BWP GROUP — Interim / Quarterly Report 2011

Feb 9, 2011

10 February 2011

The Manager Company Announcements Office Australian Securities Exchange Limited Level 4, 20 Bridge Street SYDNEY NSW 2000

Dear Sir,

RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

In accordance with ASX Listing Rule 4.2A, the following documents are attached for release to the market:

• Appendix 4D half-year results announcement
• Half-year results announcement
• Financial Statements for the half-year ended 31 December 2010
• KPMG independent auditor's review report and auditor's independence declaration

It is recommended that the half-year financial report is read in conjunction with the annual financial statements as at 30 June 2010 together with public announcements made by the Trust in accordance with the continuous disclosure obligations arising under the ASX Listing Rules and the Corporations Act 2001.

K A Lange Company Secretary

BUNNINGS WAREHOUSE PROPERTY TRUST

ARSN 088 581 097

APPENDIX 4D – HALF-YEAR REPORT

Financial half-year ended 31 DECEMBER 2010

Results for announcement to the market

		6 months to 31 Dec 10	6 months to 31 Dec 09	Variance (%)
Revenue from ordinary activities	(\$000)	40,402	38,982	3.6
Net profit before unrealised items	(\$000)	26,020	25,255	3.0
Unrealised items – gain in fair value of investment properties	(\$000)	28,198	15,891	77.4
Net profit from ordinary activities attributable to unitholders	(\$000)	54,218	41,146	31.8
Net tangible assets per unit	(\$)	1.96	1.83	7.1

Commentary on the results for the period

The commentary on the results for the period ended 31 December 2010 is contained in the ASX release dated 10 February 2010 accompanying this statement.

		6 months to 31 Dec 10	6 months to 31 Dec 09
Distributions
Interim distribution payable	(\$000)	26,391	25,268
Interim distribution per unit	cents	6.18	6.10

Record date for determining entitlements to the interim distribution	31 December 2010
Payment date for interim distribution	25 February 2011

The Distribution Reinvestment Plan ("DRP") was in effect for the half-year ended 31 December 2010 and will apply to future distributions unless notice is given of its suspension or termination.

Applications to participate in or to cease or vary participation in the DRP were required to be correctly completed and lodged by 5.00pm (WST) on 31 December 2010 if they were to apply to the interim distribution for 2010/11. Forms received after that time will be effective for subsequent distributions only.

Units issued under the DRP in respect of the interim distribution for 2010/11 will be issued at \$1.7261 per unit, representing a 1.5 per cent discount to the volume weighted average unit price for the 10 trading days following the record date.

This report should be read in conjunction with the 30 June 2010 Annual Financial Report of the Trust and any announcements made during the period by or on behalf of the Trust in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.

ARSN 088 581 097

Half-year results to 31 December 2010

The directors of Bunnings Property Management Limited, the responsible entity for the Bunnings Warehouse Property Trust, today announced the results of the Trust for the six months to 31 December 2010.

Highlights

E	• Income of \$40.4 million for the six months – up 3.6 per cent on the previous corresponding period
S	Distributable profit of \$26.4 million for the six months – up 4.5 per cent on the previous • corresponding period
A E	• Interim distribution of 6.18 cents per unit – up 1.3 per cent on the previous corresponding period
L	• Portfolio value \$1,053.3 million – up by \$53.2 million following a net revaluation gain of \$28.2 million, capital expenditure of \$32.4 million and the sale of one property for net sale proceeds of \$7.4 million for the six months
E R	• Acquired an established Bunnings Warehouse at Port Melbourne, Victoria for \$24.0 million, plus \$1.4 million acquisition costs
	• Net Tangible Assets of \$1.96 per unit at 31 December 2010 (2009: \$1.83)
X	• Weighted Average Lease Expiry of 8.9 years at 31 December 2010 (2009: 5.9 years)
	• Gearing (debt/total assets) 18.0 per cent at 31 December 2010 (2009: 19.2 per cent)
S A	Covenant gearing (debt and non-current liabilities/total assets) 18.0 per cent (2009: 19.5 per cent)

Financial results

Total income for the period was \$40.4 million, an increase of 3.6 per cent over the comparative period last year. The increase in income was mainly due to growth of the property portfolio during or since the comparative period, from: rent reviews, acquisitions and improvements to investment properties.

Finance costs of \$9.7 million were 3.9 per cent higher than the comparative six months due to the higher average cost of borrowings, in spite of a slightly lower average level of debt. The weighted average cost of net borrowings for the half-year (finance costs less finance income/average borrowings) was 9.40 per cent, compared to 9.03 per cent in the corresponding period, as a result of increases in bank fees and margins during or since the corresponding period. The average level of debt was 3.3 per cent lower than the corresponding period (\$194.3 million compared with \$200.9 million).

For the half-year the Trust reported a distributable profit of \$26.4 million, an increase of 4.5 per cent on the distributable profit in the comparative period last year. The distributable profit excludes the unrealised net gain of \$28.2 million on the revaluations of the fair value of the portfolio but includes a capital distribution of \$0.4 million on the sale of one of the Trust's properties (see Property portfolio section).

The management expense ratio for the 12 months to 31 December 2010 (expenses other than property outgoings and borrowing costs as a percentage of average total assets) was 0.70 per cent, the same as for the corresponding period.

Interim distribution

An interim distribution of 6.18 cents per ordinary unit has been declared. This is 1.3 per cent higher than the previous corresponding period (6.10 cents per unit) due mainly to the capital distribution of 0.09 of a cent relating to the sale of one of the Trust's properties.

ASX RELEASE The interim distribution will be made on 25 February 2011 to unitholders on the Trust's register at 5.00 pm on 31 December 2010.

Units issued under the Trust's Distribution Reinvestment Plan in respect of the interim distribution will be issued at \$1.7261 per unit, representing a 1.5 per cent discount to the volume weighted average price of the Trust's units for the 10 trading days following the record date.

Property portfolio

Total capital expenditure on the portfolio during the half-year amounted to \$32.4 million, comprising the items outlined below.

In December 2010, the Trust purchased an established Bunnings Warehouse in the Melbourne suburb of Port Melbourne, Victoria. The property was acquired from an institutional owner for \$25.4 million (including acquisition costs). The 3.0 hectare property is situated on the corner of Williamstown Road and Bertie and Bridge Streets in Port Melbourne, approximately 2.5 kilometres south-west of the Melbourne central business district. The building comprises a total retail and office area of 13,846 square metres with approximately 327 car parking spaces.

The property is leased to Bunnings Group Limited, with an initial term expiring in March 2020 and four options, exercisable by the tenant, for a further five years each. The rent is reviewed annually to the consumer price index and subject to a market review in March 2013 and at the exercise of each option. Market reviews are subject to a 10 per cent cap and 5 per cent collar; ensuring that the revised rent may be no greater than 110 per cent, nor less than 95 per cent, of the rent in the preceding year.

Also in December 2010, a \$5.9 million upgrade of the Trust's Broadmeadows Bunnings Warehouse was completed by Bunnings Group Limited for the Trust. The upgrade extended the fully-enclosed covered area by 3,824 square metres. The annual rental increases by approximately \$472,000 commencing in January 2011.

Other, non-income producing, capital improvements made by the Trust to investment properties during the half-year totalled \$1.1 million. These included concrete slab works within the Trust's Bunnings Warehouse at Cairns, Queensland; car park works at the Blackburn industrial property and at the Trust's Bunnings Warehouse at Bayswater, Victoria; and minor works at various properties.

In December 2010, the Trust committed to upgrade its Bunnings Warehouse at Fyshwick, Australian Capital Territory, with an estimated cost of \$15.0 million. On completion of the upgrade, the parties will enter into a new 12 year lease of the Bunnings Warehouse with four, five year options, exercisable by the tenant.

Also In December 2010, the Trust entered into a contract to acquire a 0.5 hectare vacant site adjoining the Trust's Bunnings Warehouse in Minchinbury, New South Wales for a cost of \$4.0 million (excluding acquisition costs). The acquisition is subject to completion of due diligence by the Trust in January/February 2011.

In October 2010, the Trust sold its Canning Vale industrial facility, vacated by J Blackwood and Sons Limited in February 2010. Selling the property was considered a better outcome for the Trust than re-leasing and the sale price of \$7.5 million realised a modest capital appreciation, resulting in a distribution to unitholders of 0.09 of a cent per unit as part of the interim distribution for half-year ended 31 December 2010.

ASX RELEASE At 31 December 2010 the weighted average lease expiry term of the portfolio was 8.9 years (2009: 5.9 years). The increase in weighted average lease expiry compared with the previous corresponding period is predominantly the result of the extension of a number of leases approved by unitholders in May 2010.

Market rent reviews

During the period, market rent reviews were concluded on five properties. The results of the five market rent reviews completed during the half-year are shown in the table below.

	Passing rent (\$ pa)	Market review2 (\$ pa)	Uplift (%)	Effective date
Mile End, SA1	1,411,052	1,845,000	+30.8	22 Mar 10
Morley, WA	1,015,777	1,168,142	+15.0	3 Jul 10
Northland, Vic	1,452,546	1,628,000	+12.1	19 Aug 10
Rockingham, WA	1,261,993	1,475,000	+16.9	16 Aug 10
Vermont South, Vic	1,959,187	1,959,187	-	15 Aug 10
Weighted Average (%)			+13.7

¹ excludes amortised rent not subject to review

² Morley, Rockingham and Vermont South were negotiated between the Trust and the tenant; Mile End and Northland were determined by an independent valuer

Revaluations

During the half-year the Trust's entire investment property portfolio was revalued in accordance with Australian Equivalents to International Financial Reporting Standards (AIFRS).

Six property revaluations and one acquisition valuation during the period were performed by independent valuers. The remaining 53 properties were subject to directors' revaluations.

The value of the portfolio increased by \$53.2 million to \$1,053.3 million during the half-year; following a net revaluation gain of \$28.2 million at 31 December 2010, capital expenditure of \$32.4 million and the sale of the Canning Vale industrial property for net sale proceeds of \$7.4 million.

The net revaluation gain was essentially a result of growth in rental income across the portfolio. There was also an improvement in the market capitalisation rate for one property, bringing the weighted average capitalisation rate for the Trust's portfolio at 31 December 2010 down slightly to 7.62 per cent (June 2010: 7.65 per cent and December 2009: 7.78 per cent).

Finance

As at 31 December 2010 the Trust's total assets were \$1,077.0 million, with unitholders' equity of \$837.5 million and total liabilities of \$239.5 million.

The underlying net tangible asset backing of the Trust's units increased by 8.0 cents per unit, from \$1.88 per unit at 30 June 2010 to \$1.96 per unit at 31 December 2010. This increase was the result of the net unrealised gain on revaluation of investment properties, referred to in the Revaluations section, and an increase in the fair value of interest rate hedging derivatives.

At 31 December 2010 the Trust had borrowings of \$194.3 million, under debt facilities with a combined limit of \$330.0 million. Details of the facilities are provided below. As at 31 December 2010 the Trust has:

• \$100 million cash advance facility with the Commonwealth Bank of Australia, committed until 14 January 2012;
• \$80 million bank bill facility with Westpac Banking Corporation, committed until 2 November 2013;
• \$100 million bank bill facility with Australia and New Zealand Banking Group, committed to 31 July 2013; and
• \$50 million evergreen facility with National Australia Bank, which is extended annually in March each year provided there has been no event of default or potential event of default; with any change to pricing to apply from 1 April the following year. The next review is due in March 2011; with pricing to apply from 1 April 2012. The Trust is in negotiations with the bank to change this facility to a three year term facility to improve the pricing structure.

The Trust's gearing ratio (debt to total assets) at 31 December 2010 was 18.0 per cent (2009: 19.2 per cent), slightly below the preferred range of 20 to 40 per cent. Covenant gearing (debt and non-current liabilities to total assets) was 18.0 per cent, well below the maximum allowable 45 per cent under banking facilities.

ASX RELEASE The Trust has a policy of hedging the majority of its borrowings against interest rate movements, to ensure stability of distributions. At 31 December 2010, the Trust's hedging cover was 98.8 per cent of borrowings, with \$192.0 million interest rate swaps against borrowings of \$194.3 million. Hedging levels are currently higher than the Board's preferred 50 to75 per cent range, as a result of reducing borrowings following the Trust's \$150 million capital raising in May 2009. Hedging levels are likely to remain high until borrowing levels increase, or as interest rate swaps expire over the next 2 to 3 years.

The weighted average term to maturity of hedging was 3.37 years, including delayed start swaps.

Outlook

The responsible entity continues to pursue better returns from existing assets, acquisition of quality commercial properties and effective management of the Trust and its capital.

For existing assets, growth is most likely to come from increased rental as a result of scheduled rent reviews, upgrades to existing properties and acquiring adjoining land for future upgrades. There are no market rent reviews remaining to be completed this financial year; with the four market reviews due for the year being completed in the first half. There are 24 leases due to be reviewed to the consumer price index or by a fixed percentage increase during the second half of 2010/11.

The acquisition of the Port Melbourne Bunnings Warehouse during the half-year demonstrates the Trust's focus on acquiring quality assets. While Bunnings Warehouses remain the preferred target for acquisitions, other assets will be considered, selectively, that provide similar characteristics to Bunnings Warehouse properties by having a large area, being well located and with a quality tenant under a longer-term lease. The aim is to acquire properties that will provide a sound income stream and long term capital growth.

Improving the efficiency of funding is a key component of capital management initiatives for the Trust. Based on market commentary and the Trust's recent experience with refinancing, it appears that fees and margins on bank facilities are easing for better credit risks. The second-half of 2010/11 will benefit from substantially lower fees and margins on the bank facility extended during the half-year to 31 December 2010. Refinancing discussions are continuing with the other three banks. The Trust's relatively high level of interest rate hedging means that in the short term the Trust's exposure to fluctuations in interest rates is limited and interest rates on existing borrowings are expected to remain above current market bank bill rates for the second half of 2010/11.

Subsequent Event

ASX RELEASE In February 2011, the Trust committed to upgrade its Bunnings Warehouse at Rocklea, Queensland, with an estimated cost of \$3.8 million. The Rocklea property was the only Trust property damaged by the flooding that impacted Brisbane and surrounding areas in January 2011. Fortunately, the flooding of the Rocklea store did not result in injury or loss of life; however the building was inundated with approximately two metres of flood water. The store has been temporarily closed to trading while repairs are undertaken by the tenant. Damage to the building is expected to be covered by insurance and the Trust will continue to receive rent as usual. The upgrade will be undertaken following completion of the repair of flood damage.

On completion of the Rocklea upgrade, anticipated to be in the second half of the 2011 calendar year, the annual rent will increase by approximately \$0.31 million. The parties will enter into a new 10 year lease of the Bunnings Warehouse with one 10 year option, exercisable by the tenant. The rent will be reviewed to market every five years and by the Consumer Price Index in all other years. All other terms and conditions of the lease will remain the same.

Internet site

The Bunnings Warehouse Property Trust internet site, www.bwptrust.com.au is a useful source of information for unitholders. It includes details of the Trust's property portfolio, current activities and future prospects.

The site provides access to annual and half-year reports and also contains releases made to the Australian Securities Exchange covering matters of relevance to investors.

Further information

For further information please contact:

Grant Gernhoefer General Manager, Bunnings Property Management Limited Telephone: (08) 9327 4318 E-mail: ggernhoefer@bwptrust.com.au Website: http://www.bwptrust.com.au

An investor briefing and question and answer teleconference call will be held on 10 February 2011 at 1.30 pm AWST (4.30 pm AEDT). Dial 1800 500 931 from within Australia of +613 9221 4420 from outside Australia. Quote Conference ID Number 239227 to the operator. (Investor briefing presentation to be released separately).

BUNNINGS WAREHOUSE PROPERTY TRUST

HALF-YEAR FINANCIAL STATEMENTS

For the half-year ended 31 December 2010

		December 2010	December 2009
	Note	\$000	\$000
Rental income		39,028	38,080
Other property income		877	704
Finance income		497	198
Total revenue		40,402	38,982
Finance costs		(9,708)	(9,345)
Responsible entity's fees		(2,956)	(2,763)
Other operating expenses		(1,718)	(1,619)
Net profit before unrealised gain in fair value of investment properties		26,020	25,255
Unrealised gain in fair value of investment properties		28,198	15,891
Net profit attributable to unitholders of Bunnings Warehouse Property Trust		54,218	41,146
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges		5,433	3,101
Total comprehensive income for the period attributable to the unitholders of Bunnings Warehouse Property Trust		59,651	44,247
Basic and diluted earnings (cents per unit) resulting from net profit	2	12.76	9.97

The condensed statement of comprehensive income should be read in conjunction with the accompanying notes

	December 2010	December 2009
	\$000	\$000
DISTRIBUTION RECONCILIATION
Net profit attributable to unitholders of Bunnings Warehouse Property Trust	54,218	41,146
Net realised profit on sale of investment property1	376	-
Net unrealised gain in fair value of investment properties	(28,198)	(15,891)
Distributable profit for the period	26,396	25,255
Opening undistributed profit	16	33
Closing undistributed profit	(21)	(20)
Distributable amount	26,391	25,268
Distribution (cents per unit)	6.18	6.10
DISTRIBUTION STATEMENT
Net profit attributable to unitholders of Bunnings Warehouse Property Trust	54,218	41,146
Undistributed income at the beginning of the period	289,371	247,616
Distributions paid or payable	(26,391)	(25,268)
Undistributed income at the end of the period	317,198	263,494

¹ Net sale proceeds less original purchase price and capital expenditure since acquisition

Bunnings Warehouse Property Trust Condensed Statement of Financial Position As at 31 December 2010

		December 2010	June 2010	December 2009
	Note	\$000	\$000	\$000
ASSETS
Current assets
Cash		17,838	21,687	8,234
Receivables and prepayments		2,303	3,259	2,852
Total current assets		20,141	24,946	11,086
Non-current assets
Other receivables		850	850	850
Investment properties	3	1,053,290	1,000,111	972,211
Derivative financial instruments		2,718	487	2,570
Total non-current assets		1,056,858	1,001,448	975,631
Total assets		1,076,999	1,026,394	986,717
LIABILITIES
Current liabilities
Payables and deferred income		18,333	10,531	9,593
Derivative financial instruments		593	203	271
Distribution payable		26,391	25,159	25,268
Total current liabilities		45,317	35,893	35,132
Non-current liabilities
Interest-bearing loans and borrowings	8	193,574	193,474	189,786
Derivative financial instruments		638	4,230	3,063
Total non-current liabilities		194,212	197,704	192,849
Total liabilities		239,529	233,597	227,981
Net assets		837,470	792,797	758,736
Unitholders' equity
Issued capital		518,785	507,372	496,006
Reserves	6	1,487	(3,946)	(764)
Undistributed income		317,198	289,371	263,494
Total unitholders' equity		837,470	792,797	758,736
Net tangible asset backing per unit1		\$1.96	\$1.88	\$1.83

¹ Total net assets divided by the number of units on issue at period end date

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

Bunnings Warehouse Property Trust Condensed Statement of Cash Flows For the half-year ended 31 December 2010

	December 2010	December 2009
	\$000	\$000
Cash flows from operating activities
Rent received	46,477	43,518
Payments to suppliers	(6,162)	(8,199)
Payments to the responsible entity	(2,855)	(2,769)
Finance income	497	195
Finance costs	(9,734)	(9,807)
Net cash flows from operating activities	28,223	22,938
Cash flows from investing activities
Proceeds from the sale of a Trust's property investment	7,408	-
Payments for purchase of, and additions to, the Trust's property investments	(25,817)	(4,040)
Net cash flows used in investing activities	(18,409)	(4,040)
Cash flows from financing activities
Proceeds/(repayments) of borrowings	100	(36,151)
Distributions paid	(13,763)	(13,234)
Net cash flows used in financing activities	(13,663)	(49,385)
Net decrease in cash	(3,849)	(30,487)
Cash at the beginning of the period	21,687	38,721
Cash at the end of the period	17,838	8,234

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

Bunnings Warehouse Property Trust Condensed Statement of Changes in Equity For the half-year ended 31 December 2010

	Issued capital	Undistributed income	Hedge Reserve	Total
	\$000	\$000	\$000	\$000
Balance at 1 July 2009	489,273	247,616	(3,865)	733,024
Total comprehensive income for the period attributable to the unitholders of Bunnings Warehouse Property Trust
Net profit attributable to unitholders of Bunnings Warehouse Property Trust	-	41,146	-	41,146
Other comprehensive income: effective portion of changes in fair value of cashflow hedges	-	-	3,101	3,101
Transactions with unitholders recorded directly in equity
Distributions to unitholders	-	(25,268)	-	(25,268)
Equity issued during the period: Distribution Reinvestment Plan	6,733	-	-	6,733
Balance at 31 December 2009	496,006	263,494	(764)	758,736
Balance at 1 July 2010	507,372	289,371	(3,946)	792,797
Total comprehensive income for the period attributable to the unitholders of Bunnings Warehouse Property Trust
Net profit attributable to unitholders of Bunnings Warehouse Property Trust	-	54,218	-	54,218
Other comprehensive income: effective portion of changes in fair value of cashflow hedges	-	-	5,433	5,433
Transactions with unitholders recorded directly in equity
Distributions to unitholders	-	(26,391)	-	(26,391)
Equity issued during the period: Distribution Reinvestment Plan	11,413	-	-	11,413
Balance at 31 December 2010	518,785	317,198	1,487	837,470

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

1 BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL STATEMENTS

The financial statements of Bunnings Warehouse Property Trust (the Trust) for the half-year ended 31 December 2010 were authorised for issue in accordance with a resolution of the directors on 10 February 2011. The Trust was constituted under a Trust Deed dated 18 June 1998 as amended. The Trust is managed by Bunnings Property Management Limited. Both the Trust and the responsible entity are domiciled in Australia.

The half-year financial statements do not include all notes of the type normally included within the annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Trust as the full financial statements.

The half-year financial statements should be read in conjunction with the annual financial statements of the Trust as at 30 June 2010.

It is also recommended that the half-year financial statements be considered together with any public announcements made by the Trust during the half-year ended 31 December 2010 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

(a) Basis of accounting

The half-year financial statements have been prepared in accordance with the requirements of the Constitution of the Trust and Australian Accounting Standards. The half-year financial statements have been prepared on an historical cost basis, except for investment properties and derivative financial instruments, which have been measured at their fair value.

The financial statements are 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 Class Order 98/100, unless otherwise stated.

For the purpose of preparing the half-year financial statements, the half-year has been treated as a discrete reporting period.

(b) Statement of compliance

The half-year financial statements are a general purpose financial report which has been prepared in accordance with AASB134 Interim Financial Reporting and the Corporations Act 2001.

Significant accounting policies applied by the Trust in these interim financial statements are the same as those applied by the Trust in its financial statements as at and for the year ended 30 June 2010.

2 INTERIM DISTRIBUTION PER UNIT

In accordance with the Trust's constitution, the unrealised gains or losses on the revaluation of the fair value of investment properties are not included in the profit available for distribution to unitholders. The following shows the effect on earnings per unit of excluding unrealised gains or losses and the resulting distribution per unit:

	December 2010	December 2009
Basic and diluted earnings (cents per unit) for the half-year	12.76	9.97
Basic and diluted earnings (cents per unit) for the half-year excluding unrealised loss or gain in fair value of properties	6.12	6.10
Interim distribution (cents per unit) for the half-year	6.181	6.10

¹ Includes Canning Vale net sale proceeds less original purchase price and capital expenditure since acquisition

3 INVESTMENT PROPERTIES

	Balance at 30 June 2010	Movement during the period	Balance at 31 December 2010
	\$000	\$000	\$000
Purchase price	453,767	17,533	471,300
Acquisition costs	27,386	938	28,324
Capital improvements since acquisition	229,603	6,886	236,489
Cumulative fair value adjustment	289,355	27,822	317,177
Fair value	1,000,111	53,179	1,053,290

Investment properties are carried at fair value. Fair value for individual properties is determined by a full independent valuation completed at least every three years by an independent valuer who holds a relevant professional qualification and has recent experience in the location and category of the investment property. During the six months to 31 December 2010, seven property valuations were performed by independent valuers.

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

3 INVESTMENT PROPERTIES (continued)

During the half-year the Trust's capital expenditure on investment properties totalled \$32.4 million. In addition, the Trust sold its Canning Vale industrial property.

Port Melbourne, Victoria

In December 2010, the Trust purchased an established Bunnings Warehouse property at Port Melbourne, approximately 2.5 kilometres south-west of the Melbourne central business district. The property was acquired from an institutional owner for \$25.4 million (including acquisition costs).

Broadmeadows, Victoria

During the half-year a \$5.9 million upgrade of the Trust's Bunnings Warehouse in Broadmeadows, Victoria, was completed by Bunnings Group Limited as project manager for the Trust.

Miscellaneous

Other capital improvements made by the Trust to investment properties during the half-year totalled \$1.1 million. These included internal concrete slab works at the Trust's Bunnings Warehouse at Cairns, Queensland, car park works at the Blackburn industrial property and at the Trust's Bunnings Warehouse at Bayswater, Victoria and minor works at various properties.

Canning Vale, Western Australia

In October 2010, the Trust sold the Canning Vale industrial facility vacated by J Blackwood and Sons Limited for \$7.5 million.

4 SEGMENT REPORTING

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

5 ISSUED CAPITAL

During the period, 6,330,873 units (2009: 4,226,325) were issued under the Trust's distribution reinvestment plan, bringing the number of ordinary units on issue as at 31 December 2010 to 427,042,646.

6 RESERVES

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.

	December 2010	December 2009
	\$000	\$000
Opening balance at the beginning of the financial period	(3,946)	(3,865)
Net gains on cash flow hedges for the period	5,433	3,101
Closing balance at the end of the financial period	1,487	(764)

The movement in the half-year was due to the increase in variable interest rates during the half-year.

7 CAPITAL EXPENDITURE COMMITMENTS

	December 2010	December 2009
	\$000	\$000
Estimated capital expenditure contracted for at balance date, but not provided for in the financial statements, which is payable:
Not later than one year
Unrelated Parties	279	111
Related Parties	30	500
Later than one year and not later than five years
Related Parties	15,000	-
	15,309	611

Capital commitments to unrelated parties

During the half-year, the Trust committed to fund \$0.3 million of expenditure relating to capital improvement works at various properties.

Capital commitments to related parties

In December 2010, the Trust committed to upgrade works at the Fyshwick property with an estimated cost of \$15.0 million. On completion of the upgrade, the parties will enter into a new 12 year lease of the Bunnings Warehouse with four five-year options exercisable by the tenant.

8 LOANS AND BORROWINGS

As at 31 December 2010 the Trust has the following loan facilities:

	Limit	Amount drawn1
	\$000	\$000	Expiry date
Australia and New Zealand Banking Group Limited	100,000	48,900	31 July 2013
Commonwealth Bank of Australia	100,000	49,900	14 January 2012
Westpac Banking Corporation	80,000	45,500	2 November 2013
National Australia Bank Limited	50,000	50,000	Evergreen2
	330,000	194,300

¹ Amount drawn includes accrued interest of \$0.7 million as at 31 December 2010.

² To be reviewed in March 2011 for pricing to apply from 1 April 2012 to 31 March 2013. Facility is extended annually provided there has been no event of default or potential event of default.

9 RELATED PARTIES

Arrangements with related parties continue to be in place. For details on these arrangements, refer to the 30 June 2010 annual financial statements.

10 SUBSEQUENT EVENTS

In February 2011, the Trust committed to upgrade its Bunnings Warehouse at Rocklea, Queensland, with an estimated cost of \$3.8 million. Upon completion, the annual rent will increase by approximately \$0.31 million and the parties will enter into a new ten-year lease, with one ten-year option exercisable by the tenant.