Slide 1: Full-year results 2011
For personal use only Full-year results 2011 August 2011
Slide 2: Presentation outline
Presentation outline For personal use only > Overview Grant Gernhoefer > Results General Manager BWP Management Limited > Portfolio > Capital management Andrew Ross > Governance Portfolio Manager BWP Management Limited > Outlook
Slide 3: Overview
Overview For personal use only > Increased revenue and distributable profit from acquisitions, development and rent reviews > Full-year distribution of 11.98 cents per unit > $150m capital raising to fund acquisitions > Acquisition of 11 Bunnings Warehouse properties + agreement to buy 3 more > 100%
Slide 4: Overview – market performance
Overview – market performance For personal use only BWP unit price vs S&P/ASX 200 A-REIT index & All Ordinaries index 1 year to 30 June 2011 BWP unit price performance flat for the year 3 years to 30 June 2011 ...but longer term shows BWP outperformance Source: Reuters, rebased to 100 for periods en
Slide 5: Results - performance
Results - performance For personal use only 2010/11 Previous corresponding period Revenue $85.3 million 8.6% on pcp Net profit/(loss) including revaluations $81.5 million ($10.7) million pcp Distributable profit (excluding revaluations) $56.6 million1 12.2% on pcp Full year distribution 11.98 cpu 0.
Slide 6: Results – distributions
Results – distributions For personal use only 14 12.98 13.27 12.61 6.72 11.96 6.56 12.08 11.98 12 6.39 11.57 11.38 6.17 5.98 5.80 10.50 5.87 4.87 9.56 9.77 10 5.35 9.18 4.97 4.86 4.68 cents per unit 8 6 6.55 6.70 6.22 6.42 6.10 6.18 5.79 5.51 5.15 4.70 4.80 4 4.50 2 0 1 2 3 4 FY00 FY01 FY02 FY03 FY0
Slide 7: Results – total returns
Results – total returns For personal use only > BWP total returns compared to market – period ended 30 June 2011 Total returns include distributions and movement in price (assumes distributions are reinvested). Source: UBS 7
Slide 8: Portfolio - geographic spread
Portfolio - geographic spread 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 income (as at 30 Jun 2011) 1 15 1 SA 4% WA 18%
Slide 9: Portfolio - WALE
Portfolio - WALE For personal use only > 8.6 year weighted average lease expiry (by rental income) > Typical Bunnings Warehouse lease features: – Minimum 10 year initial term – annual CPI or 3% escalation (plus 5 year tenant options) – Wesfarmers covenant – 5 yearly market rent reviews (A- (stable)
Slide 10: Portfolio - acquisition from Bunnings
Portfolio - acquisition from Bunnings For personal use only > Geographically spread – 4 states > 10 properties settled by 30 June 2011; Dubbo settled 5 August; Craigieburn expected to settle in October and Wallsend expected to settle in March 2012 > Refer to Appendix A for detailed information on po
Slide 11: Portfolio - acquisition from third party
Portfolio – acquisition from third party For personal use only > Port Melbourne, Victoria ($24.0m purchase price, plus $1.4m acquisition costs) – 2.5 kilometres south-west of Melbourne CBD – 3.0ha site, 13,846m2 total retail area – lease commencement 17 March 2008 – 12 years + 4x5 year options – ann
Slide 12: Portfolio - acquisition and divestment
Portfolio – acquisition and divestment For personal use only > Minchinbury, NSW ($4.0m purchase price, plus $0.3m acquisition costs) – 5,186m2 vacant site adjoining existing Trust owned Bunnings Warehouse – land acquired in May 2011 for future expansion of the Bunnings Warehouse – 35 kilometres west
Slide 13: Portfolio - developments completed in FY11
Portfolio – developments completed in FY11 For personal use only > Broadmeadows, Victoria ($5.9m) – 3,824m2 expansion of the fully-enclosed covered area of the Bunnings Warehouse completed in December 2010 – incremental annual rent $0.47m – new 10 year lease with one 10 year option – annual CPI esca
Slide 14: Portfolio - pipeline
Portfolio - pipeline For personal use only > Capital committed to acquisitions & developments Property $m Acquisitions Craigieburn 18.42 Wallsend 2.50 20.92 Developments Greenacre 16.75 Harrisdale 7.90 Fyshwick 15.00 Rocklea 3.83 Scoresby 6.26 Wallsend 18.79 68.53 Total 89.45 Not including acquisiti
Slide 15: Portfolio - developments committed
Portfolio – developments committed For personal use only > Scoresby, VIC ($6.3m) > Harrisdale, WA ($7.9m) & Greenacre, NSW ($16.75m) – estimated completion January 2012 – development sites acquired from – increase in fully enclosed covered Bunnings as part of portfolio area from 8,379m2 to 10,549m2
Slide 16: Portfolio - developments committed
Portfolio – developments committed For personal use only > Fyshwick, ACT ($15.0m) > Rocklea, Qld ($3.8m) – estimated completion June 2012 – estimated completion June 2012 – redevelopment and expansion of – expansion of main trade area, existing Bunnings Warehouse onto timber drive through and new ya
Slide 17: Portfolio - other improvements
Portfolio – other improvements For personal use only > Blackburn, VIC – re-configuration works of $0.2m required for two main tenants Gainsborough Sleepmaster – new 8 year lease + one 5 year – exercised its 5 year option option commencing in April 2012 – annual fixed 4% escalation during – market re
Slide 18: Portfolio - FY11 rent reviews
Portfolio – FY11 rent reviews For personal use only Proportion of rental income Average increase 5% 8% Market 9.5%* Fixed 3.0% 3.4% like-for-like 87% CPI 2.9% rental growth * 4 properties, being Morley, Northland, Rockingham and Vermont South Like-for-like rental growth FY04 FY05 FY06 FY07 FY08 FY09
Slide 19: Portfolio - FY11 market rent reviews
Portfolio – FY11 market rent reviews For personal use only Passing rent Reviewed rent Uplift Uplift Property location Effective date ($’000) ($’000) ($’000) (%) Mile End, SA1 1,411 1,845 2 434 +30.8 22 Mar 10 Morley, WA 1,016 1,168 3 152 +15.0 3 Jul 10 Vermont South, VIC 1,959 1,959 3 - - 15 Aug 10
Slide 20: Portfolio - revaluations
Portfolio - revaluations For personal use only > June 2011 weighted average capitalisation rate 7.65% – Dec 10: 7.62% and June 10: 7.65% – net fair value increase in FY11 of $25.3m – 13% of BWP portfolio independently valued in June 2011 – independent valuations = 2bps cap rate expansion on 31 Dec 2
Slide 21: Portfolio - revaluations and new reviews
Portfolio –revaluations and new reviews For personal use only > Future Bunnings Warehouse (“BWH”) revaluations and market rent reviews FY12 FY13 FY14 FY15 FY16 BWH rent reviews 7 7 19 12 4 % of total1 11% 11% 31% 19% 6% Portfolio revaluations 24 19 26 24 19 % of total2 38% 24% 37% 38% 24% Refer Appe
Slide 22: Capital management
Capital management For personal use only > Balance sheet strength supported by: – low gearing - 17.0% at 30 June 11 (17.1% covenant gearing) – strong lease covenant in Bunnings/Wesfarmers – solid rental base with growth from CPI and programmed rent reviews – low level of committed capex > Maintainin
Slide 23: Capital management – debt facilities
Capital management – debt facilities For personal use only As at 30 June 11 Limit ($m) Drawn ($m)1 Expiry ANZ 100 36.9 31 Jul 2013 CBA 100 49.9 14 Jan 2014 WBC 80 75.0 2 Nov 2013 NAB 50 50.0 31 Mar 2014 330 211.8 1 amount drawn includes accrued interest of $1.0 million as at 30 June 2011 > Interest
Slide 24: Capital management – interest rate hedging
Capital management – interest rate hedging For personal use only > $180.0m hedged (85%) at 5.77% weighted average1 > 3.34 years weighted average maturity, including delayed starts (2010: 3.26 years) Hedge book profile by half-year ending: Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Active swaps
Slide 25: Capital management – borrowing costs
Capital management – borrowing costs For personal use only > Net borrowing costs for the full year (incl. fees and margins): – $17.9m (down 3.8% on June 10) – average borrowings $194.2m (2010: $198.2m) – 9.2% of borrowings after hedging (June 10: 9.4%) > Effective rate of borrowings (9.2%) impacted
Slide 26: Governance – structure
Governance – structure For personal use only Responsible Entity: BWP Management Limited Subsidiary of Wesfarmers Limited but all external directors > John Austin (Chairman): Leighton Properties (Chairman), MREEF, Ringmer Pacific (Chairman), ex Jones Lang LaSalle, ex National Industrial Property Trus
Slide 27: Governance - sustainability
Governance - sustainability For personal use only > Sustainability principles based on United Nations Principles for Responsible Investment > Passive nature of BWP’s operations result in relatively minor impacts > Current focus on climate change priority, building knowledge/data, and improved report
Slide 28: Outlook
Outlook For personal use only Positive signs for growth: > Existing portfolio – 7 market rent reviews of Bunnings Warehouses for 2011/12 – 89% of rental income in 2011/12 based on CPI/fixed escalation – tenant driven upgrades (Rocklea $3.8m, Scoresby $6.3m and Fyshwick $15.0m) > Acquisitions – yield
Slide 29: Outlook – FY12 rent reviews
Outlook – FY12 rent reviews For personal use only > Rent review type FY12 Market rent reviews % of Coffs Harbour, NSW First Second rental half half income2 Geraldton, WA CPI 321 19 73% Midland, WA Mindarie, WA Fixed 3 14 16% Croydon, VIC Market 6 2 11% Frankston, VIC Total 41 35 100% Oakleigh South,
Slide 30: Masters hardware and home improvement
Masters hardware and home improvement For personal use only Assessment of impact on hardware industry and property market purely speculative at this stage Potential positives for BWP > Reinforces the success of the big-box hardware format > Creates competitive market for properties – land values and
Slide 31: Further information
Further information For personal use only >Responsible entity: >www.bwptrust.com.au >BWP 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 period and previous p
Slide 32: Appendix A: Portfolio – acquisition of properties from Bunnings
Appendix A: Portfolio – acquisition of 13 properties from Bunnings For personal use only Approximate Estimated Gross lettable Initial net Initial yield Purchase price State Property Status Land area settlement / area1 (m2) rent ($000) (%) ($000) (ha) completion date NSW Dubbo2,3 Operational 4.5 10,0
Slide 33: Appendix B: Valuations
Appendix B: Valuations For personal use only > 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 34: Appendix C: Market rent reviews
Appendix C: Market rent reviews For personal use only > 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