Bwp Trust · ASX:BWP
Bwp Trust — Bunnings Warehouse Property Trust — FY2010 Earnings Presentation
26 slides from Bwp Trust's earnings presentation, Aug 12, 2010
Slide 1: Bunnings Warehouse Property Trust Full year results 2010
For personal use only BUNNINGS WAREHOUSE PROPERTY TRUST Full year results 2010 August 2010
Slide 2: Presentation outline
For personal use only Presentation outline Grant Gernhoefer • Overview General Manager • Results Bunnings Property Management Limited • Portfolio • Capital management Andrew Ross Portfolio Manager • Governance Bunnings Property Management Limited • Outlook 2
Slide 3: Overview
For personal use only Overview • Income growth and portfolio enhancements lift values – 9.1% increase from 10 market rent reviews helps lift income by 7.3% from previous year – Portfolio enhanced by extending leases of 35 Bunnings Warehouses – 9.3 year weighted average lease expiry – 99.2% occupancy
Slide 4: Results - performance
For personal use only Results - performance 2009/10 Previous corresponding period Revenue $78.5 million 7.3% on pcp Net profit/(loss) including revaluations $92.2 million ($11.7) million pcp Distributable profit (excluding revaluations) $50.4 million 24.6% on pcp Full year distribution 12.08 cpu 4.4
Slide 5: Results - distributions
For personal use only Results - distributions Compound annual growth rate since inception of Trust 4.8% 14 12 10 6.56 6.72 6.39 4.87 5.98 cents per unit 6.17 5.87 8 5.35 4.86 4.97 4.68 6 4 6.22 6.42 6.55 6.70 6.10 5.15 5.51 5.79 4.70 4.50 4.80 2 0 1 2 3 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 F
Slide 6: Results – total returns
For personal use only Results – total returns BWP total returns compared to market – periods ended 30 June 2010 Total returns include distributions and movement in price (assumes distributions are reinvested). Source: UBS 6
Slide 7: Portfolio – geographic spread
For personal use only Portfolio – geographic spread 53 Bunnings Warehouses 1 Bunnings distribution centre 1 Bunnings Warehouse development site 4 Industrial properties 2 Bulky goods showrooms* * showrooms at Bayswater are on the same site as the Bayswater BWH BWP rental income (as at 30 June 2010) S
Slide 8: Portfolio - Extended Lease Tenure
For personal use only Portfolio - Extended Lease Tenure • 35 leases extended by either 5 or 10 years (average 6 years) • Secures future rental income – Approximately $280m* over the average 6 years’ increased committed term – Reduces re-leasing or vacancy risk • Increases value of some subject prope
Slide 9: Portfolio - WALE
For personal use only Portfolio - WALE 9.3 year weighted average lease expiry (by rental income) Typical Bunnings Warehouse Property Trust lease features: – 15 years (plus 2 x 5 year options) – 5 yearly market rent reviews (majority uncapped) – annual CPI escalation – Wesfarmers covenant (BBB+ credi
Slide 10: Portfolio – FY10 rent reviews
For personal use only Portfolio – FY10 rent reviews Proportion of rental income Average increase 15% Market 9.1% 6% Fixed 4.0% 2.9% like-for-like CPI 1.6% rental growth 79% Like-for-like rental growth FY04 FY05 FY06 FY07 FY08 FY09 FY10 BWP 8.2% 4.1% 3.0% 4.4% 2.8% 7.1% 2.9% Note: Like-for-like renta
Slide 11: Portfolio – FY10 market rent reviews
For personal use only Portfolio – FY10 market rent reviews # Passing rent Determined Uplift Uplift Property location ($’000) rent ($’000) ($’000) (%) Effective date Albany, WA 570 745 178 +30.6 1 Nov 09 Bibra Lake, WA 1,217 1,489 272 +22.3 1 Nov 09 Fountain Gate, VIC* 1,281 1,325 44 +3.4 1 Feb 10 Ho
Slide 12: Portfolio - revaluations
For personal use only Portfolio - revaluations • Cap rate compression following lease extensions – Consistent sales evidence (refer Appendix B for details): CY 2009 – 11 sales average yield 7.79%, WALE 9.75 years; no sales in CY 2010 – 17% of BWP portfolio independently valued in June 2010 – Indepen
Slide 13: Portfolio – future revals and reviews
For personal use only Portfolio – future revals and reviews Future Bunnings Warehouse revaluations and market rent reviews FY11 FY12 FY13 FY14 FY15 Rent reviews 4 7 7 21 11 % of total 8% 13% 13% 40% 21% Revaluations 15 24 20 15 24 % of total 28% 45% 38% 19% 45% Refer Appendices C & D for outline of
Slide 14: Portfolio – developments
For personal use only Portfolio – developments • Broadmeadows, VIC ($5.7m) – 433m2 vacant site adjoining existing Trust owned Bunnings Warehouse acquired in May 2010 – 1,287m2 expansion of Bunnings Warehouse commenced in June 2010 – expected completion date for expansion end of 2010 calendar year –
Slide 15: Capital management
For personal use only Capital management • Balance sheet strength supported by: – low gearing - 18.8% at 30 June 10 (19.3% covenant gearing) – strong lease covenant in Bunnings/Wesfarmers – solid rental base with growth from CPI and programmed rent reviews – low level of committed capex • Maintainin
Slide 16: Capital management - debt facilities
For personal use only Capital management - debt facilities As at 30 June 10 Limit ($m) Drawn ($m)1 Expiry ANZ 100 48.8 31 Jul 2013 CBA 100 49.9 14 Jan 2012 WBC 80 45.5 2 Jul 2012 NAB 50 50.0 Evergreen 2 330 194.2 1 amount drawn includes accrued interest of $0.7 million as at 30 June 2010 2 facility
Slide 17: Capital management – interest rates
For personal use only Capital management – interest rates • $192.0m hedged (99%) at 5.94% average • 9.40% weighted average cost of net borrowings during the year after hedging and including margins and fees (2009: 6.55%) • 3.26 years weighted average maturity, including delayed starts (2009: 3.07 ye
Slide 18: Governance – structure
For personal use only Governance – structure Responsible Entity: Bunnings Property Management Limited Subsidiary of Wesfarmers Limited but…majority external directors • John Austin (Chairman): Leighton Properties (Chairman), MREEF, Ringmer Pacific (Chairman), ex Jones Lang LaSalle • Peter Mansell •
Slide 19: Governance - sustainability
For personal use only Governance - sustainability • Adopted sustainability principles based on United Nations Principles for Responsible Investment • Passive nature of BWP’s operations result in relatively minor impacts • Current focus: climate change priority, building knowledge/data, and improved
Slide 20: Outlook
For personal use only Outlook • Strong balance sheet to fund growth – organic growth through rent reviews and upgrades of existing assets – focus on acquiring quality assets that meet the Trust’s investment criteria – availability of appropriate properties will be a challenge – finance cost will con
Slide 21: Outlook - FY11 rent reviews
For personal use only Outlook - FY11 rent reviews Rent review type FY11 Market rent reviews2 First Second half half FY11 Morley, WA CPI 351 18 53 Rockingham, WA Fixed 3 5 8 Vermont South, VIC Market 4 0 4 Northland, VIC Total 42 23 66 8% of portfolio3 1 11 CPI reviews completed Q1 FY11 with average
Slide 22: Further information
For personal use only Further information Visit: www.bwptrust.com.au Responsible entity: Bunnings Property Management Limited Tel: (08) 9327 4356 Email: ggernhoefer@bwptrust.com.au The information provided in this presentation should be considered together with the financial statements for the perio
Slide 23: Appendix A: Extended lease tenure
For personal use only Appendix A: Extended lease tenure • Extended and smoothed lease expiry profile Lease expiry pre lease extensions Post Extended Lease Tenure 23
Slide 24: Appendix B: Sales evidence
For personal use only Appendix B: Sales evidence Bunnings Warehouse Sale price $m Yield % Date Rothwell QLD 16.70 7.93 Mar 09 Nerang QLD 16.35 7.60 Jun 09 Campbelltown NSW 21.35 7.66 Jun 09 Nowra NSW 11.60 7.75 Jun 09 Rockdale* NSW 25.35 8.15 Dec 09 Mill Park VIC 16.45 7.75 Apr 09 Box Hill VIC 21.50
Slide 25: Appendix C: Valuations
For personal use only Appendix C: Valuations • Process – entire portfolio revalued every 6 months – independent valuations on a 3 year cycle for each property – balance of portfolio – directors’ valuation using recognised valuation methodology – directors’ valuations methodology reviewed by an indep
Slide 26: Appendix D: Market rent reviews
For personal use only Appendix D: 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
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