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

Status as at 31 December 2020
  • 241 hectares of land
  • 75 properties
  • 88 per cent of income from Bunnings
  • 94 per cent of non-Bunnings income from national tenants
  • 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

Status as at 31 December 2020
  • 10.5 per cent annualised portfolio return on invested capital
  • 17.8 per cent gearing
  • 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

Status as at 31 December 2020
  • 80 per cent metropolitan
  • 20 per cent regional
  • 40 per cent of metropolitan properties within 20 kms of a central business district ("CBD")
  • Well located properties in local communities, accessible, adjacent to other retail/community facilities
  • Highest and best use zoning

Drivers of returns

Annual rental growth

Status as at 31 December 2020
  • 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
  • Continue to focus on market rent review outcomes


Status as at 31 December 2020
  • No acquisition opportunities met risk adjusted return requirements during the period
  • Re-investment in existing portfolio, and acquisitions as and when it makes commercial sense to do so


Status as at 31 December 2020
  • S&P A- and Moody's A3 rating maintained
  • Bank debt facility of $135 million with Westpac Banking Corporation extended for a further year to April 2023
  • Continue to diversify funding and extend duration of debt

Long-term value creation

Pro-active management of existing properties

Status as at 31 December 2020
  • Portfolio 97.4 per cent leased
  • Two properties repositioned for large format retail
  • Three properties being repositioned for multi-tenanted industrial
  • Two properties being re-zoned for higher and better use
  • One property is being repositioned for mixed-use
  • Three properties considered for divestment
  • Continue to optimise the value of all properties in the portfolio

Portfolio growth

Status as at 31 December 2020
  • Reviewed a number of acquisition opportunities during the year, none met return hurdle requirements
  • Acquisitions as and when value can be created

Effective management of the trust and its capital

Status as at 31 December 2020
  • Ten year average total unitholder return of 16.3 per cent per annum
  • Secure and growing income stream
  • Long-term capital growth