Uplift % Effective date Altona, VIC 965 994* +3 24 Sep 08 Broadmeadows, VIC 957 1,060 +11 24 Sep 08 Rocklea, QLD 1,412 1,412* +0 13 Oct 08 Scoresby, VIC 1,115 1,
Slide 14: Market rent reviews remaining in FY09
For personal use only Portfolio 16 market rent reviews remaining in FY09 Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY09 FY09 FY09 FY09 Key VIC Burleigh Heads WA Underwood QLD Southport NSW/ACT Mentone Hemmant (DC) Sandown Port Macquarie Sunshine Tuggeranong Balcatta Minchinbury Lismore Joondalup Mandu
Slide 15: Properties – good geographic spread
For personal use only Portfolio 60 properties – good geographic spread ) 53 Bunnings Warehouses ) 1 Bunnings distribution centre . 1 Bunnings Warehouse development site ) 4 Industrial properties ) 2 Bulky goods showrooms* ) 9 Dec 08 ) 10 )1 VIC *21 )1 )2 NSW/ACT 14 )1 )1 )1 QLD 10 ) 13 WA 12 ) 19 SA
Slide 16: 6.8 year weighted average lease expiry
For personal use only Portfolio 6.8 year weighted average lease expiry (by rental income) Typical Bunnings Warehouse lease features • 15 years (plus 2 x 5 year options) • 5 yearly market rent reviews (majority uncapped) • annual CPI escalation • Wesfarmers covenant 24 20 4 Number of leases 16 12 Non
Slide 17: Future Bunnings Warehouse revaluations and market rent reviews
For personal use only Portfolio Future Bunnings Warehouse revaluations and market rent reviews FY09 FY10 FY11 FY12 FY13 Rent reviews 21 11 4 7 7 Revaluations 22 20 19 22 20 16
Slide 18: Capital management – debt facilities
For personal use only Capital management Debt facilities As at 31 Dec 08 Limit ($m) Drawn ($m) Expiry ANZ 100 98.2 31 Jul 2010 NAB 100 89.3 Evergreen 2 CBA 100 100 14 Jan 2010 3 WBC 80 57.9 1 July 2010 380 345.41 1 Amount drawn includes accrued interest of $1.175 million as at 31 December 2008 2 To
Slide 19: Capital management – gearing
For personal use only Capital management Gearing at 35.5% Drivers • cap rate movement • solid rental base with growth from CPI and programmed rent reviews • capex – low level of committed capex • Distribution Reinvestment Plan (≈ $6.5m per half) 50% LVR limit 40% Preferred range 30% 20% 10% 0% 1 1 2
Slide 20: Capital management – interest rate management
For personal use only Capital management Interest rate management • $255.0 m hedged (74%) • 6.76% weighted average interest rate for all debt during the half-year after hedging and including margins and fees (2007: 6.39%) • 3.15 years weighted average maturity, including delayed starts (2007: 2.5 ye
Slide 21: Structure
For personal use only Structure Manager: Bunnings Property Management Limited Subsidiary of Wesfarmers Limited but…independent board • John Austin (Chairman); Leighton Properties (Chairman), MREEF, Ringmer Pacific, ex Jones Lang LaSalle • Peter Mansell; ThinkSmart (Chairman), OZ Minerals, Great Sout
Slide 22: Outlook
For personal use only Outlook The Trust remains well placed to weather current market volatility • reliable, CPI indexed income stream • conservative gearing with Loan to Value Ratio headroom • active Distribution Reinvestment Plan • no exposure to currency risk impact to earnings or valuations • lo