BWP GROUP — Annual Report 2020

Aug 3, 2020

2 0 2 0 A N N U A L R E P O R T

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BWP TRUST ARSN 088 581 097 RESPONSIBLE ENTITY BWP Management Limited ABN 26 082 856 424 AUSTRALIAN FINANCIAL SERVICES LICENCE No. 247830

bwptrust.com.au

2 0 2 0 A N N U A L R E P O R T

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Contents

OVERVIEW

• 5 About us

• 6 Chairman’s message

• 8 2019/20 results highlights

BUSINESS REVIEW

• 9 Financial summary

• 10 Business approach

• 12 Managing Director’s report 17 Outlook

• 18 Our property portfolio

• 22 Sustainability

GOVERNANCE

24 Corporate governance 25 Board of Directors

FINANCIAL REPORT

27 Financial statements

INVESTOR INFORMATION

52 Investor information

53 Directory

4 BWP TRUST ANNUAL REPORT 2020

A B O U T U S

Established and listed on the Australian Securities Exchange (“ASX”) in 1998, BWP Trust (“BWP” or “the Trust”) is a real estate investment trust investing in and managing commercial properties throughout Australia.

The majority of the Trust’s properties are well located large format retailing properties, in particular, Bunnings Warehouses, leased to Bunnings Group Limited (“Bunnings”). Bunnings is the leading retailer of home improvement, outdoor living and lifestyle products in Australia and New Zealand, and a major supplier to project builders, commercial trades people, and the housing industry. The Trust is managed by an external responsible entity, BWP Management Limited (“the responsible entity”) which is appointed under the Trust’s constitution and operates under an Australian Financial Services Licence.

About this report

This annual report is a summary of the Trust’s operations, activities, and financial position as at 30 June 2020. Readers should refer to the details provided throughout this Annual Report and on the Trust’s website for additional information.

The responsible entity is solely committed to managing the Trust and is paid a quarterly fee based on the gross assets of the Trust.

Both Bunnings and the responsible entity are wholly-owned subsidiaries of Wesfarmers Limited (“Wesfarmers”), one of Australia’s largest listed companies. Wesfarmers, through one of its subsidiaries, also owns approximately 24.75 per cent of the issued units in the Trust.

Important Notice

This report contains statements regarding the future (“forwardlooking statements”) and statements of belief or opinion (“assumptions”). Words such as “believe”, “consider”, “could”, “expect”, “estimate”, “likely”, “may”, ”objective”, “should”, “plan”, “target”, and other similar expressions are intended to identify forward-looking statements or assumptions. While due care and attention has been used in preparing this report and the information it contains, forward-looking statements and assumptions are not guarantees of future performance or outcomes. Forward-looking

statements and assumptions involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the responsible entity and which may cause actual performance and outcomes to differ materially from those expressed or implied by the statements. Before making an investment decision or acting on the information in this report, you should make your own enquiries and seek your own professional advice as to the application of the information provided in this report to your particular investment needs, objectives and financial circumstances.

BWP TRUST ANNUAL REPORT 2020 5

C H A I R M A N ’ S M E S S A G E

On behalf of the Board of directors of BWP Management Limited, the responsible entity for BWP Trust, it is my pleasure to present the Trust’s annual report for the financial year ended 30 June 2020.

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TOTAL INCOME LIKE-FOR-LIKE RENTAL GROWTH $155.8m 2.4%

DISTRIBUTION PER UNIT (CENTS)

18.29

GEARING NET REVALUATION GAINS 19.7% $93.6m

NET TANGIBLE ASSETS PER UNIT $3.06

6 BWP TRUST ANNUAL REPORT 2020

“The Trust started the 2019/20 financial year with a strong balance sheet and a quality portfolio of property leased to Bunnings, and other national retailers. The Trust was well positioned for the challenges created by the global COVID-19 pandemic (“COVID-19”) in the second half of the year, which are ongoing.”

Throughout the financial year, Bunnings has been able to operate on an unrestricted basis from all of the properties leased from the Trust, as have the significant majority of the Trust’s other tenants. The Trust has leases with a small number of tenants such as gym operators that were subject to COVID-19 mandatory closure by Federal or State governments for some, or all, of March, April, May and June this year. A Code of Conduct was legislated in each state which stipulated how landlords and tenants should cooperate during this period. For tenants that qualified under the relevant Code of Conduct legislation, arrangements were put in place for the abatement of rent in accordance with legislation. Rent abatements totalling $435,886 were granted in the period ended 30 June 2020. The Trust received 98.8 per cent of rent due during the months of March to June this year, taking into account the COVID-19 impacts.

During the year, the Trust continued to improve its existing properties and for some properties in the portfolio, their alternative use potential. Construction work for the repositioning of the Hoxton Park and Port Macquarie properties that had been vacated by Bunnings, was completed, with a number of national retailers now trading from both locations. Upgrade work was completed at the Bunnings Villawood store and terms were agreed with Bunnings for the upgrade of the Croydon, Coburg and Port Melbourne stores. Options to extend leases were exercised for the Fountain Gate, Port Melbourne, Vermont South, Northland and Coburg stores. Planning approval was obtained for the re-zoning of the Trust’s Mindarie property to allow for a wide range of alternative uses.

No property assets were acquired or divested during the year.

For the year ended 30 June 2020, the assessed valuation of the Trust’s property portfolio increased by $93.6 million, a 4.0 per cent increase over the prior year portfolio valuation, reflecting the ongoing attractiveness of Bunnings Warehouse properties to investors.

The Trust generated a total unitholder return of 9.0 per cent for the year, and 14.0 per cent per annum for the 10 years ended 30 June 2020. This compares to the ASX All Ordinaries Accumulation Index which returned negative 7.2 per cent for the year, and 7.8 per cent per annum for the same 10 year period.

The Trust pays out 100 per cent of distributable profit every six months. Divestments and the repositioning of vacated properties can impact the amount of distributable profit available in any particular reporting period. For the year ended 30 June 2020, BWP has reported a full-year ordinary distribution of 18.29 cents per unit, an increase of 1.0 per cent on the previous year’s ordinary distribution paid.

The energy efficiency of the Trust’s property portfolio has continued to improve with 89 per cent of the portfolio now with LED lighting in one or more of the car park, nursery trading area, canopy trading area, or in the main store. Solar power generation is installed at 19 properties in the portfolio, with further installations planned.

In addition, a Tesla battery has recently been installed at the Trust’s Mandurah property to store surplus energy from the existing solar installation at that location. During the year the property generated substantially more energy than was used, with the surplus energy going back into the grid. The quantum of excess energy exceeds the energy utilised by the Trust elsewhere in the property portfolio.

For the 2020/21 financial year, the Trust’s primary focus is on filling any vacancies in the portfolio, progressing store upgrades, extending existing leases with Bunnings through the exercise of options, completion of market rent reviews, and the continued rollout of energy efficiency improvements at its properties.

Finally, I would like to acknowledge some changes to the Board of the responsible entity during the year.

In December 2019, we were delighted to welcome Alison Quinn to the Board as a non-executive director. Alison is an experienced director, CEO and executive, and has an extensive background in property development, aged care, banking and finance.

Rick Higgins retired from the Board on 4 February 2020. Rick joined the Board in 2007 and during his tenure provided invaluable advice in the development of the Trust and its portfolio of assets. We sincerely thank Rick for his contribution to the Board and wish him well for the future.

In closing, I would like to express my appreciation to my fellow directors and management for their efforts during the year and their response to what has been a rapidly evolving COVID-19 environment, and thank our unitholders for their continued support of the Trust.

Erich Fraunschiel Chairman BWP Management Limited

BWP TRUST ANNUAL REPORT 2020 7

2 0 1 9 / 2 0 R E S U L T S H I G H L I G H T S

• Final distribution of 9.27 cents, bringing the full-year ordinary distribution to 18.29 cents, up 1.0 per cent on the previous year

• Nine market rent reviews (including seven Bunnings Warehouse properties) finalised during the year with rents broadly in line with the market

• Like-for-like rental growth of 2.4 per cent for the 12 months to 30 June 2020, taking into account the average inflation on Consumer Price Index (“CPI”) linked leases of 1.6 per cent

• Weighted average lease expiry of 4 years at 30 June 2020, portfolio 98.0 per cent leased

• Net revaluation gains on the property investment portfolio of $93.6 million for the year

• Net tangible assets of $3.06 per unit at 30 June 2020 (2019: $2.92 per unit), up 4.8 per cent on the previous year

• Gearing (debt/total assets) 19.7 per cent at 30 June 2020

• Weighted average cost of debt of 3.4 per cent for the year, 3.0 per cent at year end

BWP TRUST TOTAL RETURNS COMPARED TO MARKET period ended 30 June 2020[1]

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15%
10.2
9.0 9.2 9.4
7.8
10% 6.2
5.4
4.4 4.7
3.3
2.0 2.3
5%
(7.2) (34.0) (21.3) (20.7) (11.5) (5.9)
0%
(5)%
(10)%
(15)%
BWP Trust
ASX All Ordinaries
(20)% Accumulation Index
S&P ASX 200 /
Retail A-REIT Index
(25)%
S&P/ASX 200 Property
Accumulation Index
(30)% S&P/ASX 300 Property
Accumulation Index
(35)%
ONE YEAR THREE YEARS [2] FIVE YEARS [2] TEN YEARS [2]
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1 Total returns include distributions and movement in price (assuming distributions are reinvested). Source: UBS Australia.

2 Annual compound returns.

8 BWP TRUST ANNUAL REPORT 2020

F I N A N C I A L S U M M A R Y

Year ended 30 June	2020	2019	2018	2017	2016
Total income $m Total expenses $m Proft before gains in fair value of investment properties $m Gains in fair value of investment properties $m Net proft $m Less: gains in fair value of investment properties $m Capital profts released from undistributed income reserve $m Distributable proft $m Distribution per ordinary unit interim cents fnal cents total cents Special distribution per unit cents Tax advantaged component % Total assets $m Borrowings $m Unitholders’ equity $m Gearing (debt to total assets) % Number of units on issue m Number of unitholders Net tangible asset backing per unit $ Unit price at 30 June $ Management expense ratio4 (annualised) %		156.3 (40.3)	153.4 (40.2)	152.5 (40.0)	150.2 (42.3)
	155.8
	(38.7)
	117.1	115.9	113.2	112.5	107.9
	93.6	53.4	69.91	111.3	202.6
	210.6	169.4	183.1	223.8	310.5
	(93.6)	(53.4) 0.52	(69.9)1 1.2	(111.3) -	(202.6) -
	0.4
	117.5	116.4	114.4	112.5	107.9
	9.02	8.93 9.18	8.78 9.03	8.63 8.88	8.29 8.50
	9.27
	18.29	18.11	17.81	17.51	16.79
	-	1.562 -3 2,382.3 412.7 1,874.6 17.3 642 20,667 2.92 3.68 0.62	- 15.55 2,369.5 457.6 1,833.0 19.3 642 23,694 2.85 3.25 0.60	- 22.29 2,312.8 471.1 1,762.1 20.4 642 23,158 2.74 2.98 0.60	- 25.44 2,200.5 472.3 1,645.4 21.5 642 24,021 2.56 3.64 0.64
	23.55
	2,552.6
	503.2
	1,968.7
	19.7
	642
	22,030
	3.06
	3.83
	0.64

Figures above are subject to rounding

1 Includes realised gain on disposal of investment properties of $2.5 million.

2 An additional $10.0 million of capital profits were released for the payment of the special distribution.

3 Due to capital gains arising from the divestment of four properties there were no tax deferred components in the 2019 financial year.

4 Expenses other than property outgoings and borrowing costs as a percentage of average total assets.

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TOTAL INCOME DISTRIBUTION PER UNIT NET TANGIBLE ASSET BACKING
($ m) (cents) ($ per unit)
Operating profits
156.3
155.8 Capital profits
3.06
18.11 18.29 2.92
153.4 17.81 2.85
17.51
152.5 16.79 2.74
2.56
150.2
FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20
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• DPU total of 18.11 cents excludes the 1.56 cents special distribution in the FY19 year.

9

BWP TRUST ANNUAL REPORT 2020

B U S I N E S S A P P R O A C H

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

The Trust’s main source of income is the rent paid by Bunnings and other customers for leasing their respective premises from the Trust. Rent is generally based on the area of the property leased by the customer, and does not have reference to the customer’s turnover at the premises. Growth in rental income typically comes from acquiring additional leased properties and from increases in rent from existing properties. Rents from existing properties grow as a result of annual rent increases and periodic market reviews in accordance with the lease. Rental growth may also occur with upgrades to existing properties, which increase the lettable area.

The main items of expense for the Trust are borrowing costs and the fee paid to the responsible entity for managing the Trust. The amount of borrowing costs relate to the level of borrowings the Trust has from time to time, and the interest rates and funding costs associated with those borrowings.

The level of management fee paid by the Trust depends on the value of the gross assets of the Trust over the period.

The Trust’s assets are predominantly comprised of its investment properties. Investment properties are revalued every six months to their fair value based on market conditions and the circumstances of each particular property. Changes in the fair value of properties as a result of revaluations are recorded as an unrealised revaluation gain or loss for the period and do not affect distributable profit. Borrowings to fund investment in properties are the Trust’s largest liability and typically represent 20 to 30 per cent of the value of the Trust’s total assets.

As required by the Trust’s constitution, the Trust distributes all its “profit attributable to unitholders of BWP Trust” as per the statutory accounts every six months, excluding unrealised movements in the fair value of investment properties, as well as other items as determined by the directors. In addition, at the directors’ discretion, capital profits arising from the sale of investment properties can be distributed in the year they are generated, or retained for future growth or to be distributed in future years.

Investment criteria

PREFERRED PROPERTY ATTRIBUTES

[Significant catchment area]

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• [ Visible and accessible from a ] major road, highway or freeway

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• [ Ready vehicle access and ] ample on-site parking

• [ Long-term occupancy and/or ] higher and better use potential

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• [ Leases to businesses with ] strong financial and value creation attributes

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[Geographic diversity]

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Yield commensurate with risk

OUR CORE VALUES

RESPECTFULRespectful

RESPONSIBLEResponsible RESOURCEFULResourceful We value simplicity and WE ARE PROFESSIONAL, HONEST We are professional, honest and WE VALUE SIMPLICITY AND WE we focus on achieving effective AND TRANSPARENT IN HOW WE transparent in how we operate FOCUS ON ACHIEVING EFFECTIVE and sustainable outcomes OPERATE AND SUSTAINABLE OUTCOMES

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WE SEEK MUTUALLY BENEFICIAL relationships with all stakeholders RELATIONSHIPS WITH ALL STAKEHOLDERS

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We make the most of opportunities

We treat others as We treat each other as we expect we expect to be treated to be treated We are committed to having a safe and We are committed to having a safe and inclusive work environment inclusive work environment

We make the most of opportunities We are financially focussed We are financially focused and make and make decisions based on decisions based on what creates value what creates value

We are accountable for our actions We are accountable for our actions We operate within the law We operate within the law

10 BWP TRUST ANNUAL REPORT 2020

Drivers of returns

Long-term value creation

Investment themes

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LARGE FORMAT RETAILING PROPERTY OWNERSHIP – HOME IMPROVEMENT / BUNNINGS FOCUS

Status as at 30 June 2020

• 241 hectares of land

75 properties

• 88 per cent of income from Bunnings

• 93 per cent of non-Bunnings income from national tenants

Priorities

Core portfolio of Bunnings Warehouse properties that meet Bunnings’ business model requirements, with annual rent increases and long duration of occupancy

ANNUAL RENTAL GROWTH

Status as at 30 June 2020

Approximately 57 per cent of the Trust’s rental income is subject to CPI adjustments

43 per cent is subject to fixed annual adjustments, other than in years in which respective properties are due for a market rent review

Priorities

Continue to focus on market rent review outcomes

PRO-ACTIVE MANAGEMENT OF EXISTING PROPERTIES

Status as at 30 June 2020

• Portfolio 98.0 per cent leased

• Two properties repositioned for large format retail

• One property is being repositioned for multi-tenanted industrial

• One property was re-zoned, and two properties being re-zoned for higher and better use

• Completed an upgrade of a Bunnings Warehouse

• Agreement to upgrade a further three Bunnings Warehouses

Priorities

Continue to optimise the value of all properties in the portfolio

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SUSTAINABLE PORTFOLIO RETURNS SUPPORTED BY BALANCE SHEET FLEXIBILITY

WELL PRICED ACQUISITIONS AND RE-INVESTMENT

PORTFOLIO GROWTH

Status as at 30 June 2020

Status as at 30 June 2020

Reviewed a number of acquisition opportunities during the year, none met return hurdle requirements

Status as at 30 June 2020

No acquisition opportunities met risk adjusted return requirements during the year

• 10.5 per cent annualised portfolio return on invested capital

Priorities

• 19.7 per cent gearing

Priorities

Acquisitions as and when value can be created

Priorities

Re-investment in existing portfolio, and acquisitions as and when it makes commercial sense to do so

Focus on long-term value creation by re-investing in and growing the core portfolio of Bunnings Warehouse properties, and from maximizing the alternative use prospects of a number of properties in the portfolio

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PROPERTY LOCATION ATTRIBUTES

COST OF FUNDING

EFFECTIVE MANAGEMENT OF THE TRUST AND ITS CAPITAL

Status as at 30 June 2020

Status as at 30 June 2020

Status as at 30 June 2020

S&P A- and Moody’s A3 rating re-affirmed

80 per cent metropolitan

Ten year average total unitholder return of 14.0 per cent per annum

A $50 million tap to the medium term note (bond) maturing in April 2026 was completed

• 20 per cent regional

40 per cent of metropolitan properties within 20 km of a central business district (“CBD”)

Priorities

Bank debt facility of $110 million with Commonwealth Bank of Australia extended for a further two years to July 2022

Secure and growing income stream > Long-term capital growth

Priorities

Well located properties in local communities, accessible, adjacent to other retail/ community facilities

Priorities

Continue to diversify funding and extend duration of debt

Re-zoning

Home improvement, supermarkets, activity/ experiences, residential, healthcare

BWP TRUST ANNUAL REPORT 2020 11

M A N A G I N G D I R E C T O R ’ S R E P O R T

Financial Results

INCOME AND EXPENSES

Total income for the full-year to 30 June 2020 was $155.8 million, down by 0.3 per cent from last year. Rental and other property income was largely in line with the previous year, with additional income of $2.7 million received this year from forfeited deposits relating to divestments that did not proceed. This amount offset rent foregone from divestments in the prior period, and for sites vacated by Bunnings that are being repositioned for alternative uses. During the year, the Trust granted rent abatements of $0.4 million for tenants affected by the COVID-19 shutdowns.

Finance costs of $15.5 million were 20.7 per cent lower than last year, due to a lower weighted average cost of debt. The weighted average cost of debt for the year (finance costs as a percentage of average borrowings) was 3.4 per cent, compared to 4.3 per cent for the previous year. The average level of borrowings was 0.8 per cent higher than the previous year ($461.9 million compared with $458.3 million).

Other operating expenses increased from $7.3 million in the previous year to $8.8 million in the current year, mainly as a result of significant increases in Victorian land tax and outgoings for properties in the process of being repositioned.

The management expense ratio for the year ended 30 June 2020 (expenses other than property outgoings and borrowing costs as a percentage of average total assets) increased from 0.62 per cent in the previous year to 0.64 per cent for the current year. The management expense ratio was lower in the prior period due to a management fee waiver on $75 million of gross assets which did not apply for the 2019/20 financial year.

PROFIT

Profit as disclosed in the Trust’s financial statements includes unrealised and realised gains or losses in the fair value of investment properties as a result of the revaluation of the entire property portfolio every six months (see revaluations section in Our property portfolio) and property divestments. The unrealised revaluation gains or losses are recognised as undistributed income as part of unitholders’ equity in the financial statements and do not affect the profit available for distribution to unitholders each period.

For the year ended 30 June 2020, net profit was $210.6 million, including $93.6 million in gains in the fair value of investment properties. This compares with net profit last year of $169.4 million which included gains of $53.4 million in the fair value of investment properties.

FINANCIAL POSITION

As at 30 June 2020, the Trust’s total assets were $2.6 billion (2019: $2.4 billion) with unitholders’ equity of $2.0 billion and total liabilities of $0.6 billion. Investment properties made up the majority of total assets comprising $2.5 billion (2019: $2.4 billion). Details of investment properties are contained in the Our property portfolio section at pages 18 to 21.

The underlying net tangible asset backing of the Trust’s units (“NTA”) as at 30 June 2020 was $3.06 per unit, an increase of 4.8 per cent from $2.92 per unit as at 30 June 2019. The increase in NTA was due to the increase in net assets through property revaluations and capital improvements.

DISTRIBUTION TO UNITHOLDERS

The Trust pays out 100 per cent of distributable profit each period, in accordance with the requirements of the Trust’s constitution.

A final distribution of 9.27 cents per ordinary unit has been declared and will be made on 21 August 2020 to unitholders on the Trust’s register at 5.00 pm (AEST) on 30 June 2020. The final distribution takes the total ordinary distributions for the year to 18.29 cents per unit (2019: 18.11 cents per unit).

CAPITAL MANAGEMENT

The Trust is committed to maintaining a strong investment grade rating (currently A-/Stable by Standard & Poor’s and A3/Stable by Moody’s) through appropriate capital and balance sheet management.

DEBT FUNDING

The Trust’s debt facilities as at 30 June 2020 are summarised below:

Bank debt facilities Westpac Banking Corporation Commonwealth Bank of Australia Sumitomo Mitsui Banking Corporation Corporate bonds Fixed term fve-year corporate bond Fixed term seven-year corporate bond	Limit $m	Amount drawn $m	Expiry date
	135.0 110.0 100.0 110.0 150.0	71.1 68.5 100.0 110.0 150.0	30 April 2022 31 July 2022 20 May 2024 11 May 2022 10 April 2026
Total	605.0	499.6

At the discretion of the Board, capital profits arising from the sale of investment properties can be distributed in the year they are generated, or retained for future growth or to be distributed in future years.

12 BWP TRUST ANNUAL REPORT 2020

DEBT MATURITY PROFILE AS AT 30 JUNE 2020 Volume ($m)

Bunnings is focused on long-term value creation with a consistent strategy for growth based on the strategic pillars of: lowest prices, widest range and best service.[1]

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300
63.9
200
71.1
100
41.5
150.0
110.0 100.0
68.5
0
FY21 FY22 FY23 FY24 FY25 FY26
Bonds Drawn bank facilities Undrawn bank facilities
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As at 31 December 2019, Bunnings had a network of approximately 273 Bunnings Warehouse stores across Australia and New Zealand, around 74 smaller format stores and 31 trade centres.[2]

For the six month period ended 31 December 2019, Bunnings Australia and New Zealand reported revenue of $7.28 billion, up 5.3 per cent on the previous corresponding period.[3] At the time Bunnings indicated the following progress on its strategic agenda:[4]

> EVEN STRONGER OFFER

• Eight new trading locations opened

• Eight store upgrades and expansions

• Continued range expansion and innovation

• Ongoing investment in customer value

• Assembly and installation offer expanded to 35 services

INTEREST RATE RISK MANAGEMENT

The Trust enters into interest rate swaps and fixed rate corporate bonds (hedging) to create certainty of the interest costs of the majority of borrowings over the medium to long term. As at 30 June 2020, the Trust’s interest rate hedging cover was 69.1 per cent of borrowings, with $85.0 million of interest rate swaps and $260.0 million of fixed rate corporate bonds, against interest bearing debt of $499.6 million. The weighted average term to maturity of hedging was 3.4 years.

• Product training delivered to more than 1,400 new category experts

• ACCELERATE TRADE GROWTH

• Growing engagement – over 700,000 active customers currently on PowerPass

• Expansion of product range and improved service

• Acquisition of Adelaide Tools (subject to regulatory approval)

> FUELLED BY DATA AND DIGITAL

Due to the accounting requirement to mark the value of interest rate swap hedges to market, the Trust’s hedging liabilities decreased to $2.8 million as at 30 June 2020 (2019: $3.8 million). The decrease in hedging liability during the year was due to the reduction in the average term to maturity of the interest rate swap profile.

GEARING

The Trust’s gearing ratio (debt to total assets) at 30 June 2020 was 19.7 per cent (2019: 17.3 per cent), which is slightly below the Board’s preferred range of 20 to 30 per cent. The lower gearing provides flexibility for the Trust to take advantage of investment opportunities to create long-term value when they arise. The interest cover ratio (earnings before interest /interest expense) was 8.6 times (2019: 6.8 times).

DISTRIBUTION REINVESTMENT PLAN

The Distribution Reinvestment Plan (DRP) was in place for both the interim distribution and final distribution for the year ended 30 June 2020. The Trust has continued to maintain an active DRP as a component of longer-term capital management and to allow unitholders flexibility in receiving their distribution entitlements. The DRP provides a measured and efficient means of accessing additional equity capital from existing eligible unitholders when required.

OPERATING ENVIRONMENT

As at 30 June 2020, approximately 87.9 per cent of the Trust’s annual rental income was from Bunnings and therefore the Trust’s earnings are linked to the ongoing success of the Bunnings business and the strength and direction of the underlying home improvement, outdoor living and lifestyle markets.

• Click and collect now available across Australia; click and deliver available in over 100 stores

• Bunnings MarketLink launched in November 2019

• Productivity and inventory optimisation enhanced by use of analytics

HOME IMPROVEMENT, OUTDOOR LIVING AND LIFESTYLE MARKET

Bunnings estimates the size of its addressable market in home improvement, outdoor living and lifestyle in Australia to be sales of $78 billion per annum.[5]

A number of factors drive the growth of the home improvement, outdoor living and lifestyle market including: household disposable income, renovation activity, housing churn, value and formation, weather, lifestyle and demographic trends and technology.

The market accounts for both consumer and commercial customer demand and includes: hardware and fixings, tools, plumbing, building materials and supplies, garden and landscaping supplies, lighting, paint, kitchen, laundry and bathroom supplies, gas appliances, floor and window coverings, outdoor furniture, storage and housewares. There is a wide array of competitors operating from a variety of different formats including: category specialists in plumbing, electrical, lighting, timber and garden supplies; hard goods mass merchants, traditional hardware retailers, suppliers direct-to-market, home improvement products sold in discount department stores and supermarkets, and large format home improvement retailers.

1 Source: Wesfarmers Strategy Briefing Day, 13 June 2019, page 25.

2 Source: Wesfarmers 2020 Half-year Results Briefing Presentation, 19 February 2020, page 53.

3 Source: Wesfarmers 2020 Half-year Results Briefing Presentation, 19 February 2020, page 22.

4 Source: Wesfarmers 2020 Half-year Results Briefing Presentation, 19 February 2020, page 24.

5 Source: Wesfarmers Strategy Briefing Day, 13 June 2019, page 26.

BWP TRUST ANNUAL REPORT 2020 13

RETAILING MARKET AND TRENDS

The Trust’s customers are predominantly sellers of retail goods or services in the home improvement, outdoor living and lifestyle, office supplies, outdoor leisure, automotive sales, and electrical and small appliances categories. Economic, technological, demographic and other trends that affect retailing generally, or certain aspects of retailing, may impact our customers from time to time. While the Trust’s rental income is not directly linked to the sales turnover of the retailers, difficult retailing conditions or structural changes in retailing can impact on the demand for retailing space, affecting market rents, and in some cases may affect the longer term viability of some retailers.

Retailing continues to evolve rapidly, in line with changing customer needs, and also changes in technology, online trading, supply chains and sourcing. Bunnings operates in the structurally attractive Australian home improvement market, which is underpinned by high home ownership levels. The Bunnings business model has proven over a long period of time its resilience and ability to evolve in the face of changing market conditions.

The quality of the Trust’s property investment portfolio, with its large, prominently located sites, with good accessibility and adjacency to other retail and community facilities, means that generally these should continue to be preferred locations for retailing or provide potential longer term alternative uses.

RISK CONSIDERATIONS

The Trust has a culture of balancing the commercial imperative of delivering a sustainable return to unitholders, with a strong focus on compliance and risk management, to meet the requirements of all stakeholders. The Trust is subject to high levels of regulatory oversight, in part because of the “related party” characteristics of the ownership structure, and the ASIC Australian Financial Services (“AFS”) licencing aspects of its underlying business/structure. The processes and systems required to support the compliance regime are an important aspect of the Trust’s approach to risk management, providing transparency and oversight at an operational level in the business. These are set out in a Compliance Plan, which is reviewed annually by the Board.

The key risk considerations are summarised below. The Trust does not consider there to be other specific social risks to which it is exposed, but remains vigilant in terms of broader retailing trends, and the business direction of its major customers.

COVID-19

The outbreak of COVID-19 globally and in Australia in the second half of the 2019/20 financial year was a significant risk event impacting the economy, how we work, how we conduct business and how we engage socially. While the measures implemented by the Federal and State Governments were effective in reducing the impact of the virus, there may be ongoing outbreaks of COVID-19 which will require further government response. It is not clear yet what will be the full impact on the Australian economy, and how long it will take to recover.

With a strong balance sheet, sufficient liquidity and a portfolio of well-located properties leased mainly to Bunnings and other national retailers, the Trust has been well-positioned to minimise the business impacts of COVID-19 so far. The Trust increased its available debt funding by $50 million in May this year to further increase available liquidity in the event of an extended shutdown of activity. Apart from those tenants that were required by the government to close their businesses (eg. gym operators) the Trust’s major tenants have been able to stay open and trade safely during the COVID-19 pandemic.

FINANCIAL RISKS

The Trust is well positioned from a financial risk perspective with the majority of its counter party exposure to Wesfarmers Limited (A- S&P rating, A3 Moody’s rating). The Trust’s assets comprise

a geographically diverse portfolio of large format retail properties, generally with long-term leases in place, 98.0 per cent leased at 30 June 2020 with a portfolio WALE of 4 years.

The Trust’s capital structure (preferred gearing range 20 to 30 per cent) takes into account the dynamics of the property investment portfolio, and the lease terms of each asset. The Trust actively seeks to diversify its sources of debt funding, currently through two domestic banks, one international bank and via the domestic medium term note market.

As at 30 June 2020, the Trust had a portfolio of 75 properties, limiting the financial impact of vacancies or decline in rent for any particular property. The key economic risk for the Trust relates to interest rate movements, the impact of this on property capitalisation rates, and the cost of debt funding. All investment proposals are evaluated in relation to longer term return objectives, which take into account interest rate cycles. The interest rate impact on debt funding is managed with Board approved levels of interest rate hedging.

CLIMATE-RELATED AND ENVIRONMENTAL RISKS

The geographic diversity of the Trust’s property portfolio limits its exposure to periodic localised climate related environmental events, such as flood and fire. The Trust reviews each property annually from a climate related risk perspective.

The Trust is progressing with the implementation of relevant Task Force on Climate-related Financial Disclosure recommendations with the current focus on climate risk scenario modelling.

The Trust undertakes detailed due diligence on property acquisitions to fully understand levels of site contamination, as well as potential for exposure to climate related events, prior to committing to purchase.

SOCIAL SUSTAINABILITY RISKS

The Trust recognises the significant importance of ensuring that people’s health and safety is not put at risk by its activities and operations. It has in place policies and practices to help identify health and safety risks and to manage those risks appropriately.

The responsible entity is currently engaging and working with suppliers to assess and address any exposure that the Trust might have to Modern Slavery risks.

CYBER RISKS

Cyber security is a rapidly evolving risk consideration, and is assessed by the Trust in terms of awareness of and preparedness for potential security breaches, and capability to respond. The Trust does not have critical information, safety critical automated systems, services vital to the national infrastructure or revenue linked to online transactions, for which a cyber security breach could be detrimental to its ongoing operations. The Trust’s primary exposure is limited to potential data breaches at various service providers. In this regard, the Trust engages with key service providers to ensure the risk of a data breach is minimised.

BWP’S OPERATIONS

Further information regarding the operations of the Trust is included in the Outlook, Our property portfolio, and Sustainability sections on pages 17 to 22.

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Michael Wedgwood Managing Director BWP Management Limited

14 BWP TRUST ANNUAL REPORT 2020

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BUNNINGS CAROLINE SPRINGS, VIC BWP TRUST ANNUAL REPORT 2020 15
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16 BWP TRUST ANNUAL REPORT 2020 BUNNINGS ARTARMON, NSW
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O U T L O O K

The time taken and strength of recovery of the Australian economy from the impacts of COVID-19, the financial implications of that for the Trust’s tenants, future investor demand for property, and the time and cost of repositioning vacant properties in the portfolio, are the variables that could have the most influence on the financial performance of the Trust in the near term.

Economic and property market conditions

The continuing economic uncertainty in relation to COVID-19 may require the Trust to grant further rent abatements and/or rent deferrals, especially to those tenants that qualified under the relevant Code of Conduct legislation. Factors including the length and timing of any mandatory closures and government mandated restrictions will influence the requirement to waive or defer further rent.

The ongoing evolution and financial performance of the Bunnings business and how that impacts the duration of occupancy of Bunnings at the Trust’s properties, the number of vacancies, and the higher and better use potential of properties in the Trust’s portfolio, will be more important for the Trust’s performance in the longer term.

For the year ended 30 June 2020, there continued to be strong investor demand for Bunnings Warehouse properties. This was driven by the low interest rate environment and the search by investors for running yields higher than interest rates, the strong Bunnings financial covenant, and relative risk of a Bunnings Warehouse investment, compared to other property or other asset classes.

The value of the Trust’s property portfolio at 30 June 2020 reflects the continuing strong market support for Bunnings Warehouse properties from an investment and risk perspective. The Trust will remain disciplined in its investment approach to ensure it is well placed to create value from any new property investments over the medium term.

Approximately 57 per cent of the Trust’s rental income is subject to CPI annual adjustment and 43 per cent is subject to fixed annual adjustment, other than in years in which respective properties are due for a market rent review (typically every five years for most of the Trust’s existing portfolio). The Trust will have lower incremental rental growth while CPI remains low, compared to historical levels.

For the year ending 30 June 2021, CPI reviews will apply to 48 per cent of the base rent, with leases subject to a market rent review comprising 19 per cent of the base rent, and with the balance of 33 per cent reviewed to fixed increases of three to four per cent.

Home improvement retail sector performance and growth

Bunnings reported 11.3 per cent year to date (to May 2020) total sales growth, comprising 5.8 per cent growth in the first half of the year, and 19.2 per cent growth in the second half of the year to May 2020.[1]

The strength and outlook for the home improvement, outdoor living and lifestyle market in Australia and the ongoing financial success of the Bunnings business is important for the future financial performance of the Trust.

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BUNNINGS MINCHINBURY, NSW
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1 Source: Wesfarmers Retail trading update, 9 June 2020, page 1.

BWP TRUST ANNUAL REPORT 2020 17

O U R P R O P E R T Y P O R T F O L I O

As at 30 June 2020 the Trust owned 75 investment properties, all within Australia, with a total value of $2.5 billion and a weighted average lease expiry of 4 years.

PORTFOLIO AT A GLANCE Bunnings Warehouses Bunnings Warehouse with other showrooms Large format retail showrooms Vacant properties	2020	2019	2018	2017	2016
	61	62 7 4 2	68 8 1 2	71 8 1 -	71 8 2 -
	7
	5
	2
Total BWP portfolio	75	75	79	80	81
Annual capital expenditure	$29.3m	$19.1m	$4.2m	$2.4m	$13.5m

Acquisitions and divestments

There were no properties acquired or divested during the year. Option agreements entered into in the prior year to divest two properties did not proceed as conditions precedent were not met.

Developments

COMPLETION OF EXPANSION OF BUNNINGS WAREHOUSE, VILLAWOOD, NEW SOUTH WALES

In November 2019, the expansion of the Villawood Bunnings Warehouse, New South Wales, was completed at a cost of $5.0 million. The annual rental increased by approximately $0.2 million. The parties have entered into a new seven year lease with four, five year options, exercisable by Bunnings. The rent will increase by a fixed three per cent per annum. At the end of the initial term and at the exercise of each option by Bunnings, the rent is subject to a market review. Market rent reviews are subject to a 10 per cent cap, meaning the rent cannot increase more than 10 per cent above the preceding year’s rent, (“10 per cent cap”) and a 10 per cent collar, meaning that the rent cannot fall more than 10 per cent below the preceding year’s rent (“10 per cent collar”).

COMPLETION OF REPOSITIONING OF EX-BUNNINGS WAREHOUSE HOXTON PARK, NEW SOUTH WALES

Following Bunnings’ surrender of lease in mid-2019, the Trust completed works totalling $13.0 million in March 2020 to reconfigure the Hoxton Park, New South Wales property for use as a large format retail centre. The property is 90 per cent leased and leases for the remaining tenancies are expected to be finalised in the current financial year.

COMPLETION OF REPOSITIONING OF EX-BUNNINGS WAREHOUSE PORT MACQUARIE, NEW SOUTH WALES

Following Bunnings’ surrender of lease in early 2019, the Trust completed works totalling $7.0 million in March 2020 to reconfigure the Port Macquarie, New South Wales property for

use as a large format retail centre. The property is 76 per cent leased and leases for the remaining tenancies are expected to be finalised in the current financial year.

Capital improvements

During the year, the Trust invested $1.5 million on LED lighting at various properties, and $0.4 million installing solar panels and a Tesla battery at the Mandurah property. Approximately $2.4 million was spent on various other improvements to the portfolio.

Capital commitments

COMMITMENT TO EXPANSION OF BUNNINGS WAREHOUSE, CROYDON, VICTORIA

In August 2019, the Trust committed to expand its Croydon Bunnings Warehouse, Victoria at a cost of $4.0 million. The annual rental will increase by approximately $0.3 million. Following completion of the expansion expected in mid-2021, the parties will enter into a new 10 year lease with one, 10 year option, exercisable by Bunnings. The annual rent will increase by CPI and market rent reviews are scheduled at the end of year 10, and year 15 should Bunnings exercise its option. Market rent reviews are subject to a 10 per cent cap, and a 10 per cent collar.

COMMITMENT TO EXPANSION OF BUNNINGS WAREHOUSE, COBURG, VICTORIA

In December 2019, the Trust committed to expand its Coburg Bunnings Warehouse, Victoria at a cost of $2.5 million. The annual rental will increase by approximately $0.1 million. Following completion of the expansion expected in early 2021, the parties will enter into a new 10 year lease with three, five year options, exercisable by Bunnings. The annual rent will increase by CPI. At the end of the initial term and at the exercise of each option by Bunnings, the rent is subject to a market review. Market rent reviews are subject to a 10 per cent cap, and a ten per cent collar.

18 BWP TRUST ANNUAL REPORT 2020

COMMITMENT TO EXPANSION OF BUNNINGS WAREHOUSE, PORT MELBOURNE, VICTORIA

In February 2020, the Trust committed to expand its Port Melbourne Bunnings Warehouse, Victoria at a cost of $6.6 million. The annual rental will increase by approximately $0.4 million. Following completion of the expansion expected in mid-2021, the parties will enter into a new 10 year lease with two, five year options, exercisable by Bunnings. The annual rent will increase by CPI and market rent reviews are scheduled at the end of year 10, and year 15 should Bunnings exercise its option. Market rent reviews are subject to a 10 per cent cap, and a five per cent collar, meaning that the rent cannot fall more than five per cent below the preceding year’s rent.

LIKE-FOR-LIKE RENTAL GROWTH

Excluding rental income from properties upgraded or vacated and re-leased during or since the previous corresponding period, rental income increased by approximately 2.4 per cent for the 12 months to 30 June 2020 (compared to 2.3 per cent for the 12 months to 30 June 2019).

The 13 unresolved market reviews at 30 June 2020 are not included in the calculation of like-for-like rental growth for the year.

Occupancy

As at 30 June 2020, the portfolio was 98.0 per cent leased.

Rent reviews

The rent payable for each leased property is increased annually, either by a fixed percentage or by the CPI, except when a property is due for a market review. Market reviews occur for most of the Trust’s Bunnings Warehouses every five years from the date of the commencement of the lease. The market rental is determined according to generally accepted rent review criteria, based on rents paid at comparable properties in the market.

ANNUAL ESCALATIONS

During the year, 87 leases in the portfolio had annual fixed or CPI increases, resulting in an average increase of 2.3 per cent in the annual rent for these properties.

MARKET RENT REVIEWS FOR BUNNINGS WAREHOUSE PROPERTIES

The market rent reviews that were due for two Bunnings Warehouses during the year ended 30 June 2018, one during the year ended 30 June 2019 and ten that were due during the year ended 30 June 2020 are still being negotiated or are being determined by an independent valuer and remain unresolved.

The market rent reviews completed during the year are shown in the following table.

BUNNINGS MARKET RENT REVIEW RESULTS SUMMARY

Property location	Passing rent ($ pa)	Market review ($ pa)	Variance (%)	Effective date
Belrose, NSW1,2 Balcatta, WA2,3 Coburg, VIC3,4 Tuggeranong, ACT2,3 Cannon Hill, QLD2,3 Bayswater, VIC2,3 Port Melbourne,VIC5	2,111,952 2,336,761 1,531,347 1,847,740 2,548,846 1,950,248 2,159,917	2,035,000 2,220,000 1,684,481 1,800,000 2,550,000 2,025,000 2,311,111	(3.6) (5.0) 10.0 (2.6) 0.0 3.8 7.0	9-Feb-18 23-Sep-18 3-Nov-18 1-Dec-18 1-Apr-19 21-Apr-19 17-Mar-20
Total	14,486,811	14,625,592	1.0

1 The market rent review was due during the year ended 30 June 2018, but the outcome was only finalised during the current financial year.

2 The market rent review was determined by an independent valuer.

It is the nature of the Bunnings business model that its property requirements for some locations change over time as is the case for nine properties in the property investment portfolio. These properties are highlighted in the portfolio rental summary that follows. In all cases, Bunnings has relocated or is in the process of relocating to a new nearby site in the same demographic area. For any Bunnings Warehouse, the Trust gives full consideration to re-leasing the property, reinvesting in it to enhance rental outcomes, or divesting it, to provide the best overall outcome for the Trust. Good progress is being made on finding alternative uses for these properties.

Property revaluations

The entire Trust portfolio was revalued at 31 December 2019 and again at 30 June 2020, including 32 property revaluations performed by independent valuers (18 at 31 December 2019 and 14 at 30 June 2020). Properties not independently revalued at each balance date are subject to internal valuations, with an independent valuer reviewing the methodology adopted. Factors that may affect the valuation of properties from time to time include: the supply of and competition for investment properties; leasing market conditions; the quality and condition of the particular property, including the duration of the lease; and the level of rent paid at the property compared with the broader market.

The value of the Trust’s portfolio increased by $126.0 million to $2,484.2 million during the year following capital expenditure of $29.3 million and revaluation gains of $93.6 million, after adjusting for the straight-lining of rent of $3.1 million.

The net revaluation gain was due mainly to growth in rental income and an average decrease in capitalisation rates across the portfolio during the year. The Trust’s weighted average capitalisation rate for the portfolio at 30 June 2020 was 6.08 per cent (December 2019: 6.08 per cent; June 2019: 6.30 per cent).

The fair value assessment of the Trust’s portfolio as at the reporting date includes the best estimate of the impacts of the COVID-19 pandemic using information available at the time of preparation of the financial statements and includes forward looking assumptions. In the event the COVID-19 pandemic impacts are more severe or prolonged than anticipated, this may impact the fair value of the Trust’s portfolio.

3 The market rent review was due during the year ended 30 June 2019, but the outcome was only finalised during the current financial year.

4 The market rent review was agreed between the parties at the 10 per cent cap in the lease.

5 The market rent review was agreed between the parties.

BWP TRUST ANNUAL REPORT 2020 19

O U R P R O P E R T Y P O R T F O L I O

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GROSS LETTABLE ASSET VALUE AREA BY STATE BY STATE ACT 2% ACT 2% NSW 20% NSW 21% QLD 26% QLD 25% SA 3% SA 3% VIC 27% VIC 33% WA 22% WA 16%

19 18 20 Locations Locations Locations Total Land Area: 63.9 ha Total Land Area: 55.6 ha Total Land Area: 68.7 ha QUEENSLAND NEW SOUTH WALES & VICTORIA AUSTRALIAN CAPITAL TERRITORY

16 2 75 Locations Locations Locations Total Land Area: 46.9 ha Total Land Area: 5.9 ha Total Land Area: 241.0 ha WESTERN AUSTRALIA SOUTH AUSTRALIA TOTAL

20 BWP TRUST ANNUAL REPORT 2020

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As at Gross As at Gross
30 June lettable Annual 30 June lettable Annual
2020 area [1] rental [2] Value 2020 area [1] rental [2] Value
Suburb sqm $000 $000 Suburb sqm $000 $000
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AUSTRALIAN CAPITAL TERRITORY Fyshwick6 6,648 1,286 24,300 Tuggeranong 11,857 1,830 31,800 Total 18,505 3,116 56,100 NEW SOUTH WALES Artarmon 5,746 1,705 29,700 Belmont North4 12,640 1,231 9,000 Belrose 8,888 2,107 36,600 Dubbo 16,344 1,629 24,000 Greenacre 14,149 2,869 47,800 Hoxton Park 25,607 3,002 58,500 Lismore 9,892 1,423 24,800 Maitland 12,797 1,452 22,300 Minchinbury 16,557 2,954 53,700 Port Macquarie 7,237 1,187 16,800 Rydalmere 16,645 3,355 67,000 Thornleigh 5,301 1,420 25,800 Villawood 12,678 1,926 35,000 Wagga Wagga4 13,774 1,566 14,000 Wallsend 16,863 2,220 38,600 Wollongong 10,811 1,470 23,500 Total 205,929 31,516 527,100 QUEENSLAND Arundel 15,676 2,531 40,900 Bethania 13,494 2,059 32,800 Brendale 15,035 2,177 38,400 Browns Plains 18,398 3,240 47,000 Cairns7 12,917 - 9,000 Cannon Hill 16,556 2,597 46,000 Fairfeld Waters 13,645 1,814 27,300 Gladstone 21,516 3,595 44,200 HerveyBay 11,824 1,347 16,800 ManlyWest 13,021 2,377 39,900 Morayfeld 12,507 1,895 30,500 Mount Gravatt 11,824 1,407 21,300 North Lakes 18,861 2,890 52,100 Rocklea 14,403 2,207 35,700 Smithfeld 13,094 1,696 25,300 Southport 12,431 1,778 27,200 Townsville North 14,038 1,845 29,700 Underwood7 12,245 - 16,400 West Ipswich 14,977 2,637 44,600 Total 276,462 38,092 625,100	SOUTH AUSTRALIA
	Mile End 15,065 2,505 43,500
	Noarlunga 14,784 1,582 25,300
	Total 29,849 4,087 68,800
	VICTORIA
	Bayswater 17,677 2,635 43,200
	Broadmeadows 12,765 2,041 33,900
	Caroline Springs 14,319 1,892 31,500
	Coburg 24,728 5,239 69,700
	Craigieburn 16,764 1,773 30,800
	Croydon 13,292 2,008 36,500
	Fountain Gate 12,624 1,760 30,600
	Frankston 13,843 2,156 37,500
	Hawthorn 7,462 3,381 53,700
	Maribyrnong 17,550 2,945 62,000
	Mentone 8,271 2,327 32,500
	Mornington 13,324 1,760 30,300
	Northland4 13,006 2,030 33,800
	Nunawading5 14,766 2,493 46,900
	Pakenham 14,867 2,120 33,100
	Port Melbourne 13,846 2,311 55,000
	Scoresby 12,515 1,986 33,100
	Springvale 13,458 2,209 40,200
	Sunbury 15,270 1,983 34,500
	Vermont South 16,634 2,297 39,600
	Total 286,981 47,346 808,400
	WESTERN AUSTRALIA
	Albany3,4 13,660 905 10,600
	Australind 13,700 1,449 24,200
	Balcatta 25,439 2,255 39,200
	Belmont 10,381 1,631 27,200
	Bibra Lake 14,141 1,758 29,300
	Cockburn 12,839 1,827 30,400
	Ellenbrook 15,337 2,048 34,100
	Geraldton 17,874 1,341 19,200
	Harrisdale 17,124 2,480 38,300
	Joondalup 13,358 1,168 16,100
	Mandurah 8,662 1,361 20,200
	Midland4 13,694 1,888 15,000
	Mindarie4 14,479 1,733 15,100
	Morley4 9,852 1,480 16,900
	Port Kennedy 11,675 1,716 27,400
	Rockingham 15,188 2,161 35,500
	Total 227,403 27,201 398,700

	As at 30 June 2020 Gross lettable area1 Annual rental2 Value Suburb sqm $000 $000
	Grand Total 1,045,129 151,358 2,484,200

Note: Totals and Grand Total adjusted for rounding

• 1 For Bunnings Warehouses this comprises the total retail area of the Bunnings Warehouse.

• 2 Annual rental figures do not include access fees detailed below.

• 3 Includes adjoining land (1.2 hectares) for which Bunnings Group Limited pays the Trust an access fee of $211,882 per annum.

• 4 Sites that Bunnings has or is in the process of vacating, that are still leased to Bunnings.

• 5 Includes adjoining properties (0.1 hectares) for which Bunnings Group Limited pays the Trust an access fee of $126,935 per annum.

• 6 Includes adjoining property (1.0 hectares) for which Bunnings Group Limited pays the Trust an access fee of $301,020 per annum.

• 7 Vacant property that is no longer leased to Bunnings.

BWP TRUST ANNUAL REPORT 2020 21

S U S T A I N A B I L I T Y

The Trust is committed to acting responsibly and ethically, and operating its business in a manner that is sustainable.

During the year, the Trust continued to focus on the energy efficiency of our properties and the replacement of ozone depleting air conditioning units in some of the older properties.

The Trust’s approach takes into account the size and nature of the Trust’s operations and the relatively modest actual or potential impacts on the environment and society.

Social and governance impacts are limited due to the passive nature and localised scope of the Trust’s operations and the regulated environment in which it operates.

Further detail on the Trust’s approach to sustainability is available in the Sustainability section, under the About Us tab, of the Trust’s website.

Environmentally, the Trust’s ownership and management of established commercial property is considered to be low in intensity in terms of emissions, waste, and use of energy and materials, and low impact on biodiversity.

Key sustainability actions

PROPERTY IMPROVEMENTS

PROGRESS DURING THE YEAR

• A further 14 air conditioning units were replaced to phase out ozone depleting refrigerant models and initiatives introduced to improve efficiency of air conditioning units. New non ozone depleting refrigerants were also retrofitted into larger air conditioning systems in one store owned by the Trust

• New energy efficient LED lights were installed internally in eight stores. As at 30 June 2020, 89 per cent of the Trust owned stores had LED lighting in one or more of the car park, nursery trading area, canopy trading area, or in the main store

• Solar power generation was installed at seven properties, bringing the total installations to 19

• A Tesla battery has been installed at one property. The battery stores surplus energy from the solar installation at the property

• 92 per cent of the Trust-owned stores have in place water tanks for the recycling of roof collected rain water

PRIORITIES

• Continue programme for phasing out ozone depleting air conditioning

CUSTOMER AND SUPPLIER ENGAGEMENT

PROGRESS DURING THE YEAR

• Continued dialogue with Bunnings regarding its sustainability initiatives, particularly in relation to reducing energy consumption through the upgrade of lighting in existing stores to energy efficient LED technology, and the installation of solar power generation

PRIORITIES

• Continue to engage with Bunnings and other tenants for a co-operative approach to sustainability initiatives, particularly in relation to LED lighting, and solar energy capture

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING

PROGRESS DURING THE YEAR

Participating in the 2020 Carbon Disclosure Project survey

PRIORITIES

• Continue reporting on our progress in improving the energy efficiency of our properties

• Continue to work with Bunnings and other tenants to roll out energy efficient LED lighting into existing properties, as and when appropriate, and also to install roof based solar panels on buildings where the energy saving benefits are significant

22 BWP TRUST ANNUAL REPORT 2020

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BUNNINGS MANLY WEST, QLD
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TESLA BATTERY MANDURAH
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BWP TRUST ANNUAL REPORT 2020 23

C O R P O R A T E G O V E R N A N C E

The responsible entity is committed to fostering a strong governance culture using a framework based on the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (“ASX Principles”).

Commitment to corporate governance

The Board of the responsible entity is responsible for ensuring a high standard of corporate governance and a culture of compliance in relation to the Trust. The governance framework is embedded in the Trust’s Compliance Plan and supported by detailed charters, policies and procedures that ensure the responsible entity fulfils its corporate governance obligations and responsibilities in the best interests of the Trust and its stakeholders.

The responsible entity’s corporate governance model is illustrated below.

ASX Principles and externally managed entities

The application of the ASX Principles is modified for externally managed listed entities such as the Trust. Some corporate governance disclosures apply to the responsible entity, which is not listed; some disclosures relate to the listed entity, BWP Trust; and some are not applicable. Wherever it is possible to provide additional disclosures that demonstrate the responsible entity’s commitment to a strong governance culture, these have been included in the Corporate Governance Statement.

Our compliance in 2020

Throughout the reporting year to 30 June 2020, the Trust’s governance arrangements complied with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd edition) as they apply to externally managed listed entities.

During the reporting year, a number of initiatives were implemented to ensure that the Trust’s governance arrangements would comply with the ASX Principles 4th edition for the current reporting period effective 1 July 2020. Board and committee charters and some policies and processes have been revised to ensure that they reflect the new requirements.

The charters and policies referred to in the Corporate Governance Statement are available on the Trust website.

The Trust’s 2020 Corporate Governance Statement can be viewed in the Corporate Governance section under the About Us tab of the Trust’s website.

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Responsible Entity Board
Remuneration & Audit & Risk
Nomination Committee Managing Director Committee
External service providers Internal service providers Independent Assurance
> External auditor
Trust Constitution Investment approach > Scheme compliance auditor
> Independent valuers
Compliance Plan Corporate Plan > Independent experts
> Environmental specialists
AFS License Risk management > External project managers
> Legal experts
Charters, policies & procedures Authorities framework
BWP TRUST
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24 BWP TRUST ANNUAL REPORT 2020

B O A R D O F D I R E C T O R S

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ERICH FRAUNSCHIEL

AGE: 74

BCom (Hons), FCPA, FAICD Chairman, Non-executive external director

Member of the Audit and Risk Committee Chairman of the Remuneration and Nomination Committee Joined the Board in February 2015 and was appointed Chairman in December 2015. A professional non-executive director since 2002, Erich has held board positions with a number of listed and unlisted companies.

Past directorships include Woodside Petroleum Limited, WorleyParsons Limited, Wesfarmers General Insurance Limited, Rabobank Australia Limited, Rabobank New Zealand Limited, West Australian Newspapers Holdings Limited and Foodland Associated Limited.

Until his retirement in 2002, Erich was a senior executive of Wesfarmers Limited, including Executive Director and Chief Financial Officer. Prior to this he was involved in investment banking, project lending and venture capital investment.

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MICHAEL WEDGWOOD

AGE: 57

B.Com, MSc (Finance), GAICD Managing Director

Appointed to the Board as Managing Director in February 2014.

Since joining Wesfarmers Limited in 1995, Michael has held a number of senior executive roles across the Wesfarmers Group including appointments as General Manager Finance at Wesfarmers for a period of five years and also as the Chief Financial Officer of Bunnings Group Limited for a period of nine years. Immediately prior to joining BWP, he held the role of Executive General Manager, Business Improvement for the Wesfarmers Group.

Before joining Wesfarmers, he held finance roles with the HSBC Group in Australia and Hong Kong, and prior to that with Arthur Andersen.

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AGE: 59

FIONA HARRIS

BCom, FCA, FAICD Non-executive external director

Chairman of the Audit and Risk Committee Member of the Remuneration and Nomination Committee Joined the Board in October 2012. A professional non-executive director for the past 25 years, Fiona has held board positions for over 25 companies covering a range of industries and geographies. She is a former member of the National Board and a former WA State President of the Australian Institute of Company Directors and a member of the Governance Committee for Chief Executive Women. Fiona is currently director of ASX listed company Oil Search Limited and unlisted companies Perron Group Limited and Linear Clinical Research Limited.

Past listed company directorships held in the last three years include Infigen Energy Limited Group. Fiona was previously a Sydney-based partner of chartered accountants, KPMG, retiring in December 1994.

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AGE: 68

TONY HOWARTH AO

CITWA, Hon.LLD (UWA), SF Fin, FAICD Non-executive director

Member of the Audit and Risk Committee Member of the Remuneration and Nomination Committee Joined the board in October 2012. Tony is a Life Fellow of the Financial Services Institute of Australasia and has more than 30 years’ experience in the banking and finance industry. He has held several senior management positions during his career, including Managing Director of Challenge Bank Limited and Chief Executive Officer of Hartleys Limited. Tony is a Director of ASX-listed company Coventry Group Ltd. He is also a director of Alinta Energy Pty Limited and a Fellow of AICD. He is an Adjunct Professor (Financial Management) at The University of Western Australia Business School and a former member of The University of Western Australia Business School Advisory Board (retired March 2018).

Past listed company directorships held in the last three years include Wesfarmers Limited (2007 to November 2019) and MMA Offshore Limited (Chairman) (retired November 2017).

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ALISON QUINN

AGE: 53

BCom, FAIM, FUDIA, MAICD Non-executive external director

Member of the Audit and Risk Committee

Member of the Remuneration and Nomination Committee Joined the Board in December 2019. Alison is an experienced director, CEO and executive with an extensive background in property development, aged care, banking and finance. Between 2016 and 2019, she was CEO of RetireAustralia, Australia’s largest private operator, developer and manager of seniors housing in Queensland, NSW and South Australia. Prior to that, she held a number of senior executive positions with entities including Aveo Limited, Growth Management Queensland and Mulpha Sanctuary Cove Developments.

She is a non-executive director of SunCentral Maroochydore Pty Ltd; a member of the Advisory Panel of Economic Development Queensland; and a member of the Brisbane City Council Infrastructure Council Advisory Committee.

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AGE : 61

MIKE STEUR

FAPI, FRICS, FPINZ, MAICD Non-executive external director

Member of the Audit and Risk Committee Member of the Remuneration and Nomination Committee Joined the Board in February, 2015. Mike, an experienced valuer by background, has over 30 years general property services experience covering all property types (including hotels, shopping centres and large format retail valuation and advisory), primarily in New Zealand and Australia, and more recently in Asia. Between 1988 and 2009, he was a director of Richard Ellis Ltd New Zealand (now CBRE). He moved to Sydney in 2001 to take control of CBRE’s Australian and New Zealand valuation and advisory business. His experience at CBRE also included strategic planning, business acquisitions, financial management, risk and compliance management and technology development. From 2009 to 2014, he was Executive Managing Director of CBRE’s Asia Pacific Valuation and Advisory services business.

Mike is a non-executive director of Dexus Wholesale Property Limited and he is the non-executive Chairman of Dexus Wholesale Funds Limited. He was a non-executive director of the New Zealand listed Kiwi Property Group Limited until his retirement from that board on 29 June 2020.

BWP TRUST ANNUAL REPORT 2020 25

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26 BWP TRUST ANNUAL REPORT 2020 BUNNINGS VILLAWOOD, NSW
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F I N A N C I A L S T A T E M E N T S

CONTENTS

CONTENTS
Statement of proft or loss and other comprehensive income	28
Statement of fnancial position	29
Statement of cash fows	30
Statement of changes in equity	31
Notes to the fnancial statements	32
Directors’ report	45
Directors’ declaration	48
Auditor’s independence declaration	48
Independent auditor’s report	49
Unitholder information	51

BWP TRUST ANNUAL REPORT 2020 27

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2020

Revenue Expenses Finance costs Responsible entity’s fees Other operatingexpenses	Note	June 2020 $000	June 2019 $000
	1 2 2 2		156,263 (19,582) (13,427) (7,315)
		155,781
		(15,519)
		(14,364)
		(8,820)
Total expenses		(38,703)	(40,324)
Proft before gains on investment properties Unrealisedgains in fair value of investmentproperties	5		115,939 53,438
		117,078
		93,564
Proft attributable to the unitholders of BWP Trust		210,642	169,377
Other comprehensive income/ (loss) Items that are or may be reclassifed subsequently to proft or loss: Effective portion of changes in fair value of cash fow hedges: -Realised losses transferred to proft or loss -Unrealised losses on cash fow hedges			1,080 (2,555)
		1,989
		(988)
Total comprehensive income for the year attributable to the unitholders of BWP Trust		211,643	167,902
Basic and diluted earnings (cents per unit)	11		26.37
		32.79

The statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

28 BWP TRUST ANNUAL REPORT 2020

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

ASSETS Current assets Cash Receivables andprepayments	Note	June 2020 $000	June 2019 $000
	3 4		17,911 6,211
		64,189
		4,188
Total current assets		68,377	24,122
Non-current assets Investmentproperties	5		2,358,200
		2,484,200
Total non-current assets		2,484,200	2,358,200
Total assets		2,552,577	2,382,322
LIABILITIES Current liabilities Payables and deferred income Distribution payable Derivative fnancial instruments	6 7		22,251 68,992 368
		18,286
		59,549
		363
Total current liabilities		78,198	91,611
Non-current liabilities Interest-bearing loans and borrowings Derivative fnancial instruments	8		412,712 3,405
		503,226
		2,408
Total non-current liabilities		505,634	416,117
Total liabilities		583,832	507,728
Net assets		1,968,745	1,874,594
EQUITY Equity attributable to unitholders of BWP Trust Issued capital Hedge reserve Undistributed income	9 10		945,558 (3,773) 932,809
		945,558
		(2,772)
		1,025,959
Total equity		1,968,745	1,874,594

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

BWP TRUST ANNUAL REPORT 2020 29

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2020

Cash fows from operating activities Rent received Payments to suppliers Payments to the responsible entity Finance income Finance costs	Note	June 2020 $000	June 2019 $000
			170,196 (27,158) (13,231) 501 (20,129)
		163,822
		(24,674)
		(14,007)
		153
		(15,620)
Net cash fows from operatingactivities	3	109,674	110,179
Cash fows from investing activities Receipts from forfeited deposits Receipts from the sale of investment properties Payments forpurchase of,and additions to,investmentproperties			- 69,793 (16,042)
		2,700
		-
		(29,675)
Net cash fows(used in)/from investingactivities		(26,975)	53,751
Cash fows from fnancing activities Proceeds from borrowings Repayments of borrowings Distributionspaid			199,659 (244,536) (115,372)
		90,514
		-
		(126,935)
Net cash fows used in fnancingactivities		(36,421)	(160,249)
Net increase in cash Cash at the beginningof the fnancialyear			3,681 14,230
		46,278
		17,911
Cash at the end of the fnancialyear	3	64,189	17,911

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

30 BWP TRUST ANNUAL REPORT 2020

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2020

Balance at 1 July2018	Issued capital $000 Hedge reserve $000 Undistributed income $000 Total $000
	945,558 (2,298) 889,789 1,833,049
Proft attributable to unitholders of BWP Trust Other comprehensive loss: Effectiveportion of changes in fair value of cash fow hedges	- - 169,377 169,377 - (1,475) - (1,475)
Total comprehensive income for theyear	- (1,475) 169,377 167,902
Distributions to unitholders	- - (126,357) (126,357)
Total transactions with unitholders of BWP Trust	- - (126,357) (126,357)
Balance at 30 June 2019 and 1 July2019	945,558 (3,773) 932,809 1,874,594
Proft attributable to unitholders of BWP Trust Other comprehensive income: Effectiveportion of changes in fair value of cash fow hedges
	- - 210,642 210,642
	- 1,001 - 1,001
Total comprehensive income for theyear	- 1,001 210,642 211,643
Distributions to unitholders
	- - (117,492) (117,492)
Total transactions with unitholders of BWP Trust	- - (117,492) (117,492)
Balance at 30 June 2020	945,558 (2,772) 1,025,959 1,968,745

The statement of changes in equity should be read in conjunction with the accompanying notes.

BWP TRUST ANNUAL REPORT 2020 31

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

BWP Trust (“the Trust”) is a for profit unit trust of no fixed duration, constituted under a Trust Deed dated 18 June 1998 as amended, and the Trust’s units are publicly traded on the Australian Securities Exchange. The Trust is managed by BWP Management Limited (“the responsible entity”). Both the Trust and the responsible entity are domiciled in Australia.

The Trust has a policy to invest in well located, geographically diversified properties with long-term leases to substantial tenants, predominantly in the large format retail sector, with the purpose of providing unitholders with a secure, growing income stream and capital growth.

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

ABOUT THIS REPORT

The financial report of the Trust for the year ended 30 June 2020 was authorised for issue in accordance with a resolution of the directors of the responsible entity on 4 August 2020. The directors have the power to amend and reissue the financial report.

The financial statements are a general purpose financial report which:

• has been prepared in accordance with the requirements of the Trust’s constitution, the Corporations Act 2001 , Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB);

• has been prepared on a historical cost basis, except for investment properties and derivative financial instruments, which have been measured at their fair value;

SIGNIFICANT JUDGEMENTS AND ESTIMATES

In applying the Trust’s accounting policies, management regularly evaluates judgements, estimates and assumptions based on experience and other factors, including expectations about future events that may have an impact on the Trust. Judgements and estimates which are material to the financial report are found in the following notes:

Note	5: Investmentproperties	Page 35 and 36
Note	12: Financial risk management	Page 42

OTHER ACCOUNTING POLICIES

Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding of the financial statements are provided throughout the notes to the financial statements.

SEGMENT INFORMATION

The Trust determines and presents its operating segment based on the internal information that is provided to the Managing Director, who is the Trust’s chief operating decision maker.

The Trust operates wholly within Australia and derives rental income from investments in commercial warehouse properties and as such this is considered to be the only segment in which the Trust is engaged.

The operating results are regularly reviewed by the Managing Director to make decisions about resources to be allocated and to assess performance. There are no reconciling items that exist between the discrete financial information reviewed by the Managing Director and the financial statements relating to revenue, profit or loss, assets and liabilities or other material items.

• is presented in Australian dollars, which is the Trust’s functional currency, and all values are rounded to the nearest thousand dollars ($000) under the option available to the Trust under ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191, unless otherwise stated;

• has been prepared by applying the following new standards, amendments and interpretations issued by the Australian Accounting Standards Board that are relevant to its operations:

• IFRS 16 Leases – This standard is effective for annual reporting periods beginning on or after 1 January 2019, with early adoption permitted. The Trust decided to early adopt this standard from 1 July 2018. Whilst the adoption of the new standard did not have a material impact on the Profit attributable to the unitholders of BWP Trust, the Trust is now required to straight-line rent for all leases with fixed rental increases. This results in a reclassification of income between rental income and unrealised gains and losses on investment properties. There is nil impact on the net assets of the Trust.

• does not early adopt a number of new standards, amendments to standards and interpretations that have been issued or amended but are not yet effective, other than those mentioned above. The potential impact of the new standards, amendments to standards and interpretations has been considered and they are not expected to have a significant effect on the financial statements.

32 BWP TRUST ANNUAL REPORT 2020

1. REVENUE

Rental income Less: rental abatements Other property income1 Finance income	June 2020 $000	June 2019 $000
	152,589	154,822
	(436)	- 940 501
	3,475
	153
Revenue	155,781	156,263

1 FY20 includes $2.7million of deposits forfeited from a third party, due to property sales that did not proceed.

The Trust has leases with a small number of tenants, such as gym operators, that were subject to COVID-19 mandatory closure by Federal and/or State governments for some, or all of March to June 2020. A Code of Conduct was legislated in each state which stipulated how landlords and tenants should cooperate during this period. For tenants that qualified under the relevant Code of Conduct legislation, arrangements were put in place for the abatement of rent in accordance with legislation. Rent abatements totalling $435,886 were granted in the period ended 30 June 2020.

Subsequent events – COVID-19

The continuing economic uncertainty in relation to COVID-19 may require the Trust to grant further rent abatements and/ or rent deferrals, especially to those tenants that qualified under the relevant Code of Conduct legislation. Factors including the length and timing of any mandatory closures and government mandated restrictions will influence the requirement to waive or defer further rent. This may also have a future impact on valuations.

Recognition and measurement

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 using the following criteria:

Rental and other property income

As required under the early adopted IFRS 16 Leases , rental income from operating leases is recognised on a straight-line basis over the lease term for leases that have fixed rental increases. Leases that are based on a variable future amount, including CPI linked rental increases, are only recognised when contractually due. As a result of this requirement an asset will be recognised to represent the portion of operating lease revenue in a reporting period relating to fixed increases in operating lease revenue in future periods. These assets will be recognised as a component of investment properties.

2. EXPENSES

2. EXPENSES
	June 2020 $000	June 2019 $000
		18,502 1,080
Interest expense on debt facilities	13,530
Interest expense on interest rate swaps	1,989
Finance costs	15,519	19,582
Responsible entity’s fees	14,364	13,427
Non-recoverable property costs1 Listing and registry expenses Meeting costs Other		6,512 544 - 259
	7,904
	523
	92
	301
Other operatingexpenses	8,820	7,315

1 Included in non-recoverable property costs are amounts paid or payable of $2,980,627 (2019: $2,650,238) for Queensland Land Tax which under the state legislation when the lease was entered into cannot be on-charged to tenants.

Recognition and measurement

Finance costs

Finance costs are recognised as an expense when incurred, with the exception of interest charges on funds invested in properties with substantial development and construction phases, which are capitalised to the property until such times as the construction work is complete.

The capitalisation rate used to determine the amount of finance costs to be capitalised is the weighted average interest rate applicable to the Trust’s outstanding borrowings during the year.

Responsible entity’s fees

The responsible entity, BWP 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 responsible entity may waive the whole or any part of the remuneration to which it would otherwise be entitled (see Note 15).

Finance income

Finance income is interest income on bank deposits and is recognised as the interest accrues.

BWP TRUST ANNUAL REPORT 2020 33

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

3. CASH

3. CASH
Cash at bank	June 2020 $000	June 2019 $000
		17,911
	64,189
Weighted average effective interest rates		1.59%
	0.50%

Reconciliation of operating profit to the net cash flows from operating activities:

Proft for the year attributable to unitholders of BWP Trust Net fair value change on investment properties Less: forfeited deposits received transferred to investing activities Decrease/(increase) in receivables and prepayments (Decrease)/increase in payables and deferred income	June 2020 $000	June 2019 $000
		169,377 (58,110) - (2,630) 1,542
	210,642
	(96,735)
	(2,700)
	1,188
	(2,721)
Net cash fows from operating activities	109,674	110,179

4. RECEIVABLES AND PREPAYMENTS

Receivables from Wesfarmers Limited1subsidiaries Other receivables Prepayments	June 2020 $000	June 2019 $000
		566 382 5,263
	195
	423
	3,570
	4,188	6,211

1 Wesfarmers Limited is a related party (see Note 15).

Recognition and measurement

Impairment

Receivables of $201,831 were overdue at 30 June 2020 (2019: $2,972).

An allowance for impairment in respect of receivables of $131,192 has been made during the current year (2019: nil). Based on historic default rates, the Trust believes that no other impairment allowance is necessary.

Recognition and measurement

Cash at bank

Cash in the statement of financial position, and for the purposes of the statement of cash flows, comprises cash at bank and short-term deposits. Cash at bank earns interest at floating rates based on daily bank deposit rates.

34 BWP TRUST ANNUAL REPORT 2020

5. INVESTMENT PROPERTIES

Reconciliation of the carrying amount of investment properties:

Balance at the beginning of the fnancial year Capital improvements during the year Straight-line lease income Net unrealised gains from fair value adjustments	June 2020 $000	June 2019 $000
		2,281,000 19,090 4,672 53,438
	2,358,200
	29,265
	3,171
	93,564
Balance at the end of the fnancial year	2,484,200	2,358,200

Recognition and measurement

Investment property is initially measured at cost and subsequently at fair value with any change therein recognised in profit and loss.

Subsequent revaluations to fair value according to the Trust’s revaluations policy may result in transaction costs appearing as a negative adjustment (loss) in fair value.

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. The Trust does not expect to be ultimately liable for CGT in respect of the sale of assets as all realised capital gains would be attributed to unitholders.

Fair value – Hierarchy

The Trust is required to categorise the fair value measurement of investment properties based on the inputs to the valuations technique used. All investment properties for the Trust have been categorised on a Level 3 fair value basis as some of the inputs required to value the properties are not based on “observable market data”.

Fair value – Valuation approach

KEY JUDGEMENT

The Trust has a process for determining the fair value of investment properties at each balance date, applying generally accepted valuation criteria, methodology and assumptions detailed below. Valuations are completed based on current market evidence at the date of each report, reflecting known criteria at that time and do not include unknown future impacts.

An independent valuer, having an appropriate professional qualification and recent experience in the location and category of property being valued, values individual properties every three years on a rotation basis. The independent valuer determines the most appropriate valuation method for each property (refer below).

In accordance with the Trust’s policy, the following properties were independently valued at 30 June 2020:

	Property	Valuation $000
	Australind	24,200
	Brendale	38,400
	Craigieburn	30,800
	Fountain Gate Hervey Bay	30,600 16,800
	Hoxton Park	58,500
	Maribyrnong	62,000
	Mentone	32,500
	Mile End	43,500
	Mindarie	15,100
	Morayfeld	30,500
	Noarlunga	25,300
	Villawood	35,000
	Wollongong	23,500

Properties that have not been independently valued as at balance date are carried at fair value by way of directors’ valuation.

The directors adopt the following valuation methodologies for all remaining properties, and these methodologies are subject to an independent review process by Jones Lang LaSalle.

BWP TRUST ANNUAL REPORT 2020 35

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

5. INVESTMENT PROPERTIES (CONTINUED)

Valuation Methodologies

Discounted cash flow

The discounted cash flow method calculates a property’s value by using projections of reliable estimates of future cash flows, derived from the term of any existing leases, and from external evidence such as current market rents for similar properties in the same area and condition, and using discount rates that reflect the current market assessments of the uncertainty in the amount and timing of cash flows specific to the asset.

Capitalisation of income valuation

The capitalisation of income valuation method capitalises the current rent received, at a rate analysed from the most recent transactions of comparable property investments. The capitalisation rate used varies across properties. Valuations reflect, where appropriate, lease term remaining, the relationship of current rent to the market rent, location, prevailing investment market conditions and for Bunnings Warehouses, distribution of competing hardware stores.

Inputs used to measure fair value Range of individual property inputs

Inputs used to measure fair value	Range of individualpropertyinputs
Adopted capitalisation rate	3.75% – 13.68%
Gross rentp.a($000)	905 – 4,748
Occupancyrate	98.0% as at 30 June 2020
Lease term remaining (years)	0.01 – 10.3

COVID-19

While the current economic climate and the impacts of the COVID-19 pandemic in the medium to long term are still uncertain, the assessment undertaken by the independent and directors’ valuations to determine the fair value of the Trust’s portfolio considers the impact of COVID-19. The valuation makes allowance for potential additional rent relief post 30 June 2020 that the Trust may be required to provide to tenants at each property, based on the Code of Conduct legislation in the respective state.

The fair value assessment of the Trust’s portfolio as at the reporting date includes the best estimate of the impacts of the COVID-19 pandemic using information available at the time of preparation of the financial statements and includes forward looking assumptions. In the event the COVID-19 pandemic impacts are more severe or prolonged than anticipated, this may impact the fair value of the Trust’s portfolio.

Leasing arrangements

The Trust has entered into commercial property leases on its investment portfolio with the majority of its properties being leased to Bunnings Group Limited (refer Notes 12 and 15).

Bunnings Warehouse leases generally commit the tenant to an initial term of 10, 12 or 15 years, followed by a number of optional terms of five or six years each exercisable by the tenant. Leases to non-Bunnings tenants generally commit the tenant to an initial term of between five and 10 years, followed by one or a number of optional terms of five years each exercisable by the tenant.

At 30 June 2020, the minimum lease expiry (being the duration until which the tenants’ committed terms expire) for the Trust’s investment properties is 0.01 years (2019: 0.3 years) and the maximum lease expiry is 10.3 years (2019: 10.6 years), with a weighted average lease expiry for the portfolio of 4 years (2019: 4.4 years).

Future minimum non-cancellable rental revenues are:

Not later than one year Later than one year not later than fve years Later than fveyears	June 2020 $000	June 2019 $000
		142,403 376,764 114,993
	140,541
	372,386
	89,789
	602,716	634,160

Recognition and measurement

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.

KEY JUDGEMENT

The Trust has determined that it retains all the significant risks and rewards of ownership of these properties and has thus classified the leases as operating leases.

The rental revenues of operating leases are included in the determination of the net profit in accordance with the revenue recognition policy at Note 1.

Leasing fees incurred in relation to the ongoing renewal of major tenancies are deferred and amortised over the lease period to which they relate.

Lease incentives, which may take the form of up-front payments, contributions to certain lessees’ costs, relocation costs and fit-outs and improvements, are recognised on a straight line basis over the lease term as a reduction of rental income.

36 BWP TRUST ANNUAL REPORT 2020

6. PAYABLES AND DEFERRED INCOME

Trade creditors and accruals Responsible entity’s fees payable Rent received in advance	June 2020 $000	June 2019 $000
		6,647 3,714 11,890
	5,378
	4,071
	8,837
	18,286	22,251

Recognition and measurement

Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not these have been billed to the Trust. These liabilities are normally settled on 30 day terms except for the responsible entity’s fees payable, which are settled quarterly in arrears, and retention monies withheld on construction projects which are settled according to the terms of the construction contracts.

The Trust’s exposure to liquidity risk in respect of payables is disclosed in Note 12.

7. DISTRIBUTIONS PAID OR PAYABLE

In accordance with the Trust’s constitution, the unrealised gains or losses on the revaluation of the fair value of investment properties, as well as other items as determined by the directors are not included in the profit available for distribution to unitholders. A reconciliation is provided below:

9.02 cents (2019: 8.93 cents) per unit, interim distribution paid on 21 February 2020 9.27 cents (2019: 9.18 cents) per unit, fnal ordinary distribution provided Nil (2019: 1.56 cents), fnal special distributionprovided	June 2020 $000	June 2019 $000
		57,365 58,971 10,021
	57,943
	59,549
	-
	117,492	126,357
Proft attributable to unitholders of BWP Trust Capital profts released from undistributed proft Net unrealised gains in fair value of investmentproperties		169,377 10,471 (53,438)
	210,642
	370
	(93,564)
Distributable proft for the year Opening undistributed proft Closingundistributedproft	117,448	126,410 4 (57)
	57
	(13)
Distributable amount	117,492	126,357
Distribution – ordinary (cents per unit) Distribution – special (centsper unit)		18.11 1.56
	18.29
	-

Recognition and measurement

Each reporting period the directors of the responsible entity are required to determine the distribution entitlement of the unitholders in respect of the period. Any amounts so determined but not paid by the end of the period, are recorded as a liability.

The recording of the distribution payable at each reporting date as a current liability may result in the Trust’s current liabilities exceeding its current assets. This is a timing issue, as the Trust repays its interestbearing loans and borrowings during the period from net profit and draws down its interest-bearing loans and borrowings when the distribution payments are made in August and February of each year.

BWP TRUST ANNUAL REPORT 2020 37

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

8. INTEREST-BEARING LOANS AND BORROWINGS

As at 30 June 2020 the Trust had the following borrowings:

Bank debt facilities Westpac Banking Corporation Commonwealth Bank of Australia Sumitomo Mitsui BankingCorporation		June 2020	June 2019
	Expirydate		Limit $000 Amount drawn $000
		Limit $000 Amount drawn $000
	30 April 2022 31 July 2022 20 May2024		135,000 44,600 110,000 58,000 100,000 100,000
		135,000 71,100
		110,000 68,500
		100,000 100,000
		345,000 239,600	345,000 202,600
Corporate bonds Fixed term fve-year corporate bond Fixed term seven-year corporate bond Accrued interest and borrowingcosts	11 May 2022 10 April 2026		110,000 110,000 100,000 100,000 112
		110,000 110,000
		150,000 150,000
		3,626
		260,000 263,626	210,000 210,112
		605,000 503,226	555,000 412,712

Recognition and measurement

The borrowings under the bank debt facilities are not secured by assets of the Trust, but are subject to reporting and financial undertakings by the Trust to the banks under negative pledge agreements with each bank. The Trust’s corporate bonds are also not secured by assets of the Trust, but are subject to similar reporting and financial undertakings as the bank debt facilities.

Interest-bearing loans and borrowings

All interest-bearing loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Fees paid on the establishment of loan facilities that are interest-bearing are included as part of the carrying amount of loans and borrowings.

Corporate bonds

On 11 May 2017, the Trust issued $110 million fixed rate domestic bonds maturing on 11 May 2022. Interest is payable semi-annually in arrears on the fixed rate domestic bonds, at 3.50 per cent per annum.

On 10 April 2019, the Trust issued $100 million fixed rate domestic bonds maturing on 10 April 2026. Interest is payable semi-annually in arrears on the fixed rate domestic bonds, at 3.30 per cent per annum. An additional $50 million was issued to this facility on 29 May 2020.

Borrowings are classified as non-current liabilities if the Trust has an unconditional right to defer settlement of the liability for at least 12 months after the balance date.

Refer to Note 12 for information on interest rate and liquidity risk.

At 30 June 2020 the minimum duration of the above debt facilities was 22 months (2019: 13 months) and the maximum was 69 months (2019: 81 months) with a weighted average duration of 38 months (2019: 43 months).

38 BWP TRUST ANNUAL REPORT 2020

9. ISSUED CAPITAL

9. ISSUED CAPITAL
Balance at the end of the fnancial year	June 2020 $000	June 2019 $000
		945,558
	945,558

During the period no new units were issued under the Trust’s distribution reinvestment plan, therefore the number of ordinary units on issue as at 30 June 2020 remained at 642,383,803 (2019: 642,383,803).

Recognition and measurement

Units on issue

Units on issue are 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.

Rights

The Trust is a unit trust of no fixed duration and the units in the Trust have no right of redemption.

Each unit entitles the unitholder to receive distributions as declared and, in the event of winding up the Trust, to participate in all net cash proceeds from the realisation of assets of the Trust in proportion to the number of and amounts paid up on units held.

Distribution Reinvestment Plan

The Trust operates a Distribution Reinvestment Plan (“DRP”). The DRP was in place for both the interim distribution and final distribution for the year ended 30 June 2020. An issue of units under the DRP results in an increase in issued capital unless the units are acquired on-market, which was the case during the financial year.

10. HEDGE RESERVE

Balance at the beginning of the fnancial year Effective portion of changes in fair value of cash fow hedges: -Realised losses transferred to proft or loss -Unrealised losses on cash fow hedges	June 2020 $000	June 2019 $000
		(2,298) 1,080 (2,555)
	(3,773)
	1,989
	(988)
Balance at the end of the fnancial year	(2,772)	(3,773)

Recognition and measurement

This reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge.

11. EARNINGS PER UNIT

Net earnings used in calculating basic and diluted earnings per unit ($000) Basic and diluted earnings per unit (cents) Basic and diluted earnings per unit excluding gains in fair value of investment properties (cents) Weighted average number of units on issue used in the calculation of basic and diluted earningsper unit	June 2020	June 2019
		169,377 26.37 18.05 642,383,803
	210,642
	32.79
	18.23
	642,383,803

Recognition and measurement

Earnings per unit

Basic earnings per unit is calculated as net profit attributable to unitholders divided by the weighted average number of units. The diluted earnings per unit is equal to the basic earnings per unit.

BWP TRUST ANNUAL REPORT 2020 39

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

12. FINANCIAL RISK MANAGEMENT

The Trust holds financial instruments for the following purposes:

Financing: to raise funds for the Trust’s operations. The principal types of instruments are term advances (“bank loans”) and corporate bonds.

Operational: the Trust’s activities generate financial instruments including cash, trade receivables and trade payables.

Risk management: to reduce risks arising from the financial instruments described above, including interest rate swaps.

The Trust’s holding of these instruments exposes it to risk. The Board of directors of the responsible entity has overall responsibility for the establishment and oversight of the Trust’s policies for managing these risks, which are outlined below:

credit risk (note 12(a));

liquidity risk (note 12(b)); and

interest rate risk (note 12(c)).

These risks affect the fair value measurement applied by the Trust, which is discussed further in note 12(e).

a) Credit risk

Credit risk is the risk of financial loss to the Trust if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Trust’s receivables from customers, cash, and payments due to the Trust under interest rate swaps.

Receivables

During the year the credit risk associated with 91.6 per cent (2019: 94.1 per cent) of the rental income was with four tenants:

Bunnings Group Limited1 Offceworks Superstores Pty Ltd1 Easy Auto 123 Pty Ltd Amart Furniture	June 2020 %	June 2019 %
		91.7 1.3 0.8 0.3
	87.9
	2.1
	0.8
	0.8

1 Wholly owned subsidiary of Wesfarmers Limited.

Bunnings Group Limited, Officeworks Superstores 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. Wesfarmers Limited has been assigned a credit rating of A-(Stable)/A2 by Standard & Poor’s (A3 (Stable)/P2 – Moody’s).

Cash

The Trust limits its exposure to credit risk associated with its cash by generally maintaining limited cash balances and having cash deposited with reputable, major financial institutions subject to regulation in Australia, which are rated A- or higher by Standard and Poor’s.

Derivative financial instruments

The Trust limits its exposure to credit risk associated with future payments from its interest rate swaps by contracting with reputable major financial institutions subject to regulation in Australia, which are rated A- or higher by Standard and Poor’s.

Exposure to credit risk

The carrying amount of the Trust’s financial assets represents the maximum credit exposure. The Trust’s maximum exposure to credit risk at the reporting date was:

Cash and short-term deposits Receivables Wesfarmers Limited subsidiaries Other tenants	Note	Carryingamount	Carryingamount
		June 2020 $000	June 2019 $000
	3 4 4		17,911 566 382
		64,189
		195
		423
		618	948
Total exposure		64,807	18,859

b) Liquidity risk

Liquidity risk is the risk that the Trust will not be able to meet its financial obligations as they fall due.

To assist in minimising the risk of having inadequate funding for the Trust’s operations, the Trust’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and corporate bonds with different tenures, with the Trust aiming to spread maturities to avoid excessive refinancing in any period. In respect to the Trust’s bank loans with the Commonwealth Bank of Australia and Westpac Banking Corporation, whilst these have fixed maturity dates, the terms of these facilities allow for the maturity period to be extended by a further year each year subject to the amended terms and conditions being accepted by both parties. The Trust also regularly updates and reviews its cash flow forecasts to assist in managing its liquidity.

Maturity of financial liabilities

The following are the contractual maturities of financial liabilities (including estimated interest payments) and receipts or payments of interest rate swaps. The amounts disclosed in the table below are the contractual undiscounted cash flows and hence will not necessarily reconcile with the amount disclosed in the statement of financial position.

40 BWP TRUST ANNUAL REPORT 2020

30 June 2020 Non-derivative fnancial liabilities Bank loans - principal Bank loans - future interest Corporate bonds Payables and deferred income Derivative fnancial liabilities Interest rate swaps	Carrying amount $000 Contractual cash fows $000 1 year $000 1-2 years $000 2-5 years $000 More than 5 years $000
	(239,600) (239,600) - (71,100) (168,500) -
	- (9,900) (3,368) (3,304) (3,228) -
	(263,626) (296,575) (8,800) (118,800) (14,850) (154,125)
	(18,286) (18,286) (18,286) - - -
	(2,772) (2,735) (1,861) (874) - -
	(524,284) (567,096) (32,315) (194,078) (186,578) (154,125)
30 June 2019 Non-derivative fnancial liabilities Bank loans - principal Bank loans - future interest Corporate bonds Payables and deferred income Derivative fnancial liabilities Interest rate swaps	(202,600) (202,600) - (58,000) (144,600) - - (13,658) (4,796) (1,995) (6,867) - (210,112) (244,650) (7,150) (7,150) (123,750) (106,600) (22,251) (22,251) (22,251) - - - (3,773) (3,819) (1,697) (1,522) (600) -
	(438,736) (486,978) (35,894) (68,667) (275,817) (106,600)

c) Interest rate risk

Interest rate risk is the risk that the Trust’s finances will be adversely affected by fluctuations in interest rates. To help reduce this risk in relation to bank loans, 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 effectively fixing the interest rate on the underlying obligations.

At 30 June 2020 the fixed rates varied from 0.66 per cent to 4.12 per cent (2019: 2.28 per cent to 4.92 per cent) and the floating rates were at bank bill rates plus a bank margin.

The Trust has a policy of hedging the majority of its borrowings against interest rate movements to ensure stability of distributions. At 30 June 2020, the Trust’s hedging cover (interest rate swaps and fixed rate corporate bonds) was 69.1 per cent of borrowings. This level is currently at the higher end of the Board’s preferred 50 per cent to 75 per cent range.

The Trust’s exposure to interest rate risk for classes of financial assets and financial liabilities is set out as follows:

Variable rate instruments Cash and short-term deposits Bank loans	Carryingamount	Carryingamount
	June 2020 $000	June 2019 $000
		17,911 (202,600)
	64,189
	(239,600)

THE TRUST’S SENSITIVITY TO INTEREST RATE MOVEMENTS

Fair value sensitivity analysis for fixed rate instruments

The Trust does not account for any fixed-rate financial assets or financial liabilities at fair value through the profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

The analysis below considers the impact on equity and net profit or loss due to a reasonably possible increase or decrease in interest rates. This analysis assumes that all other variables remain constant. The same comparative analysis has been applied to the 2019 financial year.

BWP TRUST ANNUAL REPORT 2020 41

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

12. FINANCIAL RISK MANAGEMENT (CONTINUED)

30 June 2020 Variable rate instruments Interest rate swaps	Impact on Netproft	Impact on Equity
	50 basis points increase $000 50 basis points decrease $000	50 basis points increase $000 50 basis points decrease $000
	(1,198) 1,198	- -
	425 (425)	448 (829)
Net impact	(773) 773	448 (829)
30 June 2019 Variable rate instruments Interest rate swaps	(1,013) 1,013 488 (488)	- - 962 (976)
Net impact	(525) 525	962 (976)

DERIVATIVE FINANCIAL INSTRUMENTS

As detailed on the previous page, the Trust enters into derivative financial instruments in the form of interest rate swap agreements, which are used to convert the variable interest rate of its borrowings to fixed interest rates. For the purpose of hedge accounting, these hedges are classified as cash flow hedges. The swaps are entered into with the objective of reducing the risk associated with interest rate fluctuations.

The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income and any ineffective portion is considered a finance cost and is recognised in profit or loss in the statement of profit or loss and other comprehensive income. The cumulative gain or loss previously recognised in other comprehensive income and presented in the hedging reserve in equity remains there until the forecast transaction affects profit or loss, at which point it is transferred to profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively.

The Trust manages its financial derivatives (interest rate swaps) to ensure they meet the requirements of a cash flow hedge.

d) Capital management

e) Fair values

The fair values and carrying amounts of the Trust’s financial assets and financial liabilities recorded in the financial statements are materially the same with the exception of the following:

Corporate bonds – book value Corporate bonds – fair value	June 2020 $000	June 2019 $000
		(210,112) (217,552)
	(263,626)
	(272,795)

The methods and assumptions used to estimate the fair value of financial instruments are as follows:

LOANS AND RECEIVABLES, AND PAYABLES AND DEFERRED INCOME

Due to the short-term nature of these financial rights and obligations, their carrying amounts are estimated to represent their fair values.

CASH AND SHORT-TERM DEPOSITS

The carrying amount is fair value due to the liquid nature of these assets.

BANK LOANS AND CORPORATE BONDS

Market values have been used to determine the fair value of corporate bonds using a quoted market price. The fair value of bank loans have been calculated by discounting the expected future cash flows at prevailing interest rates using market observable inputs.

INTEREST RATE SWAPS

Interest rate swaps are measured at fair value by valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly (Level 2).

KEY JUDGEMENT

Interest rates used for determining fair value

The interest rates used to discount estimated cash flows, where applicable, are based on current market rates for similar instruments and were as follows:

==> picture [235 x 36] intentionally omitted <==

----- Start of picture text -----

June 2020 June 2019
Interest rate swaps 0.15% to 0.65% 1.05% to 1.28%
----- End of picture text -----

Capital requirements are assessed based on budgeted cash flows, capital expenditure commitments and potential growth opportunities and are monitored on an ongoing basis. Information on capital and equity markets is reviewed on an ongoing basis to ascertain availability and cost of various funding sources.

In order to maintain a manageable level of debt, the responsible entity has established a preferred range of 20 to 30 per cent for the Trust’s gearing ratio (debt to total assets), which is monitored on a monthly basis. At 30 June 2020, the gearing level was 19.7 per cent (2019: 17.3 per cent).

The DRP was in place for the interim and final distributions for the year ended 30 June 2020.

42 BWP TRUST ANNUAL REPORT 2020

13. CAPITAL EXPENDITURE COMMITMENTS

Estimated capital expenditure contracted for at balance date, but not provided for in the financial statements, which is payable:

Not later than one year: Related parties Non-relatedparties	June 2020 $000	June 2019 $000
		5,000 10,150
	13,100
	-
	13,100	15,150

Capital commitments to related parties

CROYDON, VICTORIA

In August 2019, the Trust committed to expand its Croydon Bunnings Warehouse, Victoria, at a cost of $4.0 million.

COBURG, VICTORIA

In December 2019, the Trust committed to expand its Coburg Bunnings Warehouse, Victoria, at a cost of $2.5 million.

PORT MELBOURNE, VICTORIA

In February 2020, the Trust committed to expand its Port Melbourne Bunnings Warehouse, Victoria, at a cost of $6.6 million.

14. AUDITOR’S REMUNERATION

Audit and review of the fnancial statements KPMG Australia	June 2020 $	June 2019 $
		101,126
	102,462
Other services KPMG Australia – taxation services KPMG Australia – property consultancy services KPMG Australia – other accounting services		18,322 139,346 8,539
	45,085
	16,019
	-
Total auditor’s remuneration	163,566	267,333

Further details on the non-audit services can be found in the Directors’ report on page 47.

15. RELATED PARTY DISCLOSURES

a) Relationship with the Wesfarmers Group

As in the prior year, Wesfarmers Investments Pty Limited, a controlled entity of Wesfarmers Limited, holds 159,014,206 units in the Trust, representing 24.75 per cent of the units on issue at 30 June 2020.

b) Transactions with the Wesfarmers Group

During the year ended 30 June 2020, the Trust had the following transactions with Wesfarmers Group:

Bunnings Group Limited1 Rent and other property income Rent and other property income received in advance Amounts receivable Offceworks Superstores Pty Ltd1 Rent Amounts receivable BWP Management Limited1 Responsible entity fees Fees waived2 Wesfarmers Limited Insurancepremiumspaid/payable	June 2020 $	June 2019 $
		142,795,142 12,136,918 21,160 1,992,523 544,776 13,427,473 438,750 143,572
	135,259,176
	10,527,850
	23,345
	3,258,057
	171,971
	14,363,974
	-
	144,644

1 A controlled entity of Wesfarmers Limited.

2 The responsible entity waived its entitlement to fees in respect to $75 million of property valuation uplift in the prior financial year.

c) Economic dependency

90.0 per cent (2019: 93.0 per cent) of the Trust’s rental income received during the year was from Bunnings Group Limited and Officeworks Superstores Pty Ltd, all controlled entities of Wesfarmers Limited.

d) Other transactions

The Trust reimbursed Bunnings Group Limited for minor capital works and repairs and maintenance incurred to the Trust’s properties for which the Trust had a contractual obligation.

BWP TRUST ANNUAL REPORT 2020 43

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

16. DIRECTOR AND EXECUTIVE DISCLOSURES

a) Details of key management personnel

The following persons were key management personnel of the responsible entity, BWP Management Limited, during the financial year:

CHAIRMAN – NON-EXECUTIVE

Erich Fraunschiel

MANAGING DIRECTOR

Michael Wedgwood

NON-EXECUTIVE DIRECTORS

Fiona Harris Rick Higgins (retired 4 February 2020) Tony Howarth AO Alison Quinn (appointed 3 December 2019) Mike Steur

b) Remuneration policy

Remuneration expenses of the directors and executives of the responsible entity are not borne by the Trust. Directors are remunerated by the responsible entity and management services are provided to the responsible entity by Wesfarmers Limited.

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. The constitution is available on the Corporate Governance page of the Trust’s website.

For the financial year ended 30 June 2020, each director was entitled to director’s fees and/or superannuation for their services and the reimbursement of reasonable expenses.

The fees paid reflect the demands on, and the responsibilities of, those directors. The advice of independent remuneration consultants is taken to establish that the fees are in line with market standards. Directors do not receive option or bonus payments, nor do they receive retirement benefits in connection with their directorships. There are no equity incentive schemes in relation to the Trust.

Wesfarmers Limited employees seconded to the responsible entity to provide management services to the Trust are engaged in dedicated roles to act exclusively for the responsible entity on behalf of the Trust and are paid directly by Wesfarmers Limited. Short-term incentives paid by Wesfarmers Limited to employees engaged by the responsible entity are based entirely on the performance of the Trust and furthering the objectives of the Trust.

c) Unit holdings

Director	Balance at beginning of theyear Acquired during the year Sold during the year Balance at the end of theyear
Erich Fraunschiel Fiona Harris Rick Higgins Tony Howarth AO Alison Quinn Mike Steur Michael Wedgwood	111,766 - - 111,766 20,000 - - 20,000 20,000 - (20,000)1 - 20,000 - - 20,000 - - - - - - - - - - - -
Total	171,766 - (20,000) 151,766

1 Holding as at the date of retirement from the Board.

The above holdings represent holdings where the directors have a beneficial interest in the units of the Trust.

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.

17. OTHER ACCOUNTING POLICIES

a) Impairment

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

In circumstances where impairment losses are deemed, these are included in the statement of profit or loss and other comprehensive income.

b) Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (“GST”) except where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority. In these circumstances the GST is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from or payable to the taxation authority is included as part of receivables or payables in the statement of financial position.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

44 BWP TRUST ANNUAL REPORT 2020

DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2020

In accordance with the Corporations Act 2001 , BWP Management Limited (ABN 26 082 856 424), the responsible entity of BWP Trust, provides this report for the financial year that commenced 1 July 2019 and ended 30 June 2020. The information on pages 1 to 25 forms part of this directors’ report and is to be read in conjunction with the following information:

RESULTS AND DISTRIBUTIONS

Proft attributable to unitholders of BWP Trust Capital profts released from undistributed proft Net unrealised gains in fair value of investmentproperties	June 2020 $000	June 2019 $000
		169,377 10,471 (53,438)
	210,642
	370
	(93,564)
Distributable proft for the year Opening undistributed proft Closingundistributedproft	117,448	126,410 4 (57)
	57
	(13)
Distributable amount	117,492	126,357

DISTRIBUTIONS

The following distributions have been paid by the Trust or declared by the directors of the responsible entity since the commencement of the financial year ended 30 June 2020:

(a) Out of the profts for the year ended 30 June 2019 on ordinary units as disclosed in last year’s directors’ report: (i) Final distribution of 9.18 cents per ordinary unit declared by the directors for payment on 23 August 2019 (ii) Final special distribution of nil declared by the directors (2019: 1.56 cents per ordinary unit) (c) Out of the profts for the year ended 30 June 2020 (see Note 7 of the notes to the fnancial statements): (i) Interim distribution of 9.02 cents per ordinary unit paid on 21 February 2020 (ii) Final ordinary distribution of 9.27 cents per ordinary unit declared by the directors for payment on 21 August 2020	June 2020 $000	June 2019 $000
		58,007 10,021 57,365 58,971
	58,971
	-
	57,943
	59,549

UNITS ON ISSUE

At 30 June 2020, 642,383,803 units of BWP Trust were on issue (2019: 642,383,803).

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 2020, BWP Trust held assets to a total value of $2,552.6 million (2019: $2,382.3 million). The basis for valuation of investment properties which comprises the majority of the value of the Trust’s assets is disclosed in Note 5 of the notes to and forming part of the financial statements.

FEE PAID TO THE RESPONSIBLE ENTITY AND ASSOCIATES

Management fees totalling $14,363,974 (2019: $13,427,473) were paid or payable to the responsible entity out of Trust property during the financial year.

TRUST INFORMATION

BWP Trust is a Managed Investment Scheme registered in Australia. BWP Management Limited, the responsible entity of the Trust, is incorporated and domiciled in Australia and holds an Australian Financial Services Licence. The responsible entity’s parent company and ultimate parent company is Wesfarmers Limited.

The registered office of the responsible entity is Level 14, Brookfield Place Tower 2, 123 St Georges Terrace, Perth, Western Australia, 6000. The principal administrative office of the responsible entity is Level 12, Brookfield Place Tower 2, 123 St Georges Terrace, Perth, Western Australia, 6000.

The Trust had no employees during the financial year (2019: nil). Management services are provided to the responsible entity by Wesfarmers Limited. Wesfarmers Limited employees seconded to the responsible entity to provide management services to the Trust are engaged in dedicated roles to act exclusively for the responsible entity on behalf of the Trust and are paid directly by Wesfarmers Limited. Short-term incentives paid by Wesfarmers Limited to employees engaged by the responsible entity are based entirely on the performance of the Trust and furthering the objectives of the Trust.

BWP TRUST ANNUAL REPORT 2020 45

DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2020

DIRECTORS

Erich Fraunschiel (Chairman) Fiona Harris Rick Higgins (retired 4 February 2020) Tony Howarth AO Alison Quinn (appointed 3 December 2019) Mike Steur Michael Wedgwood (Managing Director)

Details of the current directors appear on page 25.

No director is a former partner or director of the current auditor of the Trust, at a time when the current auditor has undertaken an audit of the Trust.

Director	Units in the Trust
Erich Fraunschiel	111,766
Fiona Harris	20,000
Tony Howarth AO	20,000
Alison Quinn	-
Mike Steur	-
Michael Wedgwood	-

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.

COMPANY SECRETARY

Karen Lange, FGIA, FCIS, MBus

Karen Lange has been the company secretary since 9 April 2008. She has more than 30 years company secretarial experience including company secretary of Woodside Petroleum Limited and Wesfarmers Limited.

DIRECTORS’ UNITHOLDINGS

Units in the Trust in which directors had a relevant interest at the date of this report were:

INSURANCE AND INDEMNIFICATION OF DIRECTORS AND OFFICERS

During or since the end of the financial year insurance has been maintained covering the entity’s directors and officers against certain liabilities incurred in that capacity. Disclosure of the nature of the liability covered by the insurance and premiums paid is subject to confidentiality requirements under the contract of insurance.

To the extent permitted by law, 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.

No indemnity payment has been made under any of the arrangements referred to above during or since the end of the financial year.

==> picture [512 x 297] intentionally omitted <==

----- Start of picture text -----

BUNNINGS GREENACRE, NSW
----- End of picture text -----

46 BWP TRUST ANNUAL REPORT 2020

REVIEW AND RESULTS OF OPERATIONS

The operations of the Trust during the financial year and the results of those operations are reviewed on pages 6 to 17 of this report and in the accompanying financial statements. This includes information on the financial position of the Trust and its business strategies and prospects for future financial years.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

During the financial year, the value of the Trust’s investment properties increased by $126.0 million (2019: $5.5 million increase) to $2.5 billion (2019: $2.4 billion). The number of investment properties remained at 75 properties during the year.

There were no other significant changes in the state of affairs of the Trust during the financial year.

There were three Audit and Risk Committee and two Remuneration and Nomination Committee meetings held during the year.

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 Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191, unless otherwise stated. The Trust is an entity to which the Class Order applies.

AUDITOR INDEPENDENCE

The lead auditor’s independence declaration is set out on page 48 and forms part of the Directors’ report for the year ended 30 June 2020.

NON-AUDIT SERVICES

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

The continuing economic uncertainty in relation to COVID-19 may require the Trust to grant further rent abatements and/ or rent deferrals, especially to those tenants that qualified under the relevant Code of Conduct legislation. Factors including the length and timing of any mandatory closures and government mandated restrictions will influence the requirement to waive or defer further rent. This may also have a future impact on valuations.

Other than the matter above, no other matters or circumstances have arisen since the end of the financial year that have significantly affected or may significantly affect the operations, results of operations or state of affairs of the Trust in subsequent financial years.

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 6 to 17.

CORPORATE GOVERNANCE

In recognising the need for high standards of corporate behaviour and accountability, the directors of BWP Management Limited support and comply with the ASX Corporate Governance Principles and Recommendations as they apply to externally managed listed entities. The Corporate Governance Statement can be viewed in the Corporate Governance section under the “About Us” tab of the BWP Trust’s website.

KPMG provided the following non-audit services to the Trust during the year ended 30 June 2020 and received, or is due to receive, the following amount for the provision of these services:

Taxation services Propertyconsultancyservices	$45,085 $16,019
Total	$61,104

The Trust has had a long-standing working relationship with SGA consultancy group, and this entity was acquired by KPMG in 2014. Prior and post the acquisition, SGA has provided investigation, project management and advice on property rectification issues.

The Audit and Risk Committee has, following the passing of a resolution, provided the board with written advice in relation to the provision of nonaudit services by KPMG.

The Board has considered the Audit and Risk Committee’s advice, and the non-audit services provided by KPMG, and is satisfied that the provision of these services during the year by the auditor is compatible with, and did not compromise, the general standard of auditor independence imposed by the Corporations Act 2001 . The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants , as they did not involve reviewing or auditing the auditor’s own work or acting in a management or decision making capacity for the Trust.

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

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.

Erich Fraunschiel Chairman BWP Management Limited Perth, 4 August 2020

BOARD COMMITTEES

As at the date of this report, the responsible entity had an Audit and Risk Committee and Remuneration and Nomination Committee. Each committee is comprised of all of the non-executive directors of the responsible entity.

BWP TRUST ANNUAL REPORT 2020 47

DIRECTORS’ DECLARATION

FOR THE YEAR ENDED 30 JUNE 2020

AUDITOR’S INDEPENDENCE DECLARATION

FOR THE YEAR ENDED 30 JUNE 2020

In accordance with a resolution of the directors of BWP Management Limited, responsible entity for the BWP Trust (the Trust), I state that:

1. In the opinion of the directors:

2. (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 2020 and of its performance for the year ended on that date; and

   • (ii) complying with Accounting Standards and Corporations Regulations 2001 .

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

4. c) the financial statements also comply with International Financial Reporting Standards as disclosed on page 32.

5. This declaration has been made after receiving the declaration required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial period ended 30 June 2020.

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of BWP Management Limited, the responsible entity of BWP Trust

I declare that, to the best of my knowledge and belief, in relation to the audit of BWP Trust for the financial year ended 30 June 2020 there have been:

• (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

• (ii) no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Derek Meates Partner Perth, 4 August 2020

For and on behalf of the board of BWP Management Limited.

Erich Fraunschiel

Chairman BWP Management Limited Perth, 4 August 2020

48 BWP TRUST ANNUAL REPORT 2020

INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF BWP TRUST

FOR THE YEAR ENDED 30 JUNE 2020

Opinion

We have audited the Financial Report of BWP Trust (the Trust).

In our opinion, the accompanying Financial Report of the Trust is in accordance with the Corporations Act 2001 , including:

• giving a true and fair view of the Trust’s financial position as at 30 June 2020 and of its financial performance for the year ended on that date; and

• complying with Australian Accounting Standards and the Corporations Regulations 2001 .

The Financial Report comprises the:

• Statement of financial position as at 30 June 2020

• Statement of profit or loss and other comprehensive income, statement of changes in equity, and statement of cash flows for the year then ended

• Notes including a summary of significant accounting policies

• Directors Declaration.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.

We are independent of the Trust in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.

Key Audit Matter

The Key Audit Matter we identified is:

Valuation of Investment Property

A Key Audit Matter is one that, in our professional judgement, was of most significance in our audit of the Financial Report of the current period.

Valuation of Investment Property ($2,484m)

Refer to Note 5 to the Financial Report

The key audit matter

Valuation of investment properties is a key audit matter due to the:

• Significance of the balance to the financial statements (99% of total assets);

• Judgement required in assessing the selection of the capitalisation of income valuation method as the primary valuation methodology for the Trust’s investment properties from the three available methodologies under the accounting standards. This decision determines the inputs required for the valuation and is critical to the valuation adopted for each property.

• Sensitivity of the capitalisation rates to the projected income of individual properties in the valuation methodology. A small percentage movement in the capitalisation rate across the portfolio would result in a significant financial impact to the investment property balance and the income statement.

• Consideration of the economic impact of COVID-19 on valuations including leasing and rental relief assumptions. The investment property valuations were performed either internally by the directors or by the Trust’s external valuers.

How the matter was addressed in our audit

Our procedures included:

• Understanding the Trust’s process regarding the valuation of investment property, including specific considerations of the impact of COVID-19.

• We assessed the competency of both the Trust’s external valuers and the directors involved in undertaking the directors’ (i.e. internal) valuation by gaining an understanding of their experience and qualifications.

• We assessed the appropriateness of the valuation methodology utilised, being the capitalisation of income method, based on the accepted industry practices, the nature of the properties and consistency with accounting standards. We compared the valuations to the alternate discounted cash flow method valuation prepared by the external valuers and the directors’ valuation.

• We involved KPMG Real Estate Specialists to evaluate a sample of external valuations and the director’s internal valuation using their valuation skills and market knowledge, to compare recent sales evidence and other published reports of industry commentators including consideration of COVID-19 impacts.

• We, in conjunction with our KPMG Real Estate Specialists, questioned the capitalisation rates applied to specific properties based on our knowledge of the property portfolio and published reports of industry commentators. We also tested, on a sample basis, other key inputs to the valuations such as gross rent, occupancy rate, lease term remaining and CPI, for consistency to existing lease contracts or published statistics.

• We assessed the appropriateness of the Trust’s leasing and rental relief assumptions with consideration of the industry sector of the Trust’s tenants.

• We assessed the disclosures in the financial report, using our understanding obtained from our testing, against accounting standards requirements.

This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

BWP TRUST ANNUAL REPORT 2020 49

INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF BWP TRUST (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2020

Other Information

Other Information is financial and non-financial information in BWP Trust’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.

Responsibilities of the Directors for the Financial Report

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and

• to issue an Auditor’s Report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report.

A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our Auditor’s Report.

The Directors are responsible for:

• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001

• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error

KPMG

Derek Meates Partner Perth, 4 August 2020

assessing the Trust’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Trust or to cease operations, or have no realistic alternative but to do so.

50 BWP TRUST ANNUAL REPORT 2020

UNITHOLDER INFORMATION

FOR THE YEAR ENDED 30 JUNE 2020

SUBSTANTIAL UNITHOLDERS

The number of units held by the Trust’s substantial unitholders and the date on which the last notice was lodged with the Trust, were as follows:

TWENTY LARGEST UNITHOLDERS

The twenty largest holders of ordinary units in the Trust as at 21 July 2020 were:

follows:
						Number of	Percentage of
		Date of notice		Units		Units	capital held
Wesfarmers Limited, its subsidiaries and their associates 9 September 2013				151,863,632	Wesfarmers Investments Pty Ltd	159,014,206	24.75
The Vanguard Group Inc, and their associates		21	May2020	52,018,423	HSBC Custody Nominees (Australia) Limited	102,294,399	15.92
					JP Morgan Nominees Australia
					Pty Limited	78,397,459	12.20
DISTRIBUTION OF UNITHOLDERS					Citicorp Nominees Pty Limited	36,510,654	5.68
As at 21 July 2020					BNP Paribas Nominees Pty Ltd
						11,938,058	1.86
Range of holding	Holders		Units	%	National Nominees Limited	10,202,395	1.59
1 – 1,000	4,675		2,001,505	0.31	Citicorp Nominees Pty Limited	6,007,966	0.94
1,001 – 5,000	7,589		21,512,406	3.35	BNP Paribas Noms Pty Ltd	3,397,899	0.53
5,001 – 10,000	4,236		31,477,305	4.90	Netwealth Investments Limited
10,001 – 100,000	5,379	131,309,904		20.44		2,409,019	0.38
100,001 – over	188	456,082,683		71.00	BNP Paribas Nominees Pty Ltd	1,334,576	0.21
Total	22,067	642,383,803		100.00	Djerriwarrh Investments Limited	1,275,000	0.20
Unitholders holding less than a					Craigieburn Property Holdings Pty Ltd	1,104,500	0.17
marketable parcel					Netwealth Investments Limited
(128 units)	946		25,876			1,051,163	0.16
					Nulis Nominees (Australia) Limited
VOTING RIGHTS					Ecapital Nominees Pty Limited	1,025,498	0.16
Each fully paid ordinary unit carries voting rights at one vote per unit.						974,497	0.15
					HSBC Custody Nominees (Australia)
					Limited <NT-COMNWLTH Super
					Corp A/C>	909,451	0.14
					Lymal Pty Ltd	906,798	0.14
					BNP Paribas Noms (NZ) Ltd	905,800	0.14
					Sonice Pty Limited	883,737	0.14
					Hastings Property Holding Pty Ltd
						773,000	0.12
					Total top20 holders	421,316,075	65.59
					Total remainingholders balance	221,067,728	34.41

BWP TRUST ANNUAL REPORT 2020 51

I N V E S T O R I N F O R M A T I O N

FOR THE YEAR ENDED 30 JUNE 2020

STOCK EXCHANGE LISTING

The BWP Trust is listed on the Australian Securities Exchange (“ASX’) and reported in the “Industrial” section in daily newspapers – code BWP.

ANNUAL TAX STATEMENTS

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

DISTRIBUTION REINVESTMENT PLAN

The Distribution Reinvestment Plan was in place for both the interim and final distributions for the year ended 30 June 2020.

PROFIT DISTRIBUTIONS

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

ELECTRONIC PAYMENT OF DISTRIBUTIONS

All distributions to unitholders in Australia are by direct credit only to the unitholder’s nominated account.

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 either by an electronic or mailed payment advice.

Unitholders wishing to take advantage of payment by direct credit can provide their banking instructions online by logging onto www.investorcentre.com/au. Alternatively, unitholders can request the relevant forms by contacting the registry.

UNITHOLDER ENQUIRIES

Please contact the Registry Manager if you have any questions about your unitholding or distributions.

COMPLAINTS HANDLING

Complaints made in regard to BWP Trust should be directed to the Managing Director, BWP Management Limited, Level 14, Brookfield Place Tower 2, 123 St Georges Terrace, Perth, Western Australia, 6000. The procedure for lodgement of complaints and complaints handling is set out under the Contact Us tab of the BWP Trust website at bwptrust.com.au.

PUBLICATIONS

EXTERNAL DISPUTES RESOLUTION

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 ASX covering matters of relevance to investors.

WEBSITE

The Trust’s website, bwptrust.com.au provides information on each property in the portfolio, and an overview of the Trust’s approach to investment, corporate governance and sustainability. The site also provides unit price information and access to annual and half-year reports and releases made to the ASX.

Should a complainant be dissatisfied with the decision made by the responsible entity in relation to a complaint, the complainant is entitled to lodge a dispute with the Australian Financial Complaints Authority (AFCA), an independent external dispute resolution (EDR) scheme authorised by the Minister for Revenue and Financial Services to deal with complaints from consumers in the financial system. AFCA can be contacted by telephone on 1800 931 678 (free call), by email to info@afca.org.au, by fax to (03) 9613 6399, by mail addressed to Australian Financial Complaints Authority Limited, GPO Box 3, Melbourne VIC 3001, or by visiting their website at www.afca.org.au.

52 BWP TRUST ANNUAL REPORT 2020

D I R E C T O R Y

FOR THE YEAR ENDED 30 JUNE 2020

RESPONSIBLE ENTITY

BWP Management Limited ABN 26 082 856 424

Level 14, Brookfield Place Tower 2 123 St Georges Terrace PERTH, WA, 6000 Telephone: (+61 8) 9327 4356 Facsimile: (+61 8) 9327 4344

bwptrust.com.au

DIRECTORS

Erich Fraunschiel (Chairman) Michael Wedgwood (Managing Director) Fiona Harris Tony Howarth AO Alison Quinn Mike Steur

REGISTRY MANAGER

Computershare Investor Services Pty Limited

Level 11, 172 St Georges Terrace PERTH, WA, 6000 Telephone: 1300 136 972 (within Australia) Telephone: (+61 3) 9415 4323 (outside Australia) Facsimile: 1800 783 447 (within Australia) Facsimile: (+61 3) 9473 2555 (outside Australia)

computershare.com.au

AUDITOR

KPMG

235 St Georges Terrace PERTH, WA, 6000

COMPANY SECRETARY

Karen Lange

BWP TRUST ANNUAL REPORT 2020 53

54 BWP TRUST ANNUAL REPORT 2020 BUNNINGS RYDALMERE, NSW

2 0 2 0 A N N U A L R E P O R T

bwptrust.com.au

This Annual Report is printed on Pacesetter Laser SPI Digital, a PEFC certified paper containing 30% recycled fibre. Publication design: gallowaydesign.com.au

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