BWP GROUP — Interim / Quarterly Report 2004

Feb 12, 2004

13 February 2004

Solid Interim Results, Rent Reviews & Revaluations

The Directors of Bunnings Property Management Limited, the responsible entity for the Bunnings Warehouse Property Trust, today announced a profit of \$14.9 million for the half-year ended 31 December 2003, an increase of 23 per cent on the profit of \$12.1 million earned in the comparative period last year.

Total income for the period was \$21.1 million, up by 30 per cent from last year's \$16.2 million due to additional income received from three new property developments and a new development site, the programmed rental escalation of a number of properties in the portfolio, and market rent reviews that were completed on 10 properties.

Interim distribution

An interim distribution of 5.51 cents per ordinary unit has been declared, which exceeds the 5.15 cents per unit un the previous comparative period and the forecast of 5.41 cents per unit released to the Australian Stock Exchange in December 2003.

The difference is due largely to a number of market rent reviews, determined after the release of the estimate.

New units issued as a result of the 2003 unit purchase plan do not qualify for an interim distribution, however they rank equally with ordinary units from 1 January 2004. Interim distributions will be made on 25 February 2004 to unitholders on the Trust's register as at 5.00 pm on 31 December 2003.

The estimated tax advantaged component of the distribution is 27.27 per cent.

The directors have determined that the discount on units available under the Distribution Reinvestment Plan of the Trust will remain at 2.5 per cent for this distribution, resulting in an issue price of \$1.53.

Finance

As at 31 December 2003 the Trust's total assets had grown to \$501.8 million with unitholders' equity of \$341.3 million and total liabilities of \$160.5 million.

The Trust's gearing ratio (debt to total assets) at 31 December 2003 was 28.0 per cent, and within the preferred range of 20 to 40 per cent.

At 31 December 2003, 98 per cent of the Trust's interest bearing debt was hedged. The average interest rate paid on debt excluding margins for the six month period was 5.7 per cent.

Property acquisitions and developments

During the half-year, the Trust acquired a development site at Maitland in the Hunter Valley region of New South Wales. Development work commenced on site during the period.

The Trust also completed Bunnings Warehouse developments at Rocklea in Brisbane and at Port Macquarie in New South Wales, and a distribution centre for Bunnings at Hemmant, in Brisbane. Capital expenditure on the three developments was \$23.1 million.

Acquisition and development of these properties is consistent with the responsible entity's strategy of acquiring properties with long term leases to substantial tenants, ensuring that the properties are well located and the portfolio is geographically diversified. At 31 December 2003 the average lease expiry term of the portfolio was $11.3$ years.

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

Capital raising

During the six month period the Trust issued 18.2 million units by way of an underwritten unit purchase plan to retail and institutional investors at an issue price of \$1.37. More than 39 per cent of unitholders participated in the unit purchase plan. The \$25.0 million in capital that was raised has been applied to reduce debt and fund property developments.

Market rent reviews

During the period, 10 market rent reviews were completed. The reviews resulted in an average 12 per cent uplift on the passing rent of the properties. These were the first reviews conducted on Trust properties, which all have leases which call for reviews on the fifth anniversary of the lease commencement date.

The rental reviews on properties at Burleigh Heads, Southport and Underwood in Queensland were negotiated with the tenant, Bunnings Pty Ltd, and the results were consistent with independent advice obtained by Bunnings Property Management Limited.

The rental reviews of properties at Altona, Fountain Gate, Nunawading and Sandown in Victoria, as well as Balcatta, Joondalup and Mandurah in Western Australia, were all determined by an independent valuer appointed by the Trust and Bunnings Pty Ltd.

As at 31 December 2003, rent review notices had been served on Bunnings Pty Ltd on a further 10 properties.

Revaluations

In November 2003, three properties in the Trust's portfolio were revalued by an independent valuer. These properties, at Burleigh Heads, Southport and Underwood in Queensland, were revalued following the completion of market rent reviews. As a result of the revaluations, the average book value of the properties has been increased by 20.8 per cent. The revaluations have contributed to an increase in the underlying net tangible asset backing of the Trust's units, of \$1.18 at 31 December 2003.

Subsequent rent reviews and revaluations

Two market rent reviews and three property revaluations were completed after 31 December 2003.

The market rent reviews for Tuggeranong, in the Australian Capital Territory, and Minchinbury, in Sydney, have resulted in an average 29 per cent rental uplift for the properties. The reviews in each case were determined by an independent valuer appointed by the Trust and Bunnings Pty Ltd.

Details of the reviews are as follows:

	Passing Rent (S p a)	Market Review (S p a)	Uplift	Effective Date
Tuggeranong (ACT)	842,597	1,070,000	$+27.0%$	1 Dec 03
Minchinbury (NSW)	854,843	1,256,400	$+31.6%$	31 Dec 03

The three revaluations were on Trust properties located at Balcatta, Joondalup and Mandurah in Western Australia. The revaluations followed the rental uplift as a result of market rent reviews completed on each of the properties in December 2003.

Details of the revaluations are as follows:

	Book Value (S)	Market Value (S)	Increment	Revaluation Yield 1
Balcatta (WA)	11,700,000	15,500,000	$+32.5%$	8.50%
Joondalup (WA)	8,300,000	10,800,000	$+30.1%$	8.50%
Mandurah (WA)	7,350,000	9,100,000	$+23.8%$	8.50%

1. Yield applied by independent valuer to passing rent

Outlook

Continued growth in revenue and earnings is expected as a result of more properties being added to the portfolio, as well as programmed rental escalations and market rent reviews.

The ongoing expansion of the Bunnings hardware business is expected to continue to provide the Trust with investment opportunities. It is likely that 8 to 12 Bunnings Warehouse stores per annum will be opened in the near future in Australia and New Zealand.

The Trust will also continue to explore the acquisition of established Bunnings Warehouse properties owned by Wesfarmers, as a result of the acquisition of a number of BBC Hardwarehouses, as well as Bunnings Warehouse properties owned by parties not related to Wesfarmers.

Market rent review results are scheduled on a further 8 properties prior to 30 June 2004, and on seven properties in the 2004/05 financial year.

The Trust's programme of revaluing properties at least every three years will continue, and under that programme a further four properties are due for revaluation by 30 June 2004. Additional revaluations may occur should they be warranted as a result of market rent review results, or property market conditions.

For further information please contact:

Mr Andrew Hopkins Manager, Bunnings Property Management Limited

Telephone: (08) 9327 4318 E-mail: andrew.hopkins@bpml.wesfarmers.com.au Website: www.bunningspropertytrust.com.au

APPENDIX 4D - BUNNINGS WAREHOUSE PROPERTY TRUST

ARSN 088 581 097

Financial half year ended 31 DECEMBER 2003

Results for announcement to the market

		\$A'000
up	30.1%	to	21,081
up	23.4%	to	14,939
up	23.4%	to	14,939
		Amount per security
		5.51 cents
		5.15 cents
			31 December 2003

CONDENSED STATEMENT OF FINANCIAL PERFORMANCE

FOR THE HALF-YEAR ENDED 31 DECEMBER 2003	December 2003 \$000	December 2002 \$000
STATEMENT OF FINANCIAL PERFORMANCE
Revenue and expenses from ordinary activities
Rental income	19,783	15,262
Other property income	1,201	854
Interest income	97	85
	21,081	16,201
Responsible entity's fees	1,425	1.068
Borrowing costs	4,237	2,728
Other operating expenses	480	299
Net profit attributable to unitholders of the Bunnings Warehouse Property Trust	14,939	12,106
Net increase in asset revaluation reserve	6,200	474
Total changes in equity other than those resulting from transactions with unitholders as unitholders attributable to unitholders of the Bunnings Warehouse Property Trust	21,139	12,580
STATEMENT OF DISTRIBUTION
Net profit attributable to unitholders of the Bunnings Warehouse Property Trust	14,939	12,106
Undistributed income at the beginning of the financial year	7	1
Total available for distribution	14,946	12,107
Distribution paid and payable	14,941	12,101
Undistributed income at the end of the financial year	5.	6.
Basic and diluted earnings per unit (cents per unit) Interim distribution per unit for the half-year, excluding units issued under the	5.4	5.0
Unit Purchase Plan (cents per unit)	5.51	5.15

CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2003	December 2003 \$000	June 2003 \$000	December 2002 \$000
Current assets
Cash assets	4,429	4,783	1,070
Other	575	243	2,204
Total current assets	5,004	5,026	3,274
Non-current assets
Investment properties	496,779	466,539	382,667
Total non-current assets	496,779	466,539	382,667
Total assets	501,783	471,565	385,941
Current liabilities
Payables	5,271	5,412	930
Distribution payable	14,941	14,233	12,101
Total current liabilities	20,212	19,645	13,031
Non-current liabilities
Payables	10,605	13,726
Interest bearing liabilities	129,636	135,552	79,772
Total non-current liabilities	140,241	149,278	79,772
Total liabilities	160,453	168,923	92,803
Net assets	341,330	302,642	293,138
Unitholders' funds
Contributed equity	311,772	279,282	272,787
Asset revaluation reserve	29,553	23,353	20,345
Undistributed income reserve	5	7	6
Total unitholders' funds	341,330	302,642	293,138
Net tangible asset backing per unit	\$1.18	\$1.14	\$1.12

CONDENSED STATEMENT OF CASH FLOWS FOR HALF YEAR ENDED 31 DECEMBER 2003	December 2003 \$000	December 2002 \$000
Cash flows from operating activities
Rent received	23,265	18,236
Payments to creditors	(1,557)	(1,048)
Payments to the responsible entity	(1,376)	(1,041)
Interest received	97	85
Borrowing costs paid	(4,031)	(2, 565)
Net cash flows from operating activities	16,398	13,667
Cash flows from investing activities Payments for purchase of, and additions to, the Trust's property
investments	(27, 722)	(37,767)
Proceeds from sale of property investments	1,650
Net cash flows used in investing activities	(26, 072)	(37, 767)
Cash flows from financing activities
Proceeds from issue of units	25,000	33,680
Issue costs paid	(78)	(466)
Repayment of borrowings	(9,037)	(1,100)
Distribution paid	(6,565)	(7, 199)
Net cash flows from financing activities	9,320	24,915
Net (Decrease)/Increase in cash held	(354)	815
Cash held at the beginning of the financial period	4,783	255
Cash held at the end of the financial period	4,429	1,070

For the half-year ended 31 December 2003

$\mathbf{1}$ Basis of preparation of the condensed financial report

The half-year financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Constitution of the Bunnings Warehouse Property Trust (the Trust), the Corporations Act 2001, applicable Accounting Standards including AASB 1029: Interim Financial Reporting, and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views). They have been prepared on the basis of the historical cost convention except for property investments which are carried at their fair value based on independent valuations conducted at intervals of not more than three years.

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period. The half-year financial report does not include notes of the type normally included in an annual report.

It is recommended that the half-vear financial report is read in conjunction with the annual financial statements as at 30 June 2003 together with public announcements made by the Trust in accordance with the continuous disclosure obligations arising under the Australian Stock Exchange Listing Rules and the Corporations Act 2001.

Accounting policies are consistent with the previous period unless otherwise stated.

$\overline{2}$ Contingent liabilities

There have been no major changes since the last annual report.

3 Non cash financing activities

	December	December
	2003	2002
	\$000	\$000
Unit capital issues
Distribution Reinvestment Plan	7.667	4,310

4 Segment reporting

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

Bunnings Warehouse Property Trust Directors' report

For the half-year ended 31 December 2003

In accordance with the Corporations Act 2001, Bunnings Property Management Limited (ABN 26 082 856 424), as responsible entity for the Bunnings Warehouse Property Trust (the Trust), provides this report for the half-year ended 31 December 2003.

Directors

The names of directors of the responsible entity in office during the half-year and until the date of this report are:

W H Cairns (Chairman)

P J Mansell (Director)

R W McCuaig (Director)

G T Tilbrook (Director)

Review and results of operations

	December 2003 \$000	December 2002 \$000
Net profit	14,939	12,106
Distributable income	14,946	12,107

The interim distribution is 5.51 cents per ordinary unit (last year 5.15 cents). This interim distribution will be made on 25 February 2004.

Rounding

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

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

W H Cairns Chairman

Perth, 13 February 2004

Bunnings Warehouse Property Trust Directors' declaration

For the half-year ended 31 December 2003

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

• The condensed financial statements and notes of the Trust are in accordance with the Corporations $(a)$ Act 2001, including:
• giving a true and fair view of the Trust's financial position as at 31 December 2003 and of $(1)$ its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 1029: Interim Financial Reporting and $(ii)$ Corporations Regulations 2001; and
• there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they $(b)$ become due and payable.

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

W H Cairns Chairman

Perth, 13 February 2004