Property Portfolio

Introduction

As at June 2010 the Trust's portfolio comprised 53 established Bunnings Warehouse properties, 1 Bunnings Warehouse development site, 1 Bunnings distribution centre, 4 industrial properties, and 2 bulky goods showroom.

The Trust owns properties in all mainland Australian states, with a geographic diversification as follows:

As at 30 June 2010, the weighted average period to lease expiry of the Trust's portfolio was 9.3 years.

Bunnings Warehouses

Bunnings Warehouse properties owned by the Trust are on long term leases to Bunnings Group Limited. Leases typically have an effective term of 10 to 15 years, followed by five year option periods exercisable by the tenant. Rent is programmed to escalate on an annual basis generally in line with CPI, and every five years the rents are to be reviewed to market.

Properties owned by the Trust and leased to Bunnings Group Limited typically have:

a site area of three hectares;
a Bunnings Warehouse of 7,500 square metres (indicative gross lettable area);
high visibility and easy access from major arterial roads;
ample parking;
a surrounding population with suitable socio-economic characteristics; and
other complementary outlets nearby.

The Trust owns development sites at:

Maribyrnong in Victoria on which a Bunnings Warehouse is expected to be developed in time for Bunnings Group Limited; and
Altona, Victoria, to provide for the expansion of the adjoining Bunnings Warehouse owned by the Trust.

Showrooms

The Trust has developed two showrooms on surplus land which is part of the Bunnings Warehouse property at Bayswater, Victoria. These showrooms are leased as retail outlets, one Boating Camping Fishing (BCF) and one Autobarn, both with an initial seven year term with two five year options exercisable by the tenant.

A further two showrooms have been developed on a property adjoining the Trust's Geraldton Bunnings Warehouse acquired in September 2007. One tenancy is leased to Boating Camping Fishing, a subsidiary of the ASX listed Super Cheap Auto Group and the other tenancy is leased to national auto repairer Ultratune.

Industrial properties

Three office/warehouse properties were acquired from and leased back to Wesfarmers subsidiary J Blackwood and Son Limited in 2007. Blackwoods has vacated the Canning Vale property and the remaining two properties leased to Blackwoods have initial seven year terms with two five year options exercisable by Blackwoods. At the Blacktown property Blackwoods has the right to terminate the lease but must provide 12 months notice.

The Trust acquired a multi-tenanted industrial property in Blackburn, Victoria in January 2008. The major tenants, Sleepmaster Pty Ltd and Gainsborough Industries Limited occupy 95% of the property. Both tenants have five year options following expiry of the leases in 2012.

Property values

Investment properties are carried at fair value. Fair value for individual properties is determined by a full independent valuation completed at least every three years by an independent valuer who holds a relevant professional qualification and has recent experience in the location and category of the investment property. During the six months to 30 June 2010, ten property revaluations were performed by independent valuers.

Properties that have not been independently valued as at a balance date are carried at fair value by way of Directors' valuation. The methodology and assumptions of the Directors' valuations are subject to an independent verification process by an independent valuer.