Investment Approach

BWP Trust aims to provide unitholders with a secure and growing income stream and long-term capital growth. This is achieved through strong alignment with, and support for, the ongoing property needs of its customers, while also responding to the needs of the local communities where the Trust owns real estate.

To achieve this core purpose the responsible entity invests on behalf of the Trust according to the following strategies, objectives and investment criteria:

Investment themes

Large format retailing property ownership - Home improvement / Bunnings focus

Status1
  • 236 hectares of land
  • 73 properties
  • 85 per cent of income from Bunnings
  • 92 per cent of non-Bunnings income from national tenants
Priorities
  • Core portfolio of Bunnings Warehouse properties that meet Bunnings' business model requirements, with annual rent increases and long duration of occupancy

Sustainable portfolio returns supported by balance sheet flexibility

Status1
  • 9.8 per cent annualised portfolio return on invested capital
  • 15.5 per cent gearing
Priorities
  • Focus on long-term value creation by re-investing in and growing the core portfolio of Bunnings Warehouse properties, and from maximizing the alternative use prospects of a number of properties in the portfolio

Property location attributes

Status1
  • 79 per cent metropolitan
  • 21 per cent regional
  • 40 per cent of metropolitan properties within 20 kms of a central business district ("CBD")
Priorities
  • Well located properties in local communities, accessible, adjacent to other retail/community facilities
  • Highest and best use zoning

Drivers of returns

Annual rental growth

Status1
  • Approximately 55 per cent of the Trust's rental income is subject to ("CPI") adjustments
  • 45 per cent is subject to fixed annual adjustments, other than in years in which respective properties are due for a market rent review
Priorities
  • Continue to focus on market rent review outcomes

WELL PRICED ACQUISITIONS AND RE-INVESTMENT

Status1
  • No acquisition opportunities met risk adjusted return requirements during the period
Priorities
  • Re-investment in existing portfolio, and acquisitions as and when it makes commercial sense to do so

COST OF FUNDING

Status1
  • S&P A- and Moody's A3 rating re-affirmed
Priorities
  • Continue to diversify funding and extend duration of debt

Long-term value creation

Pro-active management of existing properties

Status1
  • Portfolio 97.6 per cent leased
  • Two properties repositioned for large format retail
  • Two properties being repositioned for mixed use
  • One property being repositioned for multi-tenanted industrial
  • One property being rezoned for mixed use
  • One properties being considered for divestment
Priorities
  • Continue to optimise the value of all properties in the portfolio

Portfolio growth

Status1
  • No acquisition opportunities met risk adjusted return requirements during period
Priorities
  • Acquisitions as and when value can be created

Effective management of the trust and its capital

Status1
  • Ten year average total unitholder return of 15.3 per cent per annum
Priorities
  • Secure and growing income stream
  • Long-term capital growth