BWP GROUP — Interim / Quarterly Report 2012

Feb 8, 2012

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Half-Year Report 2011/12 Six months to 31 December 2011

Contents

Half-year highlights	2
Financial & market performance	3
Our property portfolio	4
Report to unitholders	6
Financial statements	12
Directory	28
Investor Information	29

Core purpose

The BWP Trust aims to provide a premium commercial real estate investment product, delivering unitholders a secure and growing income stream and long-term capital growth.

BWP Trust ARSN 088 581 097

Responsible Entity BWP Management Limited ABN 26 082 856 424 Australian Financial Services Licence No. 247830

www.bwptrust.com.au

Cover photo: Pakenham, VIC

Harrisdale, WA

Half-year highlights

• Income of $49.8 million for the six months – up 23.4 per cent on the previous corresponding period

• Distributable profit of $34.5 million for the six months – up 30.6 per cent on the previous corresponding period

• Interim distribution of 6.63 cents per unit – up 7.3 per cent on the previous corresponding period

• Completed the acquisition of a Bunnings Warehouse property at Dubbo, New South Wales and the development of a Bunnings Warehouse at Harrisdale, Western Australia

• Agreement to acquire a 50 per cent interest in the Domain Central Homemaker Centre in Townsville, Queensland, subject to outstanding conditions precedent

• Refinancing and additional bank funding arrangements agreed to increase facility limits to $430 million and extend the duration to 4.3 years at 31 December 2011

• Portfolio value of $1,250.1 million – up by $24.2 million from 30 June 2011 following capital expenditure of $26.8 million and a net revaluation loss of $2.6 million for the six months

• Net Tangible Assets of $1.87 per unit at 31 December 2011 (30 June 2011: $1.90)

• Weighted Average Lease Expiry of 8.2 years at 31 December 2011 (30 June 2011: 8.6 years)

• Portfolio 100 per cent occupied

• Gearing (debt/total assets) 18.9 per cent at 31 December 2011 (30 June 2011: 17.0 per cent)

• Covenant gearing (debt and non-current liabilities/total assets) 19.8 per cent (30 June 2011: 17.1 per cent)

Distribution per unit (cents per unit)

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6.72
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5.98
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5.80
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4.87
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6.70
08/09
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6.63
11/12
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6.55
07/08
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1
6.18
10/11
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6.10
09/10
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• 1 FY10/11 interim distribution includes a capital distribution of 0.08 cents per unit, resulting from the sale of an investment property

Financial & market performance

Financial performance

Half-year ended 31 December	2011	2010
Total income	$m 49.8	40.4
Net proft	$m 32.0	54.2
Net unrealised loss/(gain) in fair value of
investment properties	$m 2.6	(28.2)
Net realised proft on sale of investment
property	$m -	0.4
Distributable proft for the period	$m 34.51	26.4
Distribution per ordinary unit	cents 6.63	6.18
Total assets	$m 1,272.6	1,077.0
Borrowings	$m 240.5	193.6
Unitholders’ equity	$m 974.0	837.5
Gearing (debt to total assets)	% 18.9	18.0
Number of units on issue	m 520	427
Number of unitholders	14,521	12,682
Net tangible asset backing per unit	$ 1.87	1.96
Unit price at 31 December	$ 1.72	1.732
Management expense ratio (annualised)	% 0.63	0.70

• 1 adjusted for rounding

• 2 prior year adjusted to reflect effect of $150 million capital raising in March 2011 (Source: Reuters)

Market performance

The BWP Trust (“the Trust”) outperformed the broader listed property market during the half-year, with a negative 2.4 per cent total return for the six months to 31 December 2011, compared with negative 4.6 per cent for the benchmark S&P/ASX 200 A-REIT index (source: UBS Australia).

The Trust also outperformed the broader listed property market for total returns over one, three, five and ten year periods, as shown in the following table:

Total returns[1] compared to market (source: UBS Australia)

Periods ended 31 Dec 2011	1 year (%)	3 years (%)2	5 years (%)2	10 years (%)2
BWP	6.5	9.9	2.8	10.8
S&P / ASX 200 A-REIT
Accumulation index	-1.5	1.9	-14.9	0.8

• 1 total returns include movement in security price and dividends/distributions (which are assumed to be reinvested)

• 2 annual compound returns

Our property portfolio

Portfolio rental summary

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Gross Gross
As at 31 December 2011 Land lettable Annual As at 31 December 2011 Land lettable Annual
area area [1] rental [2] area area [1] rental [2]
ha sqm $000 ha sqm $000
Western Australia South Australia
Albany 2.0 13,660 795 Mile End 3.3 14,786 2,129
Balcatta 4.3 25,439 1,820 Noarlunga 2.6 15,054 1,389
Belmont 2.2 10,381 1,250 Regency Park (Blackwoods) 1.1 4,682 414
Bibra Lake 3.2 13,977 1,590 Total 7.0 34,522 3,932
Cockburn 2.6 12,839 1,400 New South Wales
Geraldton 3.3 17,809 924 Artarmon 0.7 5,746 1,523
Geraldton Showrooms 1.2 1,511 223 Belmont North 4.0 12,640 864
Belrose 2.5 8,888 1,925
Harrisdale 3.7 14,777 1,325
Blacktown (Blackwoods) 1.3 8,346 783
Joondalup 2.5 13,358 1,300 Coffs Harbour 2.5 8,657 827
Mandurah 2.5 12,097 1,344
Dubbo 4.5 16,344 1,299
Midland 2.4 13,694 1,377 Greenacre [9] 2.2 - -
Mindarie 3.1 14,479 1,333 Lismore 2.1 10,076 880
Morley 1.8 9,852 1,199 Maitland 3.7 12,797 1,239
Port Kennedy 2.8 11,675 1,315 Minchinbury [10] 3.6 12,048 1,643
Rockingham 3.3 17,179 1,524 Port Macquarie 2.0 8,801 867
Total 40.9 202,727 18,719 Thornleigh 1.2 5,301 1,271
Victoria Villawood 2.6 10,886 1,456
Altona [3] 3.4 9,254 1,077 Wagga Wagga 3.6 13,774 1,200
Bayswater [4] 4.9 17,677 2,006 Wollongong 2.7 10,811 1,312
Blackburn (Industrial) 4.1 20,361 1,634 Total 39.2 145,115 17,090
Broadmeadows 1.8 12,765 1,627 Queensland
Caroline Springs 3.0 14,212 1,450 Burleigh Heads 3.3 12,428 1,519
Croydon 3.8 13,292 1,562 Cairns 2.4 12,917 1,226
Dandenong 3.1 12,313 1,347 Cannon Hill 3.6 16,470 1,994
Epping 3.1 12,027 1,122 Fairfield Waters 2.9 13,645 1,390
Fountain Gate 3.2 12,624 1,362 Hemmant (Bunnings Distribution Centre) 3.5 21,523 2,205
Hervey Bay 3.0 11,824 1,131
Frankston 3.7 13,843 1,888
Morayfield 3.2 12,507 1,597
Hawthorn 0.8 7,462 2,966 Mount Gravatt 2.7 11,824 1,064
Hoppers Crossing 2.7 11,170 1,193 Rocklea 3.1 12,671 1,530
Maribyrnong [5] 3.4 - - Smithfield 3.1 13,094 1,300
Mentone 2.5 11,814 1,484 Southport 3.5 12,431 1,495
Mornington 4.0 13,324 1,543 Underwood 2.9 12,245 1,405
Northland 3.3 12,027 1,682 Total 37.2 163,579 17,856
Nunawading [6] 3.4 14,766 2,123 Grand Total 208.7 869,750 96,826
Oakleigh South 4.4 16,949 1,807 Note: totals and grand total adjusted for rounding
Pakenham 3.5 14,867 1,638 1 total retail area of the Bunnings Warehouse
Port Melbourne 3.0 13,846 1,701 23 annual rental figures do not include access fees detailed below includes additional land (1.0 hectare) for which Bunnings Group Limited (“Bunnings”) pays
Sandown 3.1 12,180 1,094 the Trust an access fee of $221,636 per annum
Scoresby 3.4 11,938 1,271 4 previously reported as Bayswater Bunnings Warehouse and Bayswater Showrooms; now
Sunshine 2.0 9,958 980 reported as a single property consistent with other Bunnings Warehouses co-located with
showroom tenancies on the same site
Vermont South [7] 5.2 16,634 2,028 5 development site for which Bunnings pays the Trust an access fee of $602,482 per annum
TotalAustralian Capital Territory 78.8 305,303 36,583 67 includes adjoining properties (0.1 hectares) for which Bunnings pays the Trust an access fee includes land (0.4 hectares) for which Bunnings pays the Trust an access fee of of $126,935 per annum
Fyshwick [8] 2.8 6,648 1,147 $68,000 per annum
Tuggeranong 2.8 11,857 1,498 8 includes land (1.0 hectare) for which Bunnings pays the Trust an access fee of
Total 5.6 18,505 2,645 9 development site for which Bunnings pays the Trust an access fee of $800,000 per annum $301,020 per annum
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• 9 development site for which Bunnings pays the Trust an access fee of $800,000 per annum

• 10 includes adjoining property (0.5 hectares) for which Bunnings pays the Trust an access fee of

• $340,551 per annum

Report to unitholders

The directors of BWP Management Limited, the responsible entity for the BWP Trust, are pleased to present this interim report to unitholders covering the financial results of the Trust for the six months to 31 December 2011 and a brief overview of the activities of the Trust.

loss on revaluation of investment properties (refer to the Revaluations section) and an increase in the fair value of interest rate hedging derivatives liabilities, due to the fall in underlying market interest rates.

Interim distribution

Activities during the period included: the settlement of a Bunnings Warehouse acquired as part of a portfolio of 13 properties that the Trust agreed to acquire in February 2011 and completion of the Bunnings Warehouse development on land also acquired as part of the portfolio; agreement to acquire a 50 per cent interest in the Domain Central Homemaker Centre in Townsville, Queensland; completion of minor improvements to existing properties; completion of three market rent reviews; the revaluation of the fair value of the portfolio; and refinancing to increase the limits and duration of bank finance.

Financial results

Total income for the period was $49.8 million, an increase of 23.4 per cent over the corresponding period last year. The increase in income was mainly due to growth of the property portfolio during or since the corresponding period – from acquisitions and improvements to investment properties and rent reviews (refer to Property portfolio and Rent reviews sections).

Finance costs of $10.1 million were 3.6 per cent higher than the previous corresponding six months, due to higher debt levels. The average level of debt was 21.9 per cent higher than the corresponding period ($236.9 million compared with $194.3 million). The weighted average cost of net borrowings for the half-year (finance costs less finance income/average borrowings) was 8.24 per cent, compared to 9.40 per cent in the corresponding period, as a result of reductions in bank fees and margins during or since the corresponding period, increased utilisation of undrawn debt capacity and lower interest rates.

For the half-year the Trust reported a distributable profit of $34.5 million - an increase of 30.6 per cent on the distributable profit in the corresponding period last year.

The management expense ratio for the 12 months to 31 December 2011 (expenses other than property outgoings and borrowing costs as a percentage of average total assets) was 0.63 per cent, compared with 0.70 per cent for the corresponding period. The reduction in management expense ratio is largely due to the inclusion of properties acquired as part of the portfolio that the Trust agreed to acquire in February 2011 and which do not incur a management fee for the period to 30 June 2012.

As at 31 December 2011 the Trust’s total assets were $1,272.6 million, with unitholders’ equity of $974.0 million and total liabilities of $298.6 million.

The underlying net tangible asset backing of the Trust’s units decreased by 3 cents per unit, from $1.90 per unit at 30 June 2011 to $1.87 per unit at 31 December 2011. This decrease was the result of the net unrealised

An interim distribution of 6.63 cents per ordinary unit has been declared. This is 7.3 per cent higher than the previous corresponding period (6.18 cents per unit) due mainly to increased property revenue and a lower average cost of borrowings.

The interim distribution will be made on 24 February 2012 to unitholders on the Trust’s register at 5.00 pm on 30 December 2011.

Units issued under the Trust’s distribution reinvestment plan in respect of the interim distribution will be issued at $1.7404 per unit, representing the volume weighted average price of the Trust’s units for the 10 trading days following the record date, without the application of a discount.

Property portfolio

Total capital expenditure on the portfolio during the half-year amounted to $26.8 million, comprising the items outlined below.

In August 2011, the Trust completed the acquisition of the Bunnings Warehouse property at Dubbo, New South Wales for $16.8 million, including acquisition costs. The property was part of a portfolio of 13 properties that the Trust agreed to acquire from and lease back to Bunnings Group Limited (“Bunnings”) in February 2011 and settlement of the property had been subject to local authority approval of subdivision.

In October 2011, construction of the Trust’s Bunnings Warehouse at Harrisdale, Western Australia, was completed at a cost to the Trust of $8.6 million. The Trust purchased the Harrisdale development site for $10.6 million (including acquisition costs) also as part of the portfolio acquired from Bunnings in February 2011.

Other non-income producing capital improvements made by the Trust to investment properties during the half-year totalled $1.4 million. These included minor works at various properties and roof safety and access works.

During the half-year, the Trust committed to acquire for $61.5 million, a 50 per cent interest in the Domain Central Homemaker Centre in Townsville, Queensland. The acquisition of the Trust’s interest in this property, as tenants in common, is conditional on the vendor, Duckworth Nominees Pty Ltd, refinancing its loan facilities relating to the half-interest that it will retain. The vendor had not completed the refinancing as at the date of this report. In the event that this condition is not satisfied by mid-March 2012 either party may withdraw from the agreement for the Trust to acquire the property.

At 31 December 2011 the weighted average lease expiry term of the portfolio was 8.2 years (30 June 2011: 8.6 years, December 2010: 8.9 years). The portfolio was 100 per cent occupied at 31 December 2011.

Report to unitholders (continued)

Rent reviews

The rent payable for each leased property is increased annually, either by a fixed percentage or by the Consumer Price Index (“CPI”) except when a property is due for a market rent review.

Annual escalations

Thirty five of the leases of Trust properties were subject to annual fixed or CPI reviews during the period. The weighted average increase in annual rent for these 35 leases was 3.5 per cent.

Market rent reviews

During the period, market rent reviews were concluded on two Bunnings Warehouses and for the Sleepmaster tenancy at the Blackburn industrial property. The market rent reviews completed during the half-year are shown in the table below.

Property location	Tenant	Passing rent ($pa)	Market review1 ($pa)	Uplift (%)	Effective date	Effective date
Coffs Harbour, NSW Frankston, VIC Blackburn, VIC2	Bunnings Bunnings Sleepmaster	819,789 1,888,419 800,000	827,500 1,888,419 842,500	+0.9 - +5.3	26 Nov 11 20 Dec 11 1 Apr 12
Weighted Average				+1.4

1 Negotiated between the Trust and the tenant

2 Multi-tenanted industrial property

Market rent reviews for four of the Trust’s Bunnings Warehouses due during the period (Croydon in Victoria; and Midland, Mindarie and Geraldton in Western Australia) have been referred for determination by independent valuers and were not completed by 31 December 2011.

Revaluations

During the half-year the Trust’s entire investment property portfolio was revalued, as required by Australian Equivalents to International Financial Reporting Standards (AIFRS). Property revaluations were performed by independent valuers for 15 properties during the period. The remaining 56 properties were subject to directors’ revaluations.

The value of the portfolio increased by $24.2 million to $1,250.1 million during the half-year, following capital expenditure of $26.8 million and a net revaluation loss of $2.6 million, at 31 December 2011.

The net revaluation loss was a result of increasing capitalisation rates at some properties offsetting the growth in rental income across the portfolio during the half-year. The increase in capitalisation rates was due to a reassessment of the likely impact on the portfolio of softening demand for commercial real estate in general and in relation to two Bunnings Warehouses, where Bunnings notified the Trust that it intends to vacate at the expiry of the current lease terms. The Trust’s

weighted average capitalisation rate for the portfolio at 31 December 2011 was 7.81 per cent (30 June 2011: 7.65 per cent, December 2010: 7.62 per cent).

Capital management

At 31 December 2011, the Trust had borrowings of $240.5 million under debt facilities with a combined limit of $394.3 million. Details of the facilities at 31 December 2011 are provided below:

• $100 million cash advance facility with the Commonwealth Bank of Australia, committed until 14 January 2014;

• $180 million bank bill facilities with Westpac Banking Corporation, committed until 22 December 2016;

• $100 million bank bill facility with Australia and New Zealand Banking Group, committed to 31 July 2013; and

• $14.3 million bank bill facility with National Australia Bank, committed to 3 January 2012.

During the half-year the Trust extended $230 million of the Trust’s existing $330 million bilateral bank facilities to five year terms, expiring late 2016 and early 2017 and secured an additional $100 million, also for a five year term. The refinancing and additional funding arrangements concluded in December 2011, involved the Trust:

• Extending its existing $80 million bank bill facility with Westpac Banking Corporation and establishing an additional $100 million five-year bank bill facility on comparable terms and conditions as the existing facility.

• Obtaining commitment from the Australia and New Zealand Banking Group, subject to finalisation of legal documentation, to extend the existing $100 million bank bill facility to five years and to obtain an additional $50 million five-year facility on comparable terms and conditions as the existing bank bill facility.

• Reducing the limits of its bank bill facility with National Australia Bank from $50 million to $14.3 million, being the amount remaining drawn and to be repaid on 3 January 2012.

Following completion of the refinancing and additional funding arrangements the Trust will have total bank facilities of $430 million and the weighted average duration will increase on a pro-forma basis from 1.9 years to 4.3 years at 31 December 2011.

The Trust’s gearing ratio (debt to total assets) at 31 December 2011 was 18.9 per cent (30 June 2011: 17.0 per cent, December 2010: 18.0 per cent), slightly below the preferred range of 20 to 30 per cent. Covenant gearing (debt and non-current liabilities to total assets) was 19.8 per cent (30 June 2011: 17.1 per cent, December 2010: 18.0 per cent), well below the maximum allowable 45 per cent under banking facilities.

Report to unitholders (continued)

The Trust has a policy of hedging the majority of its borrowings against interest rate movements, to ensure stability of distributions. At 31 December 2011, the Trust’s hedging cover was 70.5 per cent of borrowings, with $170.0 million interest rate swaps against borrowings of $241.2 million. Hedging levels are currently within the Board’s preferred 50 to 75 per cent range. The weighted average term to maturity of hedging was 3.59 years (30 June 2011: 3.34 years, December 2010: 3.37 years), including delayed start swaps.

The Trust’s distribution reinvestment plan was active for the interim distribution.

Outlook

Stronger property income and more active asset management will feature in the short-term as the responsible entity finalises recent acquisitions and developments and looks to drive better returns and value from existing assets.

Property income for the second half of 2011/12 is expected to increase as rental income flows through from recent and imminent acquisitions and developments. Recent acquisitions include the 11 Bunnings Warehouse properties acquired as part of the portfolio the Trust agreed to acquire from Bunnings in February 2011. A further two Bunnings Warehouse properties acquired as part of the portfolio and the acquisition of a 50 per cent interest in the Domain Central Homemaker Centre in Townsville, Queensland are expected to be completed within the second half of 2011/12. An upgrade of the Trust’s Bunnings Warehouse at Scoresby, Victoria, due for completion by 30 June 2012, will also generate additional rental income.

Rent reviews also are expected to increase property income for the half-year to 30 June 2012. There are five market rent reviews of Bunnings Warehouses remaining to be completed this financial year (four outstanding as at 31 December 2011 and one – Oakleigh South, Victoria - due in the second half of 2011/12). Forty one leases will be reviewed to the CPI or by a fixed percentage increase during the second half of 2011/12, including thirty four Bunnings Warehouses.

funds to be reinvested to improve the quality of the portfolio and may realise capital profit for distribution to unitholders.

The refinancing of the Trust’s existing bank facilities and securing an additional $100 million provides adequate debt capacity to fund committed capital expenditure, future upgrades and selective acquisitions. The refinancing of bank facilities is part of a broader strategy to increase the tenor and diversity of the Trust’s debt funding and the responsible entity will continue to position the Trust to further improve the efficiency, diversity and duration of debt finance, particularly by enabling access to debt capital markets as opportunity permits.

Based on current estimates and assumptions, the responsible entity maintains the guidance provided in February 2011 of a forecast distribution of 13.3 cents per unit for the full year ending 30 June 2012.

Internet site

The BWP 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.

Thank you for your ongoing support of the BWP Trust.

For BWP Management Limited,

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Grant Gernhoefer General Manager

John A Austin Chairman 9 February 2012

Beyond 2011/12, committed upgrades of existing Trust-owned Bunnings Warehouses at Fyshwick, Australian Capital Territory, and Rocklea, Queensland, are expected to further bolster earnings.

Bunnings’ continued strong focus on expansion and ongoing investment in its property pipeline and existing stores is likely to generate increased demand for additional upgrades of some of the Trust’s existing properties and may also provide further opportunities for the Trust to selectively acquire quality Bunnings Warehouses.

As the Trust’s property portfolio matures and increases in size, the assets require more active management. The responsible entity is assessing opportunities for redeploying properties to provide a more secure and growing income stream or divesting properties where it would allow the

Condensed Statement of Comprehensive Income For the half-year ended 31 December 2011

As at 31 December 2011

Condensed Statement of Financial Position

Rental income Other property income Finance income Total revenue Finance costs Responsible entity’s fees Other operating expenses Net proft before unrealised (loss)/gain in fair value of investment properties Unrealised (loss)/gain in fair value of investment properties Net proft attributable to unitholders of BWP Trust Other comprehensive (loss)/income Effective portion of changes in fair value of cash fow hedges Total comprehensive income for the period attributable to the unitholders of BWP Trust Basic and diluted earnings (cents per unit) resulting from net proft	Note	Dec 2011 $000 Dec 2010 $000
	2	47,542 39,028 2,090 877 212 497
		49,844 40,402 (10,054) (9,708) (3,183) (2,956) (2,088) (1,718)
		34,519 26,020 (2,564) 28,198
		31,955 54,218
		(9,802) 5,433
		22,153 59,651
		6.15 12.76

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

Note ASSETS Current assets Cash Deposit for purchase of an investment property Receivables and prepayments Total current assets Non-current assets Other receivables Investment properties 3 Derivative fnancial instruments Total non-current assets Total assets LIABILITIES Current liabilities Payables and deferred income Interest-bearing loans and borrowings 8 Derivative fnancial instruments Distribution payable 9 Total current liabilities Non-current liabilities Interest-bearing loans and borrowings 8 Derivative fnancial instruments Total non-current liabilities Total liabilities Net assets Unitholders’ equity Issued capital Reserves 6 Undistributed income Total unitholders’ equity	Note	Dec 2011 $000 June 2011 $000 Dec 2010 $000
		10,380 8,942 17,838 6,150 - - 5,031 5,623 2,303
		21,561 14,565 20,141
		850 850 850 1,250,141 1,225,881 1,053,290 - 833 2,718
		1,250,991 1,227,564 1,056,858
		1,272,552 1,242,129 1,076,999
		12,475 12,664 18,333 14,300 - - 88 378 593 34,477 30,161 26,391
		61,340 43,203 45,317
		226,195 210,844 193,574 11,022 1,763 638
		237,217 212,607 194,212
		298,557 255,810 239,529
		973,995 986,319 837,470
		673,311 673,311 518,785 (11,110) (1,308) 1,487 311,794 314,316 317,198
		973,995 986,319 837,470

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

For the half-year ended 31 December 2011

Condensed Statement of Cash Flows For the half-year ended 31 December 2011

Cash fows from operating activities Rent received Payments to suppliers Payments to the responsible entity Finance income Finance costs Net cash fows from operating activities Cash fows from investing activities Proceeds from the sale of an investment property Payment of deposit for purchase of an investment property Payments for purchase of, and additions to, investment properties Net cash fows used in investing activities Cash fows from fnancing activities Proceeds of borrowings Distributions paid Net cash fows used in fnancing activities Net increase/(decrease) in cash Cash at the beginning of the period Cash at the end of the period	Dec 2011 $000 Dec 2010 $000
	55,515 46,477 (8,454) (6,405) (3,137) (2,855) 128 497 (9,137) (9,491)
	34,915 28,223
	- 7,408 (6,150) - (26,817) (25,817)
	(32,967) (18,409)
	29,651 100 (30,161) (13,763)
	(510) (13,663)
	1,438 (3,849) 8,942 21,687
	10,380 17,838

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

Condensed Statement of Changes in Equity

Balance at 1 July 2010 Total comprehensive income for the period attributable to the unitholders of BWP Trust Net proft attributable to unitholders of BWP Trust Other comprehensive income: effective portion of changes in fair value of cash fow hedges Transactions with unitholders recorded directly in equity Distributions to unitholders Equity issued during the period: Distribution Reinvestment Plan Balance at 31 December 2010 Balance at 1 July 2011 Total comprehensive income for the period attributable to the unitholders of BWP Trust Net proft attributable to unitholders of BWP Trust Other comprehensive loss: effective portion of changes in fair value of cash fow hedges Transactions with unitholders recorded directly in equity Distributions to unitholders Balance at 31 December 2011	Issued capital $000 Undist- ributed income $000 Hedge Reserve $000 Total $000
	507,372 289,371 (3,946) 792,797 - 54,218 - 54,218 - - 5,433 5,433 - (26,391) - (26,391) 11,413 - - 11,413
	518,785 317,198 1,487 837,470
	673,311 314,316 (1,308) 986,319 - 31,955 - 31,955 - - (9,802) (9,802) - (34,477) - (34,477)
	673,311 311,794 (11,110) 973,995

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

Notes to the Financial Statements For the half-year ended 31 December 2011

Notes to the Financial Statements

For the half-year ended 31 December 2011

1 BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL STATEMENTS

The financial statements of BWP Trust (“the Trust”) for the half-year ended 31 December 2011 were authorised for issue in accordance with a resolution of the directors on 9 February 2012. The Trust was constituted under a Trust Deed dated 18 June 1998 as amended. The Trust is managed by BWP 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 2011.

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 2011 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 2011.

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:

Basic and diluted earnings (cents per unit) for the half-year Basic and diluted earnings (cents per unit) for the half-year excluding unrealised loss or gain in fair value of properties Interim distribution (cents per unit) for the half-year	Dec 2011 Dec 2010
	6.15 12.76 6.63 6.12 6.63 6.181

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

3 INVESTMENT PROPERTIES

Purchase price Acquisition costs Capital improvements since acquisition Cumulative fair value adjustment Fair value	Balance at 30 June 2011 $000 Movement during the period $000 Balance at 31 Dec 2011 $000
	632,860 15,790 648,650 37,672 1,024 38,696 241,042 10,010 251,052 314,307 (2,564) 311,743
	1,225,881 24,260 1,250,141

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 2011, 15 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.

During the half-year the Trust’s capital expenditure on investment properties totalled $26.8 million.

Notes to the Financial Statements (continued) For the half-year ended 31 December 2011

For the half-year ended 31 December 2011

Notes to the Financial Statements

3 INVESTMENT PROPERTIES (continued)

Dubbo, New South Wales

In August 2011, the Trust completed the acquisition of the Bunnings Warehouse property at Dubbo, New South Wales for $16.8 million, including acquisition costs. The property was part of a portfolio of 13 properties that the Trust agreed to acquire from and lease back to Bunnings Group Limited (“Bunnings”) in February 2011 and settlement of the property had been subject to approval of subdivision.

Harrisdale, Western Australia

During the half-year the construction of the Bunnings Warehouse in Harrisdale was completed by Bunnings as project manager for the Trust at a cost of $8.6 million. The Harrisdale property was acquired as part of the portfolio of 13 properties that the Trust agreed to acquire from Bunnings in February 2011.

7 CAPITAL EXPENDITURE COMMITMENTS

Estimated capital expenditure contracted for at balance date, but not provided for in the fnancial statements, which is payable: Not later than one year Unrelated Parties Related Parties Later than one year and not later than fve years Related Parties	Dec 2011 $000 Dec 2010 $000
	60,396 279 48,139 30 33,790 15,000
	142,325 15,309

Miscellaneous

Other non-income producing capital improvements during the half-year totalled $1.4 million, including $1.2 million relating to roof access and safety improvements on 34 properties.

4 SEGMENT REPORTING

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

5 ISSUED CAPITAL

The Trust’s distribution reinvestment plan was suspended for the final distribution for the year ended 30 June 2011. As a result there was no movement in the number of ordinary units on issue from 30 June 2011, being 520,012,793. The distribution reinvestment plan was active for the interim distribution for the half-year ended 31 December 2011.

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.

Opening balance at the beginning of the fnancial period Net (losses)/gains on cash fow hedges for the period Closing balance at the end of the fnancial period	Dec 2011 $000 Dec 2010 $000
	(1,308) (3,946) (9,802) 5,433
	(11,110) 1,487

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

Capital commitments to unrelated parties

During the half-year, the Trust committed to acquire a 50 per cent interest in the Domain Central Homemaker Centre in Townsville, Queensland for $61.5 million and a subsequent development payment for future buildings of $4.2 million. A deposit of $6.2 million was paid during the half-year and is refundable if the transaction does not proceed. The settlement of this property is conditional on the vendor refinancing its loan facilities.

During the half-year, the Trust committed to fund $0.8 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 Bunnings Warehouse, with an estimated cost of $15.0 million. On completion of the upgrade, expected to be in the year ending 30 June 2014, the parties will enter into a new 12-year lease of the Bunnings Warehouse with three five-year options, exercisable by the tenant.

In February 2011, the Trust committed to upgrade works at the Rocklea Bunnings Warehouse, with an estimated cost of $3.8 million. On completion of the upgrade, the parties will enter into a new ten-year lease of the Bunnings Warehouse with one ten-year option, exercisable by the tenant.

In March 2011, unitholders approved the acquisition of 13 properties from Bunnings, a controlled entity of Wesfarmers Limited. As at 31 December 2011, the Trust had completed the acquisition of 11 of the 13 properties it agreed to acquire from Bunnings. Subject to the achievement of conditions precedent in respect to the remaining two properties and on completion of the development of

Notes to the Financial Statements (continued) For the half-year ended 31 December 2011

Notes to the Financial Statements

For the half-year ended 31 December 2011

7 CAPITAL EXPENDITURE COMMITMENTS (continued)

9 DISTRIBUTION PAYABLE

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. A reconciliation is provided below.

Capital commitments to related parties (continued)

Bunnings Warehouses on two of the properties, a further $38.0 million is expected to be payable in the year ending 30 June 2012 and the remaining $18.8 million is expected to be payable in the year ending 30 June 2013.

$38.0 million is expected to be payable in the year ending 30 June 2012 and the remaining $18.8 million is expected to be	are not included in the proft available f A reconciliation is provided below.	or distribution to un	itholders.
payable in the year ending 30 June 2013.		Dec	Dec
In May 2011, the Trust committed to upgrade works at the Scoresby Bunnings Warehouse with an estimated cost of $6.3 million. On completion of the upgrade, the parties will enter into a new ten-year lease of the Bunnings Warehouse with two fve-year	Net proft attributable to unitholders of BWP Trust	2011 $000 31,955	2010 $000 54,218
options, exercisable by the tenant.	Net realised proft on sale of investment
During the half-year, the Trust also committed to fund $0.1 million of expenditure relating to capital improvement works at various properties.	property1 Net unrealised loss/(gain) in fair value of investment properties	- 2,564	376 (28,198)
LOANS AND BORROWINGS	Distributable proft for the period	34,519	26,396
As at 31 December 2011 the Trust has the following loan facilities:	Opening undistributed proft	9	16
	Closing undistributed proft	(51)	(21)
Limit Amount drawn	Distributable amount	34,477	26,391
$000 $000 Expiry date
Australia and New Zealand	Distribution (cents per unit)	6.63	6.18
Banking Group Limited1 100,000 54,400 31 July 2013	1Net sale proceeds less original purchase price	and capital expenditure	since
Commonwealth Bank of	acquisition
Australia 100,000 100,000 14 January 2014	10 RELATED PARTIES
Westpac Banking Corporation 180,000 72,500 22 December 2016 National Australia Bank Limited2 14,300 14,300 3 January 2012	Arrangements with related parties continue to be in place. For details on these arrangements refer to the 30 June 2011 annual fnancial statements.
Less: accrued interest and	11 SUBSEQUENT EVENTS
borrowing costs (705)	During the period, the Trust continued to provide a loan of $850,000
394,300 240,495	to Bunnings. The loan was established during the year ended

8 LOANS AND BORROWINGS

During the period, the Trust continued to provide a loan of $850,000 to Bunnings. The loan was established during the year ended 30 June 2006 to fund the purchase of a parcel of land adjacent to the Vermont South Bunnings Warehouse. At the time the land was exchanged at fair value and the terms of the agreement include the Trust charging Bunnings an access fee of eight per cent annually until such time as the parcel of land is sold to an external party and Bunnings repays the loan. In January 2012, the parcel of land was sold and Bunnings repaid the $850,000 loan to the Trust.

1 Prior to 31 December 2011, the Trust had a commitment from the Australia and New Zealand Banking Group Limited, subject to the finalisation of legal documentation, to extend its $100 million facility for five years and to obtain an additional $50 million five-year facility, bringing the Trust’s total bank facilities to $430 million, as at the date of this report. Subsequent to the half-year end, the legal documentation was completed with both facilities expiring on 23 January 2017.

In January 2012, the Trust repaid the $14.3 million drawn under its loan facility with National Australia Bank Limited and terminated the facility.

• 2 During December 2011, the Trust reduced its limits with National Australia Bank from $50 million to $14.3 million, being the amount drawn and to be repaid on 3 January 2012.

Directors’ Report For the half-year ended 31 December 2011

Directors’ Report For the half-year ended 31 December 2011

In accordance with the Corporations Act 2001,

BWP Management Limited (ABN 26 082 856 424), the responsible entity for BWP Trust, provides this report for the financial half-year that commenced 1 July 2011 and ended 31 December 2011 and review report thereon. The information on pages 6 to 11 forms part of this directors’ report and is to be read in conjunction with the following information:

Directors

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

J A Austin (Chairman)

B J H Denison

R D Higgins

P J Johnston

P J Mansell

Directors were in office for the entire period unless otherwise stated.

Review and results of operations

The operations of the Trust during the six months to 31 December 2011 and the results of those operations are reviewed on pages 6 to 11 of this report and the accompanying financial statements.

Net proft attributable to unitholders Net realised proft on sale of investment property Net unrealised loss/(gain) in fair value of investment properties Distributable proft for the period Opening undistributed proft Closing undistributed proft Distributable amount	Dec 2011 $000 Dec 2010 $000
	31,955 54,218 - 376 2,564 (28,198)
	34,519 26,396 9 16 (51) (21)
	34,477 26,391

The interim distribution is 6.63 cents per ordinary unit (2010: 6.18 cents). This interim distribution will be paid on 24 February 2012.

Units on issue

At 31 December 2011, 520,012,793 units of BWP Trust were on issue (30 June 2011: 520,012,793).

Events subsequent to reporting date

During the period, the Trust continued to provide a loan of $850,000 to Bunnings. The loan was established during the year ended 30 June 2006 to fund the purchase of a parcel of land adjacent to the Vermont South Bunnings Warehouse. At the time the land was exchanged at fair value and the terms of the agreement include the Trust charging Bunnings an access fee of eight per cent annually until such time as the parcel of land is sold to an external party and Bunnings repays the loan. In January 2012, the parcel of land was sold and Bunnings repaid the $850,000 loan to the Trust.

In January 2012, the Trust repaid the $14.3 million drawn under its loan facility with National Australia Bank Limited and terminated the facility.

Auditor independence declaration

The lead auditor’s independence declaration is set out on page 25 and forms part of the directors’ report for the half-year ended 31 December 2011.

Rounding Off

The responsible entity is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial statements and the directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated.

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

J A Austin

Chairman BWP Management Limited Perth, 9 February 2012

Directors’ Declaration For the half-year ended 31 December 2011

For the half-year ended 31 December 2011

Auditor’s Independence Declaration

In accordance with a resolution of the directors of

BWP Management Limited, responsible entity for the BWP Trust (the Trust), I state that:

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In the opinion of the directors:

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

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

• (i) giving a true and fair view of the Trust’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• (ii) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001; and

• (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.

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

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 review for the half-year ended 31 December 2011 there have been:

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

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

J A Austin

Chairman BWP Management Limited Perth, 9 February 2012

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KPMG

D P McComish

Partner

Perth, 9 February 2012

Independent Auditor’s Review Report to the unitholders of BWP Trust For the half-year ended 31 December 2011

Independent Auditor’s Review Report to the unitholders of BWP Trust For the half-year ended 31 December 2011

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Report on the financial report

We have reviewed the accompanying half-year financial report of BWP Trust (the Trust), which comprises the condensed statement of financial position as at 31 December 2011, condensed statement of comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the half-year ended on that date, notes 1 to 11 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Trust.

Directors’ responsibility for the half-year financial report

The directors of BWP Management Limited (the Responsible Entity) are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Trust’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As auditor of BWP Trust, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of BWP Trust is not in accordance with the Corporations Act 2001, including:

• (a) giving a true and fair view of the Trust’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

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KPMG

D P McComish

Partner

Perth, 9 February 2012

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Directory

Responsible entity

BWP Management Limited

ABN 26 082 856 424

Level 11, Wesfarmers House 40 The Esplanade PERTH WA 6000 Telephone: +61 8 9327 4356 Facsimile: +61 8 9327 4344 www.bwptrust.com.au

Directors and senior management

J	A Austin	(Chairman)
B R	J H Denison D Higgins	(Director) (Director)
P	J Johnston	(Director)
P	J Mansell	(Director)
G K	W Gernhoefer A Lange	(General Manager) (Secretary)

Investor Information

Stock exchange listing

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

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 General Manager – BWP Management Limited, Level 11, Wesfarmers House, 40 The Esplanade, Perth, Western Australia, 6000. The procedure for lodgement of complaints and complaints handling is set out under the Investors tab of the BWP Trust website at www.bwptrust.com.au.

Should a complainant be dissatisfied with the decision made by the Responsible Entity in relation to a complaint, the complainant is entitled to take the matter up with the Financial Ombudsman Service (FOS), an external and independent industry complaint handling scheme. FOS is located at Level 12, 717 Bourke Street, Docklands, Victoria, 3008. FOS can be contacted by telephone on 1300 780 808 or by facsimile on +61 3 9613 6399, by mail at GPO Box 3, Melbourne, Victoria, 3001, by email at info@fos.org.au, or by visiting their website at www.fos.org.au.

Registry manager

Computershare Investor Services Pty Limited Level 2, 45 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) www.computershare.com.au

Auditor

KPMG 235 St Georges Terrace PERTH WA 6000

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Half-Year Report 2011/12

Printed on 55% recycled and FSC certified virgin fibre. ISO 14001 Environmental Accreditation.

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www.bwptrust.com.au