BWP GROUP — Annual Report 2004

Aug 26, 2004

27 August 2004

2004 Annual Report

Bunnings Property Management Limited, the responsible entity for the Bunnings Warehouse Property Trust wishes to advise that the 2004 Annual Report will be mailed today to Unitholders who have elected to receive an Annual Report.

A copy of the 2004 Annual Report is attached to this announcement and will also be available on the Trust's website at www.bunningspropertytrust.com.au

ANTHONY NIARDONE Company Secretary

. . . . . . . . . . . . . . . . . . . .

11

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properties
and Still growing

In 2004 the Trust continued its long term strategy of acquiring quality properties suitable for a Bunnings Warehouse. At year end, the Trust owned 45 established Bunnings Warehouse properties and two distribution centres, had a Bunnings Warehouse store under construction, and owned two sites upon which Bunnings Warehouses are likely to be developed in the future.

Bunnings Warehouse Property Trust
ABSN 039-581-097 Responsible Entity Bunnings Property Management Limited
Bunnings Property Management Limited
ABN 26 082 656 424 Australian Financial Services Lícence
No. 247830

Contents

Performance summary	4
2004 highlights	5
Letter from the Chairman	7
Manager's report	8
Investment approach	12
Property portfolio	14
Directors and senior management	15
Corporate governance	16
Investor information	18
Financial statements	19
Directorv

Growth in earnings this year was significant, and the value of the portfolio was enhanced by acquisitions, developments and revaluations. The Trust continues to provide unitholders with a secure income stream and capital growth from its participation in the expansion of the Bunnings Warehouse chain. We are committed to building on the solid foundation that is now in place and to continue to deliver strong performance for unitholders.

Financial performance

Year ended 30 June			04	03	-02	01	-00
Total income		Sm	44.5	35.9	29.0	23.1	18.6
Operating profit		Sm	32.2	26.3	21.1	16.5	13.9
Distribution per ordinary unit	interim	cents	5.51	5.15	4.80	4.50	4.70
	final	cents	5.87	5.35	4.97	4.68	4.86
	total	cents	11.38	10.50	9.77	9.18	9.56
Tax advantaged component		%	26.83	30.15	34.68	40.86	54.73
Total assets		Sm	575.3	471.6	348.7	288.0	244.1
Borrowings		Sm	155.2	149.3	80.7	92.7	63.1
Unitholders' equity		Sm	395.3	302.6	255.1	185.9	173.2
Gearing (debt to total assets)		92	27.0	31.7	23.1	32.2	25.9
Number of units on issue		m	295	266	232	182	177
Number of unitholders			11,544	10,496	9.988	9,292	9.070
Net tangible asset backing per unit		S	1.34	1.14	1.10	1.02	0.98
Unit price at 30 June		g.	1.57	1.51	1.28	1.15	0.98
Management expense ratio (annualised)			0.75	0.71	0.76	0.79	0.37

Distribution

BWP closing unit price

BWP total return

2004 highlights:

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Purchase of a development site, and development of 3 Bunnings Warehouse stores and a distribution centre for Bunnings

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A 14.6 per cent average rental uplift from the market rent review of 20 Trust properties

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An increase in net tangible asset backing per unit from \$1.14 to \$1.34

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Being awarded first place in the 2004 BDO Listed Property Trust Survey --Investment Category

Sering National Sering The 2004 armst report

Borvings Warehouse Property Trust 2004 answall report

significant growth in éarnings and the size of the portfolio over the past year

An underwritten unit purchase plan, which was implemented for the first time by the Trust, successfully raised \$25 million. These proceeds were used to fund developments and repay debt, it was pleasing to note the strong level of participation in the plan by unitholders.

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During the year the Trust was awarded first place in the 2004 BDO Listed Property Trust Survey - Investment Category. This award acknowledges the relatively high total returns that have been provided to unitholders by the Trust in recent years.

The ongoing rollout of the hardware business of Bunnings Pty Ltd. is expected to provide the Trust with investment opportunities. The Trust will continue to actively pursue the purchase of properties leased to Bunnings Pty Ltd which meet the Trust's investment criteria.

I encourage you to read the Manager's report which includes details of the Trust's performance and comments on prospects.

The board wishes to record its appreciation of the valuable contribution made by management throughout the year.

I would also like to record the valuable contribution made by Mr Paul Gardiner, the company secretary of Bunnings Property Management Limited since the establishment of the Trust in 1998, who was replaced by Mr Anthony Niardone in February 2004.

Thank you for your continued support of the Bunnings Warehouse Property Trust. I look forward to reporting favourably again to you next year.

Yours sincerely

W H Cairns Chairman Bunnings Property Management Limited

Dear Unitholder,

On behalf of the board, I am pleased to present the 2004 Annual Report of the Bunnings Warehouse Property Trust.

It was an active year for the Trust in terms of acquisitions and developments, market rent reviews

and property revaluations. The growth in earnings was significant.

As a result of acquisitions made during the year, the Trust portfolio now comprises 50 properties, a healthy increase on the 20 properties owned by the Trust when it was listed in September 1998. Our activity during the year included the completion of four property developments and the ongoing development of another property. The acquisitions and developments, which are all considered likely to result in income growth and capital appreciation over time, have enhanced the geographic diversification of the Trust's portfolio and maintained the average lease expiry of the portfolio.

Overall, results from the 20 market rent reviews completed during the year resulted in an average 14.6 per cent rental uplift.

During the year a further 24 properties in the Trust's portfolio were revalued by independent valuers. These revaluations resulted in the market value of those properties exceeding their book value by 20.8 per cent. They also contributed to an increase in the net tangible asset backing per unit, which at 30 June 2004 was \$1.34 per unit (last year \$1.14 per unit).

it has been another strong performance by the Trust this year, and there are indications of continued growth in
2004/05

Financial results

The Trust reported an operating profit of \$32.2 million for the year, which represents an increase of 22.4 per cent on the profit of \$26.3 million earned last year.

This profit was earned on revenue of \$44.5 million, up by 23.8 per cent from \$35.9 million last year

due to additional income received from new properties, programmed rental escalations, and 20 market rent reviews.

Total assets of the Trust at year end were \$575.3 million, up by \$103.7 million on last year.

Final distribution

A final distribution of 5.87 cents per unit has been declared. The final distribution will be made on 27 August 2004 to unitholders on the Trust's register as at 5 pm on 30 June 2004.

This lifts the total distribution for the 2003/04 year to 11.38 cents per unit, an 8.4 per cent increase on last year's distribution of 10.50 cents per unit.

The tax advantaged component for the 2003/04 distribution is 26.83 per cent.

Market performance

During the financial year, units in the Trust traded within a range of \$1.42 to \$1.67. Based on the closing price as at 30 June 2004 of \$1.57, the Trust had a market capitalisation of \$463 million.

In the 2003/04 financial year, the Trust provided a total return of 11.8 per cent, compared with the ASX 200 Property Trust Accumulation Index return of 17.2 per cent. The Trust, which has provided an average total return of 19.6 per cent per annum over the last three years, continues to provide good returns to unitholders.

Market rent reviews

During the year, 20 market rent reviews were completed, which resulted in an average 14.6 per cent uplift in the passing rent of the properties. These were the first market reviews conducted on Trust properties, which all have leases which call for reviews on the fifth anniversary of the lease commencement date.

The rental reviews on properties at Burleigh Heads, Southport and Underwood in Queensland were negotiated with the tenant, Bunnings Pty Ltd, and the results were consistent with independent advice obtained by Bunnings Property Management Limited. The remaining 17 market rent reviews completed this year were determined by independent valuers appointed by the Trust and Bunnings Pty Ltd.

A summary of the market rent reviews is tabled overleaf.

Revaluations

During the year, 24 property revaluations were completed. Four of the revaluations, at Frankston, Maribyrnong, Oakleigh South in Victoria and Midland in Western Australia, were completed on properties acquired by the Trust in 2001. The remaining 20 revaluations were completed on properties that underwent market rent reviews during the year.

The valuations of these properties by independent valuers represent an increase in the book value of 20.8 per cent, and contributed to an increase in the underlying net tangible asset backing of the Trust's units from \$1.14 per unit at 30 June 2003 to \$1.34 per unit at 30 June 2004.

A summary of the revaluations is tabled overleaf.

Gearing

The responsible entity has established a preferred range of 20 to 40 per cent for the Trust's gearing ratio (debt to total assets).

The quality of the Trust's lease covenants and the lease expiry profile support this gearing range and allow the effective use of debt funding.

At 30 June 2004, the Trust's gearing was 27.0 per cent, which is within the Trust's preferred range and is consistent with the gearing level of the majority of listed property trusts.

Interest rate management

The Trust has a policy of hedging the majority of its borrowings against interest rate movements to ensure stability of distributions.

The responsible entity continues to actively manage the Trust's exposure to interest rates and took additional cover during the year to meet the Trust's debt related commitments.

At 30 June 2004, 95 per cent of the Trust's interest bearing debt was hedged at a weighted average rate excluding margins of 5.75 per cent.

Funding

The Trust currently has a \$175 million debt facility with the National Australia Bank.

The responsible entity continues to consider the best options for funding future acquisitions.

Capital raising

During the year, the Trust issued 18.2 million units by way of an underwritten unit purchase plan to retail and institutional investors at an issue price of \$1.37. More than 39 per cent of unitholders participated in the unit purchase plan.

The \$25.0 million in capital raised was applied to reduce debt and fund property developments.

Property acquisitions and developments

During the financial year, the Trust acquired two properties and the portfolio at year end comprised 50 properties.

The acquisition of an established Bunnings Warehouse property, which was formerly a BBC Hardwarehouse, from a subsidiary of Wesfarmers was made at Lismore, in New South Wales. The Trust now owns six ex BBC Hardwarehouse properties, with five purchased from subsidiaries of Wesfarmers Limited and the other from a third party.

The Trust acquired a development site at Maitland in the Hunter Valley region of New South Wales. Development of a Bunnings Warehouse on the site commenced in October and completion is scheduled by September 2004.

Bunnings Warehouse stores were developed on sites owned by the Trust at Rocklea in Brisbane, Port Macquarie in New South Wales, and Bayswater in Melbourne, and a distribution centre was developed for Bunnings at Hemmant, in Brisbane.

Capital expenditure on acquisitions and developments during the year was \$52.2 million.

The acquisitions and developments have enhanced the geographic diversification of the Trust's portfolio and maintained the average lease expiry profile, which at year end was 10.8 years. All property acquisitions and developments are considered to have potential for rental growth and capital appreciation.

During the year the Trust disposed of one hectare of surplus land at the Oakleigh South property in Melbourne. The disposal was in accordance with the agreement between the Trust and Bunnings for purchase and development of the property, with proceeds to the Trust of \$1.25 million.

Market rent reviews completed during 2003/04

Property	Passing rent \$000 pa	Market review \$000 pa	Uplift %	Effective date
Altona, vic	722	866	19.9	24 Sep 03
Balcatta, wa	1.111	1.305	17.5	25 Sep 03
Broadmeadows, vic	722	859	19.O	24 Sep 03
Burleigh Heads, QLD	1.017	1.113	9.5	22 Oct 03
Cannon Hill, œ.p	946	1.125	18.9	18 Mar 04
Croydon, vic	778	870	11.9	24 Sep 03
Epping, vic	783	916	17.0	12 Mar 04
Fountain Gate, vic	833	965	15.8	24 Sep 03
Joondalup, wA	805	906	12.5	25 Sep 03
Mandurah, wa	711	765	7.6	2 Dec 03
Mentone, vic	944	990	4.9	24 Sep 03
Minchinbury, NSW	955	1.256	31.6	31 Dec 03
Northland, vic	861	1.030	19.6	24 Sep 03
Nunawading, v:c	1.222	1.400	14.6	24 Sep 03
Sandown, vic	778	815	4.8	24 Sep 03
Scoresby, vic	833	1.000	20.O	24 Sep 03
Southport, oup	1.009	1.103	9.3	10 Nov 03
Sunshine, vic	722	736	1.9	24 Sep 03
Tuggeranong, ACT	842	1.070	27.O	1 Dec 03
Underwood, aup	952	1.023	7.4	22 Oct 03
Total	17.546	20.113	14.6

Revaluations completed during 2003/04

Property	Book valuet.	Current market value	Change	Current valuation vieldi
	\$000	SOOO	$\frac{3\pi}{26}$	莐
Altona, vic	8.200	10.250	25.0	8.50
Balcatta, wa	11,700	15,500	32.5	8.50
Broadmeadows, vic	8.450	10,700	26.6	8.00
Burleigh Heads, QLD	10.200	12,350	21.1	8.50
Cannon Hill, œ.p	9,400	12,600	34.0	8.50
Croydon, vic	9.200	10,500	14.1	8.25
Epping, vic	9.500	11.400	20.0	8.00
Fountain Gate, vic	10,500	12,100	15.2	8.00
Frankston, vic	16.994	20,000	17.7	8.00
Joondalup, wx	8.300	10,800	30.1	8.50
Mandurah, wa	7,350	9,100	23.8	8.50
Maribymong, vic	7.562	8,000	5.8	n/ai
Mentone, vic	12.100	12,400	2.5	8.00
Midland, wa	9,784	11,900	21.6	8.50
Minchinbury, NSW	10.000	15,750	57.5	8.00
Northland, vic	10.900	13,400	22.9	7.75
Nunawading, wc	16,395	18,100	10.4	7.75
Oakleigh South, vic	16,163	19,000	17.6	8.00
Sandown, vic	9.400	9,900	5.3	8.25
Scoresby, vic	10,200	11,800	15.7	8.50
Southport, oup	10,200	12,350	21.1	8.50
Sunshine, vic	8.450	8,900	5.3	8.25
Tuggeranong, Act	8,600 9.400	12,610	46.6 20.2	8.50 8.50
Underwood, aup		11,300
Total	248,948 300,710		20.8

book value (purchase price plus acquisition costs) prior to revaluation. yield applied by the valuer to the market rental ^\$Maribyrnong is a development site

A summary of property acquisitions during the financial year and recent developments is presented below.

Maitland, New South Wales

In August 2003, the Trust acquired a 3.1 hectare development site at Maitfand for a purchase price of \$0.9 million. Maitland, a regional city located in the Hunter Valley region, is approximately 32 kilometres west of Newcastle and 200 kilometres north of Sydney. The site is prominently located on the New England Highway, approximately three kilometres west of the main business district.

A Bunnings Warehouse with a total retail area of approximately 12,500 square metres is scheduled to be opened on the site by September 2004 at a cost to the Trust of \$9.8 million.

Bunnings Pty Ltd will lease the completed property at an annual rental of \$961,650. Lease terms will be similar to those of other leases in the Trust's portfolio, except that market rent reviews shall not be lower than \$900,000 per annum, rather than the commencement rent.

Rocklea, Queensland

In October 2002, the Trust acquired a 3.2 hectare property at Rocklea for a purchase price of \$6.2 million. The property is prominently located near the Granard Street off-ramp of the Ipswich motorway, approximately 14 kilometres west of the Brisbane central business district.

The Trust completed the development of a Bunnings Warehouse with a total retail area of approximately 12,500 square metres on the site in October 2003 at a cost to the Trust of \$7.5 million.

Bunnings Pty Ltd leases the property, on terms similar to those of other leases in the Trust's portfolio, at an annual rental of \$1,267,000. Queensland land tax on the property must be paid from the rental.

Port Macquarie, New South Wales

In November 2002, the Trust acquired a 2.0 hectare site at Port Macquarie for a purchase price of \$2.1 million. The property is prominently located on the corner of Lake Road and Fernhill Road, approximately 3.5 kilometres south of the main business district.

The Trust completed the development of a Bunnings Warehouse with a total retail area of approximately 9,000 square metres on the site in November 2003 at a cost to the Trust of \$5.4 million.

Bunnings Pty Ltd leases the property, on terms similar to those of other leases in the Trust's portfolio, at an annual rental of \$680,000.

Hemmant, Queensland

In May 2003, the Trust purchased a 3.5 hectare property at Hemmant for a purchase price of \$3.0 million. The property is well located in the Brisbane Port industrial precinct, approximately 12 kilometres east of the Brisbane central business district.

The Trust completed the development of an 18,000 square metre distribution centre, as well as 250 square metres of office space, on the site in November 2003 at a cost to the Trust of \$10.2 million.

Bunnings Pty Ltd leases the property at an annual rental of \$1,164,500. Queensland land tax on the property must be paid from the rental. The lease has a term of five years, and four subsequent lease renewal options of five years each.

The responsible entity is able to exercise the first of the options. All other terms and conditions are consistent with those for other leases in the Trust's portfolio.

Bayswater, Victoria

In February 2003, the Trust acquired a 4.9 hectare development site at Bayswater for a purchase price of \$7.3 million. The property is prominently located on Canterbury Road, approximately 30 kilometres east of the Melbourne central business district.

In April 2004 the Trust paid Bunnings Pty Ltd \$11.3 million for a Bunnings Warehouse with a total retail area of approximately 15,000 square metres. The purchase includes 8,200 square metres of surplus land with a market value of \$1.8 million. The Trust is to retain and develop the surplus land.

Bunnings Pty Ltd has entered into a ten year lease with the Trust at an annual rental of \$1,345,500, with four subsequent lease renewal options of five years each. At market review, the rent may be no greater than 115 per cent nor less than 85 per cent of the rent in the preceding year, though at no stage may the rent be lower than the commencement rent. Bunnings Pty Ltd has the option to purchase the property at the expiry of the lease term should the responsible entity and Bunnings Pty Ltd cease to be related entities. Land tax paid by Bunnings Pty Ltd is calculated on the basis that Bayswater is the only property owned by the Trust in Victoria. All other terms and conditions are consistent with those for other leases in the Trust's portfolio.

Lismore, New South Wales

In April 2004, the Trust acquired an established Bunnings Warehouse property at Lismore from BBC Hardware Properties (NSW) Pty Ltd, a subsidiary of Wesfarmers Limited. Lismore is located approximately 860 kilometres north of Sydney, and approximately 250 kilometres south of Brisbane. The property was developed in 2001 and is located on the eastern side of the Bruxner Highway in an established industrial area.

The property comprises a Bunnings Warehouse with a total retail area of approximately 10,000 square metres and was acquired at a price of \$7.8 million.

Bunnings Pty Ltd leases the property at an annual rental of \$663,300. The lease has a term of five years with four subsequent lease renewal options of five years each. The responsible entity is able to exercise the first of the options. At market review, the rent may be no greater than 120 per cent nor less than 80 per cent of the rent in the preceding year, though at no stage may the rent be lower than the commencement rent. All other terms and conditions are consistent with those for other leases in the Trust's portfolio.

outlook current expectations are for continued growth in the 2004/05 financial year

Growth opportunities for the Trust are expected from the ongoing rollout of the Bunnings Warehouse chain in Australia, and the rollout of Bunnings Warehouse stores in New Zealand. As at 30 June 2004 Bunnings Pty Ltd operated from 125 Bunnings Warehouse stores across Australia and New Zealand and planned to develop some 8 to 12 stores per annum in the future. The Trust will consider any proposal made by Bunnings Pty Ltd in relation to these properties. Furthermore, the Trust will continue to actively pursue the acquisition of Bunnings Warehouse properties from Wesfarmers Limited and other parties.

The operating revenue of Bunnings Pty Ltd has continued to increase strongly through growth in sales from existing and from new stores. For the year to 30 June 2004, revenue of \$3.8 billion was reported, which represented a 10.7 per cent increase on the previous corresponding period. Sales from Bunnings Warehouse stores continue to be the major source of operating revenue for Bunnings Pty Ltd.

Given the age of many of the properties owned by the Trust, a programme of building condition surveys by independent experts will be instigated during the year. Results from the programme will detail the respective obligations of the Trust and Bunnings Pty Ltd, as defined under the property leases, of any building repair works required.

Your directors are budgeting for continued growth in revenue and earnings in the 2004/05 financial year as a result of more properties being added to the Trust's portfolio, programmed rental escalation on all properties, and market rent reviews that are scheduled for seven properties We look forward to your continued support of the Bunnings Warehouse Property Trust.

Antikes Hopkins General Manager Sultings Ploperty Warriser and Limited III. The Trust is focused on warehouse retailing properties and, in particular, Bunnings Warehouse properties tenanted by Bunnings Pty Ltd, a wholly owned subsidiary of Wesfarmers Limited. The responsible entity has established the following objectives and strategies for the Trust:

objectives:

s de la construcción de la construcción de la construcción de la construcción de la construcción de la constru

r ve representa a volta da la casa de la casa de la casa de la casa de la casa de la casa de la casa de la cas

strategies:

a na katalog na katika katika na katika na katika na matu na katika na katika na katika na katalog na katika n sang di pangang panggunang panggunang panggunang panggunang panggunang panggunang panggunang panggunang panggu
Kalimat panggunan panggunang panggunan panggunan panggunan panggunan panggunan panggunan panggunan panggunang

N FRIDA DA LA SURFACIO DE LA REGIONALIZACIÓN DE LA SURFACIO DE LA CONSTITUCIÓN DE LA CONTRACTO DE LA REGIONALI

O JOJE PORTUGINARU DRUGI KALENDARI GRUPA DA DA BIRGI KORRE DA DI BIRGI KOMA DA BIRGI DA BIRGI DA BIRGI DA BIRG

The temport

Burnings Pty Ltd is a hardware retailing business that operates a total of 125 Bunnings Warenouse stores across Australia eind New Zealand. Submings is one of Australia's leading retailers of Kome and gerden improvement products and building materials. For the year ended 30 June 2004 Bunnings achieved

• * reverse of \$3.8 billion (att 10.7 per cent)
• Camings tellore goodwill amortisation of \$392.1 million up 12.3 per cent)

The stes

• · visible and accessible from a major road, highway or heaviny
• · ready vehicle access and angle oustomer parking.
• · similicant catchment area
• · average size three hectares

The scores

• * standardised design format
• · competitive construction costs
• · Indicable aze 12 500 square metres total tetal area

property portfolio: 147ha land area 577,440 sqm total retail area \$46 million annual rental 50 properties

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W H Cairns Dip Agr, FAPI (Val&Econ) (Chairman, Non-executive/Independent) Age 74

Joined the board in 1998. Bill retired from the AMP Society in 1990 where he was employed for 39 years. At the time of his retirement, Bill held the position of General Manager AMP Investments where he was responsible for managing the group's global investments. He is a member of the board of Avatar Industries Limited and a number of private companies, and was formerly a director of General Property Trust Management Limited. Bill is a Fellow of The Australian Property Institute and a Life Fellow of the Property Council of Australia.

P. J. Mansell, B.Com, LLB, H.Dip Tax. (Director, Non-executive/independent) Age 57.

Joined the board in 1998. Peter practised as a commercial lawyer for nearly 34 years until he retired as a partner in Freehills earlier this year. Over the years as a solicitor he has advised extensively on a number of wide-ranging corporate transactions. Peter is the Chairman of Zinifex Ltd and JDV Ltd, and a director of West Australian Newspapers Holdings Ltd, Foodland Associated Ltd and other unlisted companies. He is the immediate past President of the Council of the Australian Institute of Company Directors, Western Australian Division, having sat on the national board of the Australian Institute of Company Directors Ltd in 2002 and 2003.

R W McCuaig Francs (Director, Non-executive/Independent) Age 66

Joined the board in 1998. Robert is currently Chairman of the Advisory Board of Colliers International Property Consultants. He established its Sydney office as McCuaig & Collier in 1967. He is Chairman of Principal America Office Trust's responsible entity, a director of Multiplex Investments Pty Ltd, a director of St Vincents & Mater Health Sydney and Chairman of its Property Committee and a member of the Salvation Army Advisory Board (Eastern Division).

G T Tilbrook B.sc, MBA (Director, Non-executive/Non-independent) Age 53

Joined the board in 2001. Gene holds Bachelor of Science and Master of Business Administration degrees and a Diploma in Computing Science, from the University of Western Australia. He completed the Advanced Management Program at the Harvard University Business School in 1998. Gene joined Wesfarmers in 1985 and has held a number of commercial positions in the Business Development Department, which he currently heads, and at Wesfarmers Energy. He previously worked in corporate finance and in systems engineering. Gene is Executive Director, Business Development of Wesfarmers, a director of a number of Wesfarmers group subsidiaries, as well as a director of Gresham Partners Holdings Limited and Australian Railroad Group Pty Ltd.

A J Hopkins B.E., MBA (General Manager) Age 40

Manager since April 2002. Andrew has worked on the evaluation of a variety of commercial opportunities for the Wesfarmers group of companies since 1994. Prior to joining the Wesfarmers group, Andrew worked in the building and construction industry in Australia and the United Kingdom. He is a director of the Clontarf Football Academy.

Corporate governance

Set out below is a summary of the main corporate governance practices of the responsible entity. These practices were in effect during the whole of the financial year ended 30 June 2004, unless stated otherwise.

The ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations (ASX Principles), in conjunction with the ASX Listing Rules, require certain companies and trusts to disclose in their annual reports the extent to which their corporate governance practices follow the ASX Principles.

The responsible entity complies with the majority of the ASX Principles. Where it does not, it is largely in respect of obligations to disclose material or matters where the nature of regulation of listed trusts or of the Trust's business is such that the board of the responsible entity considers that there has been no detriment to the unitholders of the Trust from non-compliance. Areas of non-compliance and the reasons for non-compliance are noted in this statement.

Relationship between the responsible entity and Wesfarmers Limited

The responsible entity is a wholly owned subsidiary of Wesfarmers Limited (Wesfarmers). During the year 100 per cent of the property income of the Trust was received from Bunnings Pty Ltd, also a wholly owned subsidiary of Wesfarmers. The Trust also purchased property from Wesfarmers, and utilised Bunnings Pty Ltd as project manager on a number of property developments. Wesfarmers is a substantial unitholder in the Trust, and details of Wesfarmers unitholding can be found on page 35 of this report.

Roles of the board and management

The respective roles and responsibilities of the board and management are set out in the compliance plan.

The role of the board of the responsible entity is to ensure that the Trust is managed in a manner which protects and enhances the interests of its unitholders and takes into account the interests of officers of the responsible entity, customers, suppliers, lenders and the wider community.

The board has overall responsibility for corporate governance, including setting strategic direction for the Trust, establishing goals for management and monitoring the achievement of these goals. This entails:

• adopting annual operating budgets for the Trust and monitoring progress against budgets;
• · monitoring and overseeing the Trust's financial position;
• · determining that satisfactory arrangements are in place for auditing the Trust's financial affairs;
• · ensuring that appropriate policies and compliance systems are in place, and that the responsible entity and its officers act legally, ethically and responsibly on all matters; and
• complying with the statutory duties and obligations as imposed by the Law.

The board has delegated responsibility for the day to day management of the Trust to the manager.

The separation of responsibilities between the board and management is clearly understood and respected.

Board structure

The board is currently comprised of four non-executive directors including the Chairman. Details of directors in office at the date of this report, including their status as executive, non-executive or independent directors are set out on page 15 of this report.

Director independence

A majority of directors of the responsible entity are independent.

The board's assessment of the independence of each of the directors is included as part of the directors' details on page 15 of this report.

In accordance with criteria adopted in June 2004, the board considers that a director is independent if the director is a non-executive director and:

• is not a substantial unitholder of the Trust or an officer of, or otherwise associated directly with, a substantial unitholder of the Trust;
• . has not, within the last three years, been employed in an executive capacity by the responsible entity or been employed or engaged as a director of a related body corporate of the responsible entity:
• . has not, within the last three years, been a principal of a professional adviser to the Trust, the responsible entity or a related body corporate of the responsible entity where the adviser's revenues derived from these entities exceeds five per cent of the adviser's total revenues from all sources;
• · is not an officer of or otherwise associated directly or indirectly with a material supplier, where total revenues derived by that supplier from the Trust, the responsible entity or a related body corporate of the responsible entity exceeds five per cent of that supplier's total revenues;
• . has no material contractual relationship with the Trust, the responsible entity or a related body corporate of the responsible entity other than as a director of the responsible entity, where "material contractual relationship" is a relationship which could, or could be reasonably perceived to, materially interfere with the director's ability to act in the best interests of the Trust;
• . has not served on the board of the responsible entity for a period which could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the Trust;
• is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the Trust.

Selection and appointment of directors

The responsible entity has recognised the importance of having a balanced board comprised of directors with an appropriate range of backgrounds, skills and experience. In considering potential candidates for appointment to the board, the responsible entity considers the following factors, which were adopted in June 2004:

• the qualifications, expertise and experience of the person which are relevant to the role of director of the responsible entity;

• . the extent to which the qualifications, expertise and experience of the person complement the qualifications, expertise and experience of incumbent directors;
• . the professional and personal reputation of the person; and
• · any person nominated as an executive director must be of sufficient stature and security of employment to express independent views on any matter.

All non-executive directors are expected to voluntarily review their membership of the board from time-to-time taking into account length of service, age, qualifications and expertise relevant to the responsible entity's then current policy and programme, together with the other criteria considered desirable for composition of a balanced board and the overall interests of the responsible entity and the Trust.

The board considers that the establishment of a nominations committee is unnecessary given that:

• . the board consists of only four directors and is therefore not of a size sufficient to justify the formation of a board sub-committee for this task:
• . the board's adoption of the independence standards set out above, combined with the factors considered by the board in assessing potential candidates for director of the responsible entity, ensure that the nomination and selection process for directors is transparent and that appointees to the board have the requisite qualifications, experience and expertise in the market.

Given that there is not a nominations committee, the responsible entity does not comply with Recommendation 2.3 of the ASX Principles.

Independent professional advice

After prior approval of the Chairman, directors may obtain independent professional advice at the expense of the responsible entity on matters arising in the course of their board duties.

Trading in units

Directors may only buy or sell the Trust's units after reference to the secretary of the responsible entity and in accordance with the responsible entity's Unit Trading Policy, a copy of which is available on the Trust's website.

Audit and risk committee

The compliance plan entrenches processes for reporting and audit purposes.

The board formally constituted an Audit and Risk Committee in June 2003. A copy of the Audit and Risk Committee Charter is available on the Trust's website.

The Audit and Risk Committee consists of the entire board and during the year the committee was chaired by Mr R W McCuaig, an independent director of the responsible entity. During the year the committee held two meetings attended by all directors, other than Mr McCuaig who attended one meeting.

Risk control and compliance

As a registered managed investment scheme, the responsible entity has a compliance plan that has been lodged with the Australian Securities and Investments Commission (ASIC). Operation of the Trust in accordance with the compliance plan ensures that the rights and interests of unitholders are protected and that business risks are identified and properly managed.

Copies of the compliance plan are available through ASIC.

In particular, the compliance plan establishes processes for:

• · identifying and reporting breaches or non-compliance with the Corporations Act, the compliance plan, the constitution of the Trust and the responsible entity's Australian Financial Services Licence:
• complying with the ASX Listing Rules;
• protecting Trust property;
• ensuring proper acquisition and disposal practices are followed in regard to Trust property;
• · ensuring the timely collection of Trust income;
• completing regular valuations of Trust property;
• the maintenance of financial and other records to facilitate preparation of audited/reviewed financial reports;
• ensuring proper and timely distributions to unitholders;
• complying with the Trust's investment objectives;
• · managing investment risk;
• · managing potential conflicts of interest among the various related parties of the Trust;
• · holding and maintaining adequate insurance cover;
• ensuring that borrowing occurs only within permitted limits and ensuring that borrowing terms are complied with; and
• handling of complaints relating to the Trust.

Ernst & Young, the external auditor of the compliance plan, has completed its annual audit for the year ended 30 June 2004. No material breaches of the plan were identified as a result of this audit.

The Audit and Risk Committee is also responsible for assisting the board in overseeing the Trust's risk management systems. The committee is responsible for reviewing the effectiveness of those systems and recommending improvements to them.

In addition to the compliance plan, the responsible entity has in place a number of risk management controls which include the following:

• guidelines and limits for the approval of capital and operating expenditure:
• policies and procedures for the management of financial risk, including exposure to financial instruments and movement in interests rates; and
• an insurance and risk management programme.

As the majority of members of the board are external directors, the board does not consider it is currently necessary to form a separate compliance committee in addition to the board of the responsible entity.

Review of board and committee performance

In June 2004 the performance of the Board and Audit and Risk Committee was evaluated through feedback obtained from the completion of qualitative and quantitative surveys by the directors.

Remuneration policies

The right of the responsible entity to be remunerated and indemnified by the Trust is set out in the constitution of the Trust and summarised in Note 2 to the Financial Statements in this report. The constitution is available from ASIC and is available to unitholders on request.

INVESTOR INFORMATION

Remuneration of directors and executives

Remuneration expenses of the responsible entity are not borne by the Trust. Directors are remunerated by the responsible entity and all executives are employed by Wesfarmers and seconded to the responsible entity.

For the financial year ended 30 June 2004, each director was entitled to a director's fee. Directors do not receive option or bonus payments, nor do they receive retirement benefits in connection with their directorships other than statutory superannuation. There are no equity incentive schemes in relation to the Trust.

Remuneration committee

The board considers that the establishment of a remuneration committee is not necessary given that:

• the board consists of only four directors and is therefore not of a size sufficient to justify the formation of a separate remuneration committee;
• the responsible entity's fee is prescribed in the constitution of the Trust and any change to that fee would require the approval of unitholders; and
• as directors and officers of the responsible entity are not remunerated by the Trust, unitholders have no direct exposure to those remuneration expenses.

Given that there is not a remuneration committee, the responsible entity does not comply with Recommendation 9.2 of the ASX Principles.

Ethics and conduct

The responsible entity has adopted a basic code of conduct which sets out minimum acceptable standards of behaviour to ensure that dealings are conducted with integrity and honesty, and that the highest standards of corporate behaviour and accountability are maintained.

In addition, the board has adopted the principals outlined in the booklet "Corporate Practices and Conduct - Third Edition" - a guide produced by a working group comprising representatives of a number of Australian industry and professional organisations.

Investor information

Stock exchange listing

The Bunnings Warehouse Property Trust is listed on the Australian Stock Exchange and reported in the "Industrial" section in daily newspapers - code BWP.

Distribution reinvestment plan

Unitholders may elect to reinvest all or part of their distribution entitlements in new units in the Trust if they choose to participate in the Distribution Reinvestment Plan.

New units are issued under this plan at a discount to the market price without brokerage or other costs. The directors have determined that the current discount of 2.5 per cent will remain

for the final distribution payable in August 2004 representing an issue price of \$1.54.

Unitholders wishing to have their distributions reinvested in this manner should contact the registry manager for more details and to obtain an application form.

Electronic payment of distributions

Unitholders may nominate a bank, building society or credit union account for the payment of distributions by direct credit. Payments are electronically credited on the distribution date and confirmed by mailed payment advice.

Unitholders wishing to take advantage of payment by direct credit should contact the registry manager for more details and to obtain an application form.

Publications

The annual report is the main source of information for unitholders. In addition, unitholders are sent a half-year report in February each year providing a review, in summary, of the six months to December.

Periodically, the Trust may also send releases to the Australian Stock Exchange covering matters of relevance to investors.

Website

The Bunnings Warehouse Property Trust internet site, www.bunningspropertytrust.com.au, is a useful source of information for unitholders. It includes details of the Trust's property portfolio, current activities and future prospects. The site also provides access to annual and half-year reports and releases made to the Australian Stock Exchange.

Annual tax statements

Accompanying the final distribution payment in August or September each year will be an annual tax statement which details tax advantaged components of the year's distribution.

Profit distributions

Profit distributions are paid twice yearly, normally in February and August or September.

Unitholder meetings

Unitholder meetings are held from time to time at which unitholders have the opportunity to learn more about the Trust's activities and prospects. The last unitholder meeting was held in December 2002. Unitholders will be notified in advance details of future meetings.

Unitholder inquiries

Please contact the registry manager if you have any questions about your unitholding or distributions:

Computershare Investor Services Pty Limited Level 2 45 St George's Terrace Perth WA 6000 Tel: (08) 9323 2000 Fax: (08) 9323 2033 Website: www.computershare.com.au

Maria C.

TERRETTERE REGENERE STATISTIKE PRO Œ. Directors distribution

STATEMENTS OF FINANCIAL PERFORMANCE AND DISTRIBUTION

		O4	03
For the year eaded 30 Juse 2004	Nole	SOOO	S000
Statement of financial performance
Revenue and expenses from ordinary activities
Rental income		42,347	33,693
Other property income		1,988	2,112.
Interest income		139	130
		44,474	35,935
Responsible entity's fees		(2,987)	(2,359)
Auditors' remuneration Interest and borrowing costs		(43) (8,366)	(27) (6,679)
Rates and taxes.		(366)	(260)
Other operating expenses		(463)	(270)
Net profit attributable to members of Bunnings Warehouse Property Trust		32,249	26,340
Increase in asset revaluation reserve	9.13	51,726	3,482
Total revenues, expenses and valuation adjustments attributable to unitholders
and recognised directly in unitholders' funds		51,726	3,482
Total changes in equity other than those resulting from transactions with
unitholders as unitholders		83,975	29,822
Statement of distribution
Net profit attributable to members of Bunnings Warehouse Property Trust.		32,249	26,340
Undistributed income at the beginning of the financial year		7
Total available for distribution		32,256	26,341
Distributions paid and payable		32,255	26,334
Undistributed income at the end of the financial year		-1
Basic and diluted earnings per unit (cents per unit)	6	$-11.4$	10.5
Distribution per ordinary unit (cents per unit)		11.38	10.50.
The statement of financial performance and distribution should be read in conjunction with the accompanying notes.

$20.$

Borsings Warehouse Property Trust 2004 animal report

STATEMENT OF FINANCIAL POSITION

		04	03
As at 30 Jane 2004	Nate	\$000	\$000
Current assets
Cash assets		5,366	4,783
Other		714	243
Total current assets		6,080	5,026
Non-current assets
Investment properties	9	569,262	466,539
Total non-current assets		569,262	466,539
Total assets		575,342	471,565
Current liabilities
Payables	11	7,479	5,412
Distribution payable		17,314	14,233
Total current liabilities		24,793	19,645
Non-current liabilities
Payables	19		13,726
Interest bearing liabilities.	10	155,220	135,552
Total non-current liabilities		155,220	149,278
Total liabilities		180,013	168,923
Net assets		395,329	302,642
Unitholders' funds
Contributed equity	-12	320,249	279,282
Asset revaluation reserve	9,13	75,079	23,353
Undistributed income reserve	14
Total unitholders' funds		395,329	302,642
Net tangible asset backing per unit		\$1.34	\$1.14

The statement of financial position should be read in conjunction with the accompanying notes.

Burnings Warehouse Property Yrust 2004 annual report

STATEMENT OF CASH FLOWS

		84	63
For the year esded 30 Juse 2094	Note	SOOD	SCHO-
Cash flows from operating activities
Rent received.		49,956	43,705.
Payments to creditors .		(6, 302)	(4,619)
Payments to the responsible entity		(2,864)	(2,196)
Interest received		139	$130 -$
Borrowing costs paid		(8,450)	(6,838)
Net cash flows from operating activities	15	32,479	30,182
Cash flows from investing activities
Payments for purchase of, and additions to, the Trust's property investments		(51, 135)	(1.14, 894)
Proceeds from sale of property investments.		1,500
Net cash flows used in investing activities		(49, 635)	(114, 894)
Cash flows from financing activities
Proceeds from the issue of units		25,000	33,680
Issue costs paid and products.		(186)	(463)
Proceeds from interest bearing liabilities.		19,668	55,100.
Distributions paid Constitutions		(13,017)	(12,803)
(Repayments)/proceeds of non-interest bearing liabilities		(13, 726)	13,726
Net cash flows from financing activities		17,739	89,240
Net increase in cash held		583	4,528
Cash held at the beginning of the financial year		4,783	255
Cash held at the end of the financial year		5,366	4,783

The statement of cash flows should be read in conjunction with the accompanying notes.

Borsings Warehouse Property Trust 2004 animal report

For the year ended 30 Jane 2004

Ŧ

Summary of significant accounting policies

The financial report is a general purpose financial report made out in accordance with the requirements of the Constitution of Bunnings Warehouse Property Trust (the Trust) and the Corporations Act 2001, which includes applicable Accounting Standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views). They have been prepared on the basis of the historical cost convention except for property investments which are carried at their fair value based on independent valuations conducted at intervals of not more than three years.

The significant policies which have been adopted in the preparation of these financial statements are:

(a) Changes in accounting policies.

Accounting policies are consistent with the previous year.

(b) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured...

Specific revenues are recognised as follows:

Rental and other property income

Rental and other property income is recognised as income when receivable under the terms of the rental agreement. Interest income

Interest income is recognised as income when control of the right to receive the interest payment is attained.

(c) Expenditure

Expenditure, including the responsible entity's fees, are brought to account on an accrual basis.

(d) Payables

Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Trust. These liabilities are normally settled on 30 day terms.

(e) Taxation

Under current Australian income tax legislation, the Trust is not liable for income tax provided that its taxable income (including any taxable capital gains) is fully distributed to unitholders each year. Goods and Services Tax

Revenues, expenses and assets (with the exception of receivables) are recognised net of the amount of Goods and Services Tax (GST) to

the extent that the GST is recoverable from the taxation authority. Where GST is not recoverable, it is recognised as part of the cost of acquisition, or as an expense.

Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to the taxation authority is included in the Statement of Financial Position as a receivable or payable.

Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash flows arising from investing and. financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Contributed equity (f)

Issued and paid up capital is recognised at the fair value of the consideration received by the Trust.

Any transaction costs arising on the issue of ordinary units are recognised directly in equity as a reduction of the unit proceeds received.

$\left( 9\right)$ Depreciation

The buildings and any component of them (including plant and equipment) included in property investments are represented in accordance with AASB 1021: Depreciation, and are not depreciated for accounting purposes. Taxation allowances for building, plant and equipment depreciation are declared as tax advantaged components of distributions.

(h) Interest bearing liabilities

Bank loans are carried at their principal amount less any unexpired discount for bank bills. These loans are generally borrowed for the short term under long term facilities. The loans are allocated between current and non-current based on the repayment period for the facilities, Interest, where applicable, is charged as an expense at short term commercial rates as it accrues.

Property outgoings $(0)$ .

Under all leases for the properties in the Trust's portfolio, all property outgoings (including rates and taxes, insurance, repairs and maintenance and land tax) are paid by Bunnings Pty Ltd except for land tax in relation to properties located in Queensland where legislation prohibits recovery of land tax from tenants, and at the Bayswater property where (and tax paid by the tenant is calculated on the basis that Bayswater is the only property owned by the Trust in Victoria.

Burnings Warehouse Property Yrust 2004 annual report

For the year eaded 30 Juse 2004

∵§

Summary of significant accounting policies (continued)

Property investments (i) =

Land and buildings are considered to have the function of an investment and are therefore regarded as a composite asset. Accounting Standards do not require investment properties to be depreciated. Accordingly, the buildings and components thereof (including plant and equipment) are not depreciated.

Independent valuations of property investments are obtained at intervals of not more than three years. Such valuations of property investments are reflected in the financial statements of the Trust. Notwithstanding this, the directors of the responsible entity assess the carrying value at each reporting period to ensure carrying values do not materially differ from fair values. Where carrying values differ from the fair value, those assets are adjusted to their fair value. In determining fair value, the expected net cash flows have been discounted to their present value using a market risk adjusted discount rate.

A revaluation increment is credited directly to the asset revaluation reserve, unless it reverses a previous revaluation decrement charged as an expense in determining operating profit in respect of that same class of asset, in which case the increment is credited to operating profit.

Expenditure capitalised to properties includes the cost of acquisition, capital and refurbishment additions, and during development -includes rates, taxes, financing charges and related professional fees incurred, net of sundry income. Leasing fees incurred in relation to the on-going renewal of major tenancies are deferred and amortised over the lease period to which they relate.

Where assets have been revalued, the potential effect of the capital gains tax (CGT) on disposal has not been taken into account in the determination of the revalued carrying amount because the Trust does not expect to be ultimately liable for CGT in respect of assets.

(k) Rounding

In accordance with ASIC Class Order 98/100, these reports have been rounded to the nearest thousand dollars.

(1) Cash and cash equivalents

Cash on hand and in banks and short-term deposits are stated at nominal value.

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within two working days, net of outstanding bank overdrafts.

Bank overdrafts are carried at the principal amount, interest is charged as an expense as it accrues.

(m) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreements so as to reflect the risks and benefits incidental to ownership.

Operating leases

The minimum rental revenues of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as revenue on a straight line basis, which is considered to best represent the pattern of service rendered through the provision of the leased asset.

(n) Distribution payable

The Constitution of the Trust provides that its Distributable Profit is to be distributed to unitholders at each half year. As a liability for distribution arises upon the derivation of profits by the Trust, a provision for distribution has been recognised at each balance date.

(o) Earnings per unit

Basic Earnings Per Unit (EPU) is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than distributions), divided by the weighted average number of units, adjusted for any bonus element.

The diluted EPU is not materially different from the basic EPU.

(p) Comparative figures

Bersings Warehouse Property Truct 2004 animal report

-2-

Certain reclassifications have been made to the prior year's accounts in order to enhance comparability with those of the current year.

Responsible entity's fee

The responsible entity, Bunnings Property Management Limited, is entitled to a management fee payable quarterly in arrears of 0.55 per cent per annum of the gross asset value of the Trust...

The responsible entity is also entitled to a fee calculated at the rate of 0.05 per cent per annum of the gross asset value of the Trust up to \$200 million and 0.035 per cent per annum of the amount by which the gross asset value of the Trust exceeds \$200 million. The additional fee would, as a minimum, be \$40,000 per annum.

	For the year ended 30 June 2004	{}4	03
З.	Auditors' remuneration
	Auditing or review of the financial statements	25,017	24,025
	Other services.	18,243	2,600
		43,260	26,625
		04	03
		\$888	\$000
4	Borrowing costs
	Interest expense - other persons/corporations	8,511	6,679
	Interest expense capitalised.	(145)
		8,366	6,679
51	Distributions paid and payable
	5.51 cents (2003: 5.15 cents) per ordinary unit, interim distribution paid	14,941	12,101
	5.87 cents (2003: 5.35 cents) per unit, final distribution provided	17,314	14,233
		32,255	26,334
	6 > Earnings per unit
	Net earnings used in calculating basic and diluted earnings per unit	32,249	26,340.
	Basic and diluted earnings per unit.	11.4 cents	$10.5$ cents
	Weighted average number of units on issue used in the calculation of basic	284,090,785
	and diluted earnings per unit		249,793,986
7	Cash assets
	Cash at bank	5,366	4,783
	Weighted average effective interest rates	4.1%	4.2%
81	Other - current assets
	Prepayments	714	243

$25₃$

Burnings Warehouse Property Yrust 2004 annual report

the control For the year ended 30 June 2004 $\%$

9 Investment properties

Ñ.

		٠.
The back age of	(a) Investments

Bursings Warehouse Property Trust 2004 annual report

	Acquisition –		Valuation <<< - Valuation		Fair value.
Property	date	date	8000	04 SOOO	.03 \$()()()
Albany, WA	01.11.99	04.11.02	4,500	$-4,500$	4,500
Altona, VIC	24.09.98	01.03.04	10,250	10,250	8,200
Artarmon, NSW	10.02.03	24.10.02	14,100	14,889	14,888
Balcatta, WA	24.09.98	31.01.04	15,500	15,500	11,700
Bayswater, VIC	11.02.03	16.04.04	18,600	19,100	7,793
Belrose, NSW	10.02.03	24.10.02	16,900	18,189	18,187
Bibra Lake, WA	29.12.98	01.02.02	8,650	$-8,651$	8,650
Broadmeadows, VIC	24.09.98	30.06.04	10,700	10,700	8,450
Burleigh Heads, QLD	22.10.98	29.10.03	12,350	12,350	10,200
Cairns, QLD	10.02.03	24.10.02	10,000	10,445	10,445
Cannon Hill, QLD -	24.12.98	.23.06.04	12,600	12,600	9,400
Cannon-Hill Distribution Centre, QLD,	01.11.99	06.10.02	3,500	3,500	3,500
Coffs Harbour, NSW	05.09.01	20.09.01	6,400	6,509	6,509
Croydon, VIC	24.09.98	30.06.04	10,500	10,500	9,200
Dandenong, VIC	19.04.02	19.12.01	10,700	10,915	10,915
Epping, VIC	12.03.99	30.06.04	11,400	11,400	9,500
Fountain Gate, VIC	24.09.98	01.03.04	12,100	12,100	10,500
Frankston, VIC	26.06.01	30.06.04	20,000	20,000	16,994
Fyshwick, ACT	23.12.02	24.09.02	10,000	10,695	-10,692
Geraldton, WA Hemmant, QLD	10.12.01 07.05.03	10.09.01 02.04.03	$-6,475$ 13,250	6,824 13,393	6,824 3,143.
Hervey Bay, QLD	12.07.02	31.07.02	8,600	9,351	9,351
Hoppers Crossing, VIC	11.01.99	01.02.02	8,800	8,800	8,800
Joondalup, WA	24.09.98	31.01.04	10,800	10,800	8,300
Lismore, NSW	21.04.04	02.07.03	7,800	8,193
Maitland, NSW	20.08.03	30.07.03	10,800	9,566
Mandurah, WA	24.09.98	31.01.04	9,100	9,100	7,350
Maribymong, VIC	28.06.01	30.06.04	8,000	8,000	7,562
Mentone, VIC	24.09.98	30.06.04	12,400	12,400	12,100
Midland, WA	06.03.01	31.03.04	11,900	11,900	9,784
Mile End, SA	22.03.00	01.04.03	12,700	12,700	12,700
Minchinbury, NSW	31.12.98	31.12.03	15,750	15,750	10,000
Mindarie, WA	03.03.00	11.03.03	10,600	10,600	10,600
Morayfield, QLD	22.03.00	27.03.03	8,800	-8,800	8,800
Mornington, VIC	29.12.98	01.02.02	10,700	10,700	10,700
Noarlunga, SA	13.04.99	01.02.02	6,940	6,946	6,940
Northland, VIC	24.09.98	30.06.04	13,400	13,400	10,900
Nunawading, VIC	24,09.98	01.03.04	18,100	18,100	16,395
Oakleigh South, VIC	05.04.01	30.06.04	19,000	19,000	17,413
Port Macquarie, NSW	15.11.02	22.05.02	7,550	7,641	2,241
Rockargham, WA	30.06.00	30.06.03	10,400	10,400	10,400
Rocklea, QLD Sandown, VIC	23.10.02 24.09.98	28.04.03 01.03.04	13,650 9,900	13,995 .9,900	6,516 9,400
Scoresby, VIC Southport, QLD	24.09.98 09.11.98	30.06.04 29.10.03	11,800 12,350	11,800 12,350	10,200 10,200

For the year ended 30 June 2004

9 Investment properties (continued).

(a) Investments (continued)

mannananin famininana) Acquisition Valuation Valuation mmonedate successor date os – Froperty –		…Fair value
\$000	\$000	\$000
Sunshine, VIC .30.06.04. 24.09.98 8,900	$-8.900$	8,450
01.12.98 31.12.03 1 Tuggeranong, ACT 12.610.	12.611	$-8,600$
Underwood, QLD $-22.10.98$ $-29.10.03$ 11.300	11.300	$-9.400$ .
.Nermont South, VIC. $-30.12.02$ 10.000 14.05.03	10.630	$10.629 -$
Wollongong, NSW 28.10.02 $-10.02.03$ 11.600	12.619	12,618
$-562.725$	569.262	466.539

Where the fair value of properties exceeds the valuation, it is due to stamp duty and other acquisition costs capitalised since the latest valuation. It is assumed that property values will increase over the period to the next valuation to offset the difference. And all all the

The property valuation at Hervey Bay does not include the value of approximately 0.4 hectares of surplus land. The Trust will receive \$725,000 from the proceeds of sale of the surplus land.

The Maitland property has been valued on an as-completed basis. Construction is in progress on the site, and development is scheduled for completion by September 2004.

(b) Cost of investments

			Capital
			improvements		Fair value
	urchase	Acquisition	since	Revaluation	30 june.
Proper	price	costs	acquisition	increment 8000	·04 \$000
	SXX)	\$000	\$000
Albany, WA	4,100	200		200	4,500
Altona, VIC	.6,800	382		3,068	10,250
Artarmon, NSW	14,033	856			14,889
Balcatta, WA	11,200	552		3,748	-15,500
Bayswater, VIC	7,335	482	11.283		19,100
Beirose, NSW	17,150	1,039			18,189
Bibra Lake, WA	1,899	92	6,350	310.	8,651
Broadmeadows, VIC	7,200	405		3,095	10,700
Burleigh Heads, QLD	9.700	187		2,463	12,350
Cairns, QLD	10.000	445			10,445
Cannon Hill, QLD	2,500	176	6,350	3,574	12,600
Cannon Hill Distribution Centre, QLD	3,100	126		274	3,500
Coffs Harbour, NSW	-1,900	109	4,500		6,509
Croydon, VIC	7,800	437		2.263	40,500
Dandenong, VIC	4.000	255	6.660		10,915
Epping, VIC	7,800	455		3,145	-11,400
Fountain Gate, VIC	8,300	498		3,302	12,100
Frankston, VIC	7,300	294	.9,400	3,006	20,000
Fyshwick, ACT	10,000	695			10,695.
Geraldton, WA	1,250	349	5,225		6,824
Hemmant, QLD	3,000	143	10,250		13,393
Hervey Bay, QLD	2,778	148.	6,425		9,351
Hoppers Crossing, VIC	2,075	127	5,925	673	.8,800
Joondalup, WA	8,100	399		2,301	10,800
Lismore, NSW.	7.750	443			8,193
Maitland, NSW	898	272	8.396		9,566

Burnings Warehouse Property Yrust 2004 annual report

27

For the year eaded 30,3uac 2004

9 Investment properties (continued)

(b) Cost of investments (continued)

			Capital
			improvements		Fair value
	Purchase price	Acquisitìon	since	Revaluation -increment	30. june Ð4
Property	\$000	COSÈS \$000	acquisition \$000	\$930	SXX
Mandurah, WA	3,050	156	4.046	1,848	9.100
Maribyrnong, VIC	7,100	462		438	$-8,000$
Mentone, VIC	9,400	525		2,475	12,400
Midland, WA	4,600	254	4.930	2,116	11,900
Mile End, SA	11,250	617		833	12,700
Minchinbury, NSW	9,200	496		6,054	15,750
Mindarie, WA	4,184	206	5,598	612	10,600
Morayfield, QLD	8,000	322		478	.8,800
Mornington, VIC.	3,400	196	$-6,481$	623	10,700
Noarlunga, SA	2,304	120	3,750	772	6,946
Northland, VIC	.8,600	481		4,319	13,400
Nunawading, VIC	13,700	774		3,626	18,100
Oakleigh South, VIC	6,650	370.	9,143	2,837	19,000
Port Macquarie, NSW	2,100	141	5,400		$-7,641$
Rockingham, WA	3,320	165	-5,830	1,085	10,400
Rockiea, QLD	6,225	295	7,475		13,995
Sandown, VIC	7,800	437		.663	9,900
Scoresby, VIC	8,300	465		3,035	11,800
Southport, QLD	2,800	181	6,600	2,769	12,350
Sunshine, VIC	7,000	394		1,506	8,900
Tuggeranong, ACT	7,900	423		4,288	12,611
Underwood, QLD	3,000	170	5.850	$-2.280$	11,300
Vermont South, VIC	10,000	-630			10,630
Wollongong, NSW	12,000	619			12,619
	290.951	19 AGE	$+15.967$	75 A70	500 OSO

(c) Valuers

Bursings Warehouse Property Trust 2004 annual report

- Froperty	Valuation date	Valuer
Albany, WA	04.11.02	G R Elliot, FAPI - FPD Savills
"Altona, VIC -	.01.03.04	D Gowing, FAPI - C B Richard Ellis
Artarmon, NSW	$-24.10.02$	J E Burdekin, FAPI and B R Stewart, AAPI - Jones Lang LaSalle
Balcatta, WA	31.01.04	S Nuttall, AAPI ASIA - C B Richard Ellis
Bayswater, VIC	-16.04.04	B F Sweeney, AAPI - Jones Lang LaSalle
Belrose, NSW	24.10.02	U. E. Burdekin, FAPI and B. R. Stewart, AAPI + Jones Lang LaSalle
Bibra Lake, WA .	01.02.02	G N Kennedy, FAPI - Jones Lang LaSalle
Broadmeadows, VIC	30.06.04	D Gowing, FAPI - C B Richard Ellis
Burleigh Head, QLD	$-29.10.03$	J Porter, FAPI -- C B Richard Ellis
Cairns, QLD	24.10.02	C J Chatwood AAPI - Jones Lang LaSalle
Cannon Hill, QLD -	-23.06.04	J Porter, FAPI - C B Richard Ellis
Cannon Hill Distribution Centre, QLD	:06.10.02	C J Chatwood AAPI - Jones Lang LaSalle
Coffs Harbour, NSW	-20.09.01	E Watts, FAPI - Colliers International
"Croydon, VIC ~	30.06.04	D Gowing, FAPI - C B Richard Ellis

For the year, ended 30 Jane 2004

9 Investment properties (continued)

(c) Valuers (continued)
Property	Valuation date	Valuer
Dandenong, VIC	19.12.01	B F Sweeney, AAPI - Jones Lang LaSalle
Epping, VIC	30.06.04	D Gowing, FAPI - C B Richard Ellis
Fountain Gate, VIC	01.03.04	D Gowing, FAPI - C B Richard Ellis
Frankston, VIC	30.06.04	B F Sweeney, AAPI - Jones Lang LaSalle
Fyshwick, ACT	24.09.02	B F Sweeney, AAPI - Jones Lang LaSalle
Geraldton, WA	10.09.01	G N Kennedy, FAPI - Jones Lang LaSalle
Hemmant, QLD	02.04.03	C J Chatwood, AAPI - Jones Lang LaSalle
Hervey Bay, QLD	31.07.02	W R Wiemann, AAPI ~ Jones Lang LaSalle,
Hoppers Crossing, VIC	01.02.02	B F Sweeney, AAPI - Jones Lang LaSalle
Joondalup, WA	31.01.04	S Nuttall, AAPI ASIA - C B Richard Ellis
Lismore, NSW	02,07.03	M Steur, AAPI FNZPI and C Molony, B Land
		Economics, GAPL – C B Richard Ellis
Maitland, NSW	30.07.03	C Sutton, AAPI ANZIV and J Waugh, FAPI - Colliers International
Mandurah, WA	31.01.04	S Nuttall, AAPL ASIA - C B Richard Ellis
Maribyrnong, VIC	30.06.04	B F Sweeney, AAPI - Jones Lang LaSalle
Mentone, VIC	30.06.04	D Gowing, FAPI - C B Richard Ellis
Midland, WA	31.03.04	S Nuttall, AAPI ASIA - C B Richard Ellis
Mile End, SA	01.04.03	C Gurney, AAPI and M Harrington, AAPI AREI - McGees
Minchinbury, NSW	31.12.03	M Steur, AAPI FNZPI and C Molony, B. Land Economics, GAPI - C B Richard Ellis
Mindarie, WA Morayfield, QLD	11.03.03 27.03.03	G R Elliot, FAPI – FPD Savills C J Chatwood, AAPt - Jones Lang LaSalie
Mornington, VIC	01,02.02	B F Sweeney, AAPI - Jones Lang LaSalle
Noarlunga, SA	01.02.02	M Harrington, AAPI -- McGees
.Northland, VIC .	30.06.04	D Gowing, FAPI - C B Richard Ellis
Nunawading, VIC	01.03.04	D Gowing, FAPI - C B Richard Ellis
Oakleigh South, VIC	30.06,04	B F Sweeney, AAPI - Jones Lang LaSalle
Port Macquarie, NSW.	22.05.02	E Watts, FAPI - Colliers International
Rockingham, WA	30.06.03	G R Elliott, FAPI - FPD Savills .
Rocklea, QLD	28.04.03	J K Dillon, AAPI - Jones Lang LaSalle
Sandown, VIC	01.03.04	D Gowing, FAPI - C B Richard Ellis
Scoresby, VIC	30.06.04	D Gowing, FAPL - C B Richard Ellis
Southport, QLD	29.10.03	J Porter, FAPI - C B Richard Ellis
Sunshine, VIC	30.06.04	D Gowing, FAPI - C B Richard Ellis
Tuggeranong, ACT	31.12.03	M Shadbolt, AAPI - C B Richard Ellis
Underwood, QLD	29.10.03	J Porter, FAPI - C B Richard Ellis
Vermont South, VIC	30.12.02	B F Sweeney, AAPI - Jones Lang LaSalle
Wollongong, NSW	28.10.02	J E Burdekar, FAPI and B R Stewart, AAPI - Jones Lang LaSalle

Property valuations were based on the present value of future cash flows and capitalisation methods.

Bursings Warehouse Property Trust 2004 annual report

For the year asded 30 Juse 2004

9.

$\mathbb{E}$ investment properties (continued) $\mathbb{E}$

(d) Operating leases

• (i) "With the exceptions of Maribyrnong and Vermont South, which are land only, 0.4 hectares of surplus land on the Hervey Bay property and the Maitland development site, all of the properties listed in Note 9(a), (b) and (c) with a book value of \$539.8 million are leased by Bunnings Pty Ltd (the tenant).
• (ii) Key lease terms are as follows:
• . The majority of leases are for a term of five years with four option terms of five years each. The responsible entity or the tenant can exercise the first two options but only the tenant can exercise the last two options. The following are variations to the above:
  • Artarmon, Belrose, Cairns, Wollongong a term of five years with five option terms of five years each. The responsible entity or the tenant can exercise the first two options but only the tenant can exercise the last three options;
  • Bayswater $\pm$ a term of ten years with four option terms of five years each exercisable only by the tenant;
  • Fyshwick.-... a term of ten years with two option terms of five years each exercisable only by the tenant;
  • Hemmant a term of five years with four option terms of five years. The responsible entity or the tenant can exercise the first option but only the tenant can exercise the last three options; and
  • Lismore a term of five years with four option terms of five years each. The responsible entity or the tenant can exercise the first option but only the tenant can exercise the last three options.
• ». Subject to the variations set out below, rental is reviewed annually in line with movements in Consumer Price Indices compiled by the Australian Bureau of Statistics except on each fifth anniversary of the commencement date when rent is reviewed to market rental determined in accordance with generally accepted rent review criteria. With the exception of leases for the properties at Artarmon, Befrose, Cairns and Wollongong, on a market review there is a restriction on the rental decreasing. below the commencement rent.

The following are variations to the above:

• Albany in determining market rent reviews, evidence is to include rental values of similar premises to Bunnings Warehouse stores in regional centres around Australia, rather than in Western Australia only. . . . . . . . . .
• Bayswater the market rent review may be no greater than 115 per cent nor less than 85 per cent of the rent in the preceding year.
• Coffs Harbour -- the market rent review on the fifth anniversary of the commencement date may not be less than \$671,000.
• Lismore the market rent review may be no greater than 120 per cent nor less than 80 per cent of the rent in the preceding year.
• Mile End -- the rent is comprised of a reviewable rent and a fixed rent of \$209,000 per annum. At the first market review, the reviewable rent must be at least 10 per cent above, but not more than 20 per cent above the commencement rent.
• . With the exception of land tax for properties in Queensland and the Bayswater property, the tenant is responsible for payment of all outgoings, which include all normal rates, taxes and assessments including land tax and metropolitan region tax at the amount assessed. In Queensland, land tax is not recoverable from a tenant, and in regard to the Bayswater property land tax paid by the tenant is calculated on the basis that Bayswater is the only property owned by the Trust in Victoria. The tenant is responsible for payment of all utilities utilised by it from all premises.
• (iii) There are no lease commitments receivable as at the reporting date.
• (iv) There were no contingent rentals recognised as revenues in the financial year.
• (v) The future minimum non-cancellable rental revenues are:

Not la Later Later

Borssings Warehouse Property Truct 2004 annual report

		\$000
ster than one vear
than one year not later than five years		900
than	268,114	258,701
		559

For the year ended 30 June 200	04 \$000	03 \$000
9 - Investment properties (continued)
(e) Reconciliation
Carrying amount at the beginning of the financial year	466,539	348,291
Capital additions	52,247	114,766
Capital disposals	(1,250)
Net revaluation increments	51,726	3,482
Carrying amount at the end of the financial year	569,262	466,539
10 Interest bearing liabilities
Non-current bank loans	155,220	135,552
Terms and conditions relating to the above financial instrument:
Bank loans bear interest at short term commercial rates payable at the time of maturing of the bank bills. The weighted average interest rate (including margins) for the year ended 30 June 2004 was 6.0 per cent (2003: 6.2 per cent) and includes interest rate hedging adjustments since the inception of the hedges (see Note 17).
11 Payables
Trade creditors and accruals	6,427	4,126
Responsible entity's fees payable	800	.678
Related parties - associated entities (see Note 19)	252	608
12 Contributed equity (a) Value of units on issue
Value at the beginning of the financial year .	279,282	235,259
Value of units issued during the financial year	41,157	44,487
Equity raising costs	(190)	(464)
Value at the end of the financial year	320,249	279,282
	Units 88B	Inits 000
(b) Number of units on issue
Number of units on issue at the beginning of the financial year	266,043	231,608
Number of units issued during the financial year	28,910	34,435
Number of units on issue the end of the financial year	294,953	266,043
Equity raising costs relate to the placement of 18,249,414 units issued at \$1.37 per unit during the year ended 30 June 2004. The costs include underwriting, listing fees and legal fees.
Units issued during the year under the Distribution Reinvestment Plan were as follows
5,111,489 ordinary units at \$1.50 per unit on 5 September 2003.
5,548,560 ordinary units at \$1.53 per unit on 25 February 2004,

ang pagkalang

Bureings Warehouse Property Trust 2004 annual report

e kalaysia County e e sur

tan di Santan Bandara.
Kabupatèn Santan Bandara 15, the con

	04	03
For the year eacled 30 June 2004	SOOO	\$000
Reserves and undistributed income 13
Asset revaluation	75,079	23,353
Undistributed income
	75,080	23,360
Asset revaluation
(a) Nature and purpose of reserve The asset revaluation reserve is used to record increments and decrements in the value of property investment assets. In accordance with the Constitution of the Trust, amounts in the asset revaluation reserve are not distributed to unitholders until the assets have been sold and the increments realised.
Movements in reserve (b)
Balance at the beginning of the financial year -	23,353	19,871
Revaluation increments arising from the revaluation of investment properties	51,726	3,482
Balance at the end of the financial year.	75,079	23,353
14 Distributions
Undistributed income at the beginning of the financial year.
Net profit attributable to unitholders in Bunnings Warehouse Property Trust.	32,249	26,340
Distributions paid and payable (see Note 5)	(32, 255)	(26, 334)
Undistributed income at the end of the financial year
15 Statement of cash flows
(a) Reconciliation of operating profit to the net cash flows from operations
Net operating income from ordinary activities	32,249	26,340
Increase in receivables Increase in accounts payable	(470) 700	(168) 4,010
Net cash provided by operating activities	32,479	30,182
(b) Reconciliation of cash
Cash balance comprises:
Cash assets (see Note 7)	5,366	4,783
(c) Non cash financing activities Distribution Reinvestment Plan
Under the terms of the Distribution Reinvestment Plan, \$16,156,530 (2003: \$10,806,784) of distribution to unitholders was paid by way of the issue of 10,660,049 units (2003: 8,326,571 units)
16: Financing arrangements
The Trust has access to bank bill lines totalling \$175 million (2003: \$175 million) through a facility agreement with National Australia Bank
Limited. The amount of credit unused at 30 June 2004 was \$19.2 million (2003: \$38.9 million). The agreement expires in November 2005.

$\gamma_{\rm SFR}$ , and $\gamma_{\rm SFR}$

. . . . . . . . . Выязілу; Warehouse Property Yrust 2004 алима! герогі . . .

For the year ended 30 Jane 2004

17 Financial instruments

Recognised financial instruments

The Trust has recognised certain financial instruments in the accounts. These financial instruments are disclosed in Notes 7, 10, 11 and 19. Unrecognised financial instruments

(a) Interest rate risk exposure

The Trust is exposed to financial risk from movement in interest rates. To reduce its exposure to adverse fluctuations in interest rates the Trust has employed the use of interest rate swaps whereby the Trust agrees with various banks to exchange at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed notional principal amount. Any amounts paid or received relating to interest rate swaps are recognised as adjustments to interest expense over the life of each contract swap, thereby adjusting the effective interest rate on the underlying obligations. At 30 June 2004 the fixed rates varied from 4.970 per cent to 6.615 per cent (2003: 5.085 per cent to 6.615 per cent) and the floating rates were at bank bill rates.

The Trust's exposure to interest rate risk for classes of financial assets and financial liabilities is set out below.

			- Fixed interest maturing in:		Non-
	Variable interest	1 year or less	$-1, 10.5$ years.	Over 5., years	interest bearing	Totál
04	SOOO	SOOO	SIKK	SIKK	\$000	\$000
Financial assets
Cash assets	5,366					5,366
	5,366					5,366
Financial liabilities
Interest bearing liabilities	155,220					155,220
Payables					7,479	7,479
	155,220				7,479	162,699
Interest swaps.	(164,000)	7.000	97,000	- 60.000
-03
Financial assets
Cash assets	4,783					4,783
	4,783					4,783
Financial liabilities
Interest bearing liabilities	$-135,552$					135,552
Payables.					19,138	19,138
	135,552				19,138	154.690

Interest swaps $(158,000)$ 14,000 62,000 82,000

(b) Concentration of credit risk

The credit risk associated with the rental income is with one tenant, Bunnings Pty Ltd, a wholly owned subsidiary of Wesfarmers Limited. Bunnings Pty Ltd and Wesfarmers Limited are currently subject to a Deed of Cross Guarantee under which they covenant with a trustee for the benefit of each creditor that they guarantee to each creditor payment in full of any debt in the event of any entity that is included in the Deed of Cross Guarantee being wound up.

(c) Net fair values

The carrying amounts of financial assets and financial flabilities recorded in the financial statements represent their respective net fair values, determined in accordance with the accounting policies disclosed in Note 1 of the financial statements with the exception of interest rate swaps.

Bureings Warehouse Property Trust 2004 annual report

For the year eaded 30 June 2004
17 Financial instruments (continued)
(d) Interest rate swaps
The valuation below reflects the estimated amount which the Trust would receive to terminate the contracts (net of transaction-costs) or replace the contracts at their current market rates at balance date. This is based on independent market quotations and determined
using standard valuation techniques.
- 04 - 11
Carrying amount [1] Net fair value [1] Carrying amount 11 Net fair value 5000 SOOO	SON	SUDD
Financial liability
Interest rate swaps		$-4.486$
Financial asset
interest rate swaps 1.371
18 Capital expenditure commitments	04	03
	SOOO	SU00
Estimated capital expenditure contracted for at balance date, but not provided for, payable:
Not later than one year.
Associated entities	13,333	23,125
Other	2.129
Later than one year and not later than five years
Associated entities	6,700	6,700
	22,162	29,825
Maitland, New South Wales

In August 2003, the Trust acquired a 3.1 hectare development site at Maitland for a purchase price of \$0.9 million. The Trust has entered into an agreement with Kilcor Commercial Pty Ltd to project manage the development for \$9.8 million. At 30 June 2004 there was \$1.4 million. outstanding on the contract.

Maribyrnong, Victoria

Bursings Warehouse Property Trust 2004 annual report

In June 2001, the Trust acquired a 3.4 hectare development site at Maribymong for a purchase price of \$7.1 million. The Trust has accepted a proposal from Bunnings Pty Ltd to develop a Bunnings Warehouse on the site for \$6.7 million. The Trust will receive an annual rental of \$1,250,000 when a Bunnings Warehouse is developed on the site.

Thornleigh, New South Wales

In May 2004, the Trust exchanged contracts with BBC Hardware Properties (NSW) Pty Ltd in regard to the purchase by the Trust of a Bunnings. Warehouse property at Thornleigh, in New South Wales, for \$13.3 million. Upon settlement of the acquisition, the property will be subject to a long term-lease with Bunnings Pty Ltd at an annual commencement rent of \$1,000,000. Stamp duty payable on the transaction is estimated at \$733,000.

34

For the year ended 30 Jane 2004

19 Related party disclosures

(a) The manager and responsible entity

The Manager and responsible entity of the Trust is Bunnings Property Management Limited, a wholly owned subsidiary of Wesfarmers Limited.

(b) Directors of the responsible entity

Directors of the responsible entity during the financial year were W H Cairns, P J Mansell, R W McCuaig and G T Tilbrook.

The relevant interests in units in the Trust held by directors of the responsible entity as at year end were:

Total specified directors		$-22.035$		320,308
- G T Tilbrook	22.779			22.779
	The second conditions are a second conditions and con- . R W McCuaighthead and a little communities of 191, 976 P	*******		$\cdots$ 209,633
P J Manseli	$\frac{1}{2}$ (1940) and the task of the $\frac{1}{2}$ 55,804 and the $\frac{1}{2}$ contribution of the contribution $\frac{1}{2}$ (1940) $\frac{1}{2}$ 59,875
W H Cairns	No. 10 10 10 10 10 11 22,714 + 网络美国美国美国美国美国美国美国美国美国美国美国美国美国美国美国美国美国美国美国	5,307		$\sim$ 100 km in 28,021.
Specified directors
	of the vear	the year	the vear	end of the year
医内皮神经 医单纯有骨髓组织 医单位 医单位 医单位性细胞 医单位 When I was a serious section at the beginning.		Received daring	ana nang - Sold duning -	™ Balance at the

(c) Responsible entity's holding of units

No units are held by the responsible entity.

(d) Transactions with related parties

1. Relationship with the Wesfarmers Group

2. (i) Wesfarmers Investments Pty Ltd, a controlled entity of Wesfarmers Limited, holds 65,744,461 (2003: 61,273,676) units in the Trust, representing 22.29 per cent of the units on issue at 30 June 2004 (2003; 23.03 per cent);

3. (ii) During the year ended 30 June 2004 rent and other property income of \$44,334,364 (2003: \$35,804,685) was received or receivable from Bunnings Pty Ltd, a controlled entity of Wesfarmers Limited. ....
4. (iii) The responsible entity's fee of \$2,986,538 (2003; \$2,358,971) is paid/payable to the responsible entity.
5. (iv) During the year ended 30 June 2004 the Trust acquired a property from BBC Hardware Limited, a wholly owned subsidiary of Wesfarmers Limited, for \$7,750,000 (2003: \$53,183,000). The purchase price was consistent with anindependent valuation.
6. (v) Current payables include an amount of \$252,054 owing to Bunnings Pty Ltd. Last year current payables included a loan amount from Westarmers Limited to the Trust, totalling \$608,160 with no fixed repayment date.
7. (vi) In the prior year non-current payables included interest-free loans from Wesfarmers Limited to the Trust totalling \$13,725,975. These loans were repaid during the year. ...
8. (vii) Mr G T Tilbrook is Executive Director, Business Development of Wesfarmers Limited.
9. 1. During the year Mr W H Cairns provided consultancy services to Jones Lang LaSalle Advisory Services Pty Ltd. Jones Lang LaSalle Advisory Services Pty Ltd provided valuation services totalling \$50,644 (2003: \$19,800) on an arms length basis to the Trust.
10. 1. During the year Freehills, of which Mr P J Mansell was Managing Partner of the Perth office until 29 February 2004, provided legal services on an arms length basis totalling \$72,418 (2003: \$41,128). $\ldots$
11. 1. During the year Colliers International Consultancy & Valuation Pty Limited, of which Mr.B W McCuaig is associated, provided valuation services on an arms length basis totalling \$4,750 (2003: \$18,760).

No other benefits have been received or are receivable by directors of the responsible entity or directors of a related entity.

Burnings Warehouse Property Yrust 2004 annual report

For the year ended 30 Juse 2004

Bursings Warehouse Property Trust 2004 annual report

20 International financial reporting standards (IFRS)

The Trust will be required to adopt Australian Accounting Standards Board (AASB) equivalents to International Financial Reporting Standards (IFRS), in its financial statements for its half year ending 31 December 2005 and full year ending 30 June 2006. At these dates a first time adopter of Australian equivalent IFRS will be required to restate its comparative financial statements using all IFRS, except for AASB4. Insurance Contracts, AASB132 Financial Instruments: Disclosure and Presentation, and AASB139 Financial Instruments: Recognition and Measurement. For the Trust this means the preparation of an opening balance sheet in accordance with IFRS as at 1 July 2004, with the majority of restatement adjustments being made, retrospectively, against the balance of any undistributed income.

During the year the responsible entity began work assessing the likely impact of the new standards on training, system and internal controls, financial reporting and accounting policies. The assessment has included the identification and the potential impact of the various issues. Whilst the majority of accounting policy changes have been noted, there are some choices and elective exemptions that may be taken in regard to the Trust. At this stage, the responsible entity has not selected all of the changes to be made, and as a consequence is not able to reliably quantify the impacts in this financial report, with

Key accounting policy changes identified to date include the following:

Current accounting policy	Accounting policy under AASB equivalents to IFRS
Current measurement of financial instruments is at amortised cost, with- certain derirative financial instruments not being recognised on the Statement of Financial Position.	Financial instruments will be required to be classified into one of five categories, which will in turn determine the accounting treatment of the item. The classifications are loans and receivables, held to maturity, held for trading, available for sale, and non-trading liabilities. This will result in a change in the current accounting policy that does not classify financial assets and liabilities in this manner. Current measurement is at amortised cost, with certain derivative financial instruments not recognised on the Statement of Financial Position. The future financial effect of this change in accounting policy is not yet known as the classification and measurement process has not yet been fully completed. ~~
Investment properties are revalued at least every three years, with the revaluation increments being taken to an asset revaluation reserve, and revaluation- decrements recognised as an expense in- the Statement of Financial Performance to the extent that they are not a reversal of a prior revaluation increment.	The fair value of investment properties must reflect market conditions at reporting date. Changes in fair value will be recognised in the Statement of Financial Performance.

36

For the year ended 30 Jane 2004

21 Additional information

(a) Principal activities and investment policy of the Trust

To invest in warehouse retailing properties and in particular, Bunnings Warehouses tenanted by Bunnings Pty Ltd with the purpose of providing unitholders with a secure, growing income stream and capital growth.

(b) Commencement and life of the Trust

The Trust was constituted under a Trust Deed dated 18 June 1998 and unless terminated earlier under the Trust Deed, continues until the earlier of the expiration of 80 years following the commencement of the Trust and units ceasing to be officially quoted on the Australian Stock Exchange. The Trust is managed by Bunnings Property Management Limited. Both the Trust and the responsible entity are domiciled in Australia.

On 5 August 1999 the Trustee, Perpetual Trustee Company Limited, retired in accordance with the changes in the Corporations Law. under the Managed Investments Act 1998 and Bunnings Property Management Limited became the responsible entity.

(c) Segment reporting

The Trust operates wholly within Australia and derives rental income from investments in commercial property.

(d) Economic dependency

100 per cent (2003: 100 per cent) of the Trust's rental income is received from Bunnings Pty Ltd.

22 Subsequent event

On 31 May 2004 the Trust exchanged contracts with BBC Hardware Properties (NSW) Pty Ltd in regard to the acquisition by the Trust of a Bunnings Warehouse property at Thomleigh, in New South Wales, for \$13.3 million. The contract is now unconditional. Upon settlement of the acquisition, the property will be subject to a long term lease with Bunnings Pty Ltd at an annual commencement rent of \$1,000,000.

Bursings Warehouse Property Trust 2004 annual report

DIRECTORS' REPORT-

Borsings Warehouse Property Trust 2004 animal report

For the year eaded 30 June 2004
In accordance with the Corporations Act 2001, Bunnings Property Management Limited (ABN 26-082-856-424) provides this report for the financial year ended 30 June 2004. The information on pages 7 to 14 forms part of this directors' report and is to be read in conjunction with
the following information:
Results and distributions
	04	03
	SIKK	\$000
Net profit	32,249	26,340
Distributions
The following distributions have been paid by the Trust or declared by the directors since the
commencement of the financial year ended 30 June 2004:
(a) [1] Out of the profits for the year ended 30 June 2003 on the fully-paid ordinary units as
disclosed in last year's directors report: Final distribution of 5.35 cents per unit paid on 5 September 2003.	14,233
(b) Out of the profits for the year ended 30 June 2004 (see Note 5 of the notes to the financial statements):
(i) Interim distribution of 5.51 cents per ordinary unit paid on 25 February 2004.	14,941
(ii) : Einal distribution of 5.87 cents per all units declared by the directors for payment on 27 August 2004.	17.314
Units on issue
294,952,902 units of Bunnings Warehouse Property Trust were on issue at 30 June 2004 (2003: 266,043,439). During the year 28,909,463
(2003; 34,435,003) units were issued by the Trust.
Principal activity
The principal activity is property investment.
There has been no significant change in the nature of this activity during the financial year.
Trust assets
At 30 June 2004, Bunnings Warehouse Property Trust held assets to a total value of \$575.3 million (2003: \$471.6 million). The basis for valuation
of the assets is disclosed in Note 1 of the notes to and forming part of the financial statements.
Fee paid to the responsible entity and associates -	والولوك ووجه
Management fees totalling \$3.0 million (2003: \$2.4 million) were paid to the responsible entity out of Trust property during the financial year.
Trust information
Bunnings Warehouse Property Trust is a Managed Investment Scheme registered in Australia. Bunnings Property Management Limited, the
responsible entity of the Trust, is incorporated and domiciled in Australia. The annual state of the contract of the Contract of

The registered office of the responsible entity is located at Level 11, 40 The Esplanade, Perth, Western Australia, 6000. The Trust had no employees during the financial year (2003: Nil).

DIRECTORS' REPORT

Ļ, $\ddot{\phantom{a}}$ ţ,

For the year ended 30 Jane 2004
Directors
Information on directors
The names of directors of the responsible entity in office during the financial year and until the date of this report are:
W H Cairns
P J Mansell
R W McCuaig
G T Tilbrook
Details of the directors appear on page 15, .
No director is a former partner or director of the current auditor of the Trust.
Directors' units
Units in the Trust in which directors had a relevant interest at the date of this report were:
W H Cairns	Units 28,021
P.J Manseil	-59,875.
RW McCuaid	209,633
G T Tilbrook	$-22,779$
No directors have other rights or options over interests in the Trust or contracts to which the director is a party or under which the director is entitled
to a benefit and that confer a right to call for or deliver an interest in the Trust.
Insurance and indemnity of directors and officers.
During or since the end of the financial year, the responsible entity has paid or agreed to pay a premium in respect of a contract insuring all the
directors and officers against a liability incurred in their role as directors and officers of the entity, except where:
(a) the liability arises out of conduct involving a wilful breach of duty; or
$(6)$ there has been a contravention of sections 182 or 183 of the Corporations Act 2001.
The responsible entity is prohibited from disclosing the premium paid under the contract.
Directors and officers are indemnified by the responsible entity against the costs and expenses of defending civil or criminal proceedings in their capacity as directors and officers in which judgement is given in favour of, or acquittal is granted to, a director or officer.
Review and results of operations
The operations of the Trust during the financial year and the results of those operations are reviewed on pages 7 to 11 of this report and in the
accompanying financial statements.
Significant changes in the state of affairs $\sim$	12 M.D
During the financial year, the Trust's investment in Bunnings Warehouse properties increased by \$102.7 million to \$569.3 million, increasing its portfolio of these properties to 50 at financial year end. The continuum state $\mathbb{Z}_{\geq 0}$
There were no other significant changes in the state of affairs of the Trust during the financial year.
Significant events after the balance date	i da a shekarar 1952 Kanadar wasan ƙwallon
No matters or circumstances have arisen since the end of the financial year that have significantly affected or may significantly affect the operations, results of magrations or state of affairs of the Trust in subsequent financial wears

Burnings Warehouse Property Yrust 2004 annual report

DIRECTORS' REPORT

Ear the year eaded 30 June 2004

Likely developments and expected results.

Likely developments in and expected results of the operations of the Trust in subsequent years are referred to elsewhere in this report, particularly on pages 7 to 11. In the opinion of the directors, further information on those matters could prejudice the interests of the Trust and has therefore not been included in this report.

Corporate governance

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Bunnings Property Management Limited support and have adhered to the principles of corporate governance. The responsible entity's corporate governance statement is contained on pages 16 to 18 of this annual report.

Environmental regulation and performance

The Trust's operations are not subject to any particular significant environmental regulations under either Commonwealth or State legislation. The Trust is not aware of any breach of environmental regulations.

Board committees

As at the date of this report, the responsible entity had an Audit and Risk Committee.

Rounding.

The amounts contained in this report and in the financial statements have been rounded to the nearest thousand dollars under the option available to the Trust under ASIC Class Order 98/0100.

Signed in accordance with a resolution of the directors of Bunnings Property Management Limited.

W H Cairns Chairman Bunnings Property Management Limited Perth, 6 August 2004

Bursings Warehouse Property Truct 2004 annual report

DIRECTORS' DECLARATION

.
For the year ended 30 Jane 2004 .

In accordance with a resolution of the directors of Bunnings Property Management Limited, responsible entity for the Bunnings Warehouse Property Trust (the Trust), I state that in the opinion of the directors;

41

Bursings Warehouse Property Trust 2004 annual report

(a) the financial statements and notes of the Trust are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Trust's financial position as at 30 June 2004 and of its performance for the year ended on that date; and and and all the

(ii) complying with Accounting Standards and Corporations Regulations 2001; and

(b) . there are reasonable grounds to believe that the frust will be able to pay its debts as and when they become due and payable.

For and on behalf of the board of Bunnings Property Management Limited.

W H Cairns Chairman Bunnings Property Management Limited Perth, 6 August 2004.

INDEPENDENT AUDIT REPORT TO THE UNITHOLDERS OF BUNNINGS WAREHOUSE PROPERTY TRUST

Scope

The financial report and directors' of Bunnings Property Management Limited responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for the Bunnings Warehouse Property Trust (the Trust), for the year ended 30 June 2004.

The directors of Bunnings Property Management Limited are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the Trust, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit of the financial report in order to express an opinion on it to the unitholders of the Trust. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent [imitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot quarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the Trust's financial position, and of its performance as represented by the results of its operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included;

• . examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
• states in the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report. These and our other procedures did not include consideration or judgment of the appropriateness or reasonableness of the business plans or strategies adopted by the directors of Bunnings Property Management Limited and management of the Trust.

Independence

We are independent of the Trust, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit opinion.

In our opinion, the financial report of the Bunnings Warehouse Property Trust is in accordance with:

(a) the Corporations Act 2001, including:

Bersings Warehouse Property Truct 2004 animal report

• (i) giving a true and fair view of the financial position of the Trust at 30 June 2004 and of its performance for the year ended on that date; and
• (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
• (b) other mandatory financial reporting requirements in Australia.

محديد محارض Ernst & Young G H Meyerowitz Partner Perth, 6 August 2004

UNITHOLDER INFORMATION

Substantial unitholders

The number of units held by the Trust's substantial unitholder as at 25 November 2002, being the date on which its last notice was lodged with the Trust:

Units 58,955,942

Distribution of unitholders

Wesfarmers Limited, its subsidiaries and their associates

As at 6 August 2004	Range of holding	Holders	Units
	1.000	774	430,090
	$1,001$ . $-$ $-5,000$	3,160	9,864,597	$3.4 - 1$
	$-5.001$ $^{\circ}$ 10.000 $^{\circ}$ $-$	2,996	22,421,199
	$10,001$ $-$ $\sim$ 100,000 .	4.566	98,478,527	33.4 .
	100.001 over	131	163,758,489	55.5
	Total	11.627	294.952.902	100.0
	Unitholders holding less than a marketable parcel (302 units)	-98	24.542

Unitholders holding less than a marketable parcel (302 units)

Voting rights

Each fully paid ordinary unit carries voting rights of one vote per unit.

Twenty largest unitholders and

The twenty largest holders of ordinary units in the Trust as at 6 August 2004 were: Wumber. of units	Percentage of . capital held
Wesfarmers Investments Pty Ltd. 65,744,461	22.3
J P Morgan Nominees Australia Limited 21,795,435	7.4
RBC Global Services Australia Nominees Pty Limited 7,468,447	2.5
Australian Foundation Investment Company Limited 7,300,000	2.5
Westpac Custodian Nominees Limited 6,558,493	2.2
National Nominees Limited 4,299,956	1.5
ANZ Nominees Limited 4,118,366	t.4
RBC Global Services Australia Nominees Pty Limited 3,119,694	1.1
Queensland Investment Corporation 3,029,633	-1.0
Djerriwarrh Investments Limited 2,550,000	0.9
Bond Street Custodians Limited (ENH Property Securities A/C) 2,272,181	0.8
Cogent Nominees Pty Limited 435,516	0.5
Kowloon Nominees Pty Limited ,304,442	0.4
Suncorp Custodian Services Pty Limited . 1,222,156	0.4
Cogent Nominees Pty Limited (SMP Accounts) 1,207,082	0.4
Citicorp Nominees Pty Limited 1,027,114	$0.3\,$
Argo Investments Limited 1,000,000	0.3
Mr Ronald William James Groghan 1,000,000	0.3
Invia Custodian Pty Limited. 785,452	0.3
Bond Street Custodians Limited (Property Securities A/C) 775,317	0.3
138.013.745 Total	46.8

Bursings Warehouse Property Yrusi 2004 annual report

43

DIRECTORY

44

Responsible entity

Bunnings Property Management Limited ABN 26 082 856 424 Level 11, Wesfarmers House 40 The Esplanade Perth WA 6000 Telephone: (08) 9327 4417 Facsimile: (08) 9327 4344 www.bunningspropertytrust.com.au

Directors and senior management

.
W.H. Cairns (Chairman)
P. J. Mansell (Director) R W McCuaig (Director). G.T.Tilbrook (Director) A J Hopkins (General Manager) A M Niardone (Secretary)

Registry...

Computershare Investor Services Pty Limited Level 2 45 St George's Terrace. Perth WA 6000 Telephone: (08) 9323 2000 Facsimile: (08) 9323 2033 Website: www.computershare.com.au

Auditor

Ernst & Young
Central Park 152 - 158 St George's Terrace Perth WA 6000

Bornings Warehouse Property Trust 2004 animal report

visit us at: www.bunningspropertytrust.com.au