BWP GROUP — Interim / Quarterly Report 2023

Feb 7, 2023

2022/23 HALF-YEAR RESULTS TO 31 DECEMBER 2022

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IMPORTANT NOTICE

The information provided in this presentation should be considered together with the financial statements for the period and previous periods, ASX announcements and other information available on the Trust’s website.

This presentation has been prepared by BWP Management Limited as the responsible entity for BWP Trust. The information provided is for information purposes only and does not constitute an offer to arrange to issue securities or other financial products, nor is it intended to constitute legal, tax or accounting advice or opinion. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person.

All reasonable care has been taken in preparing the information contained in this presentation, however no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. Without limiting the preceding sentence, no representation or warranty, express or implied, is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forwardlooking statements, forecasts, prospects or returns contained in this presentation. Such forward-looking statements, forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies, many of which will be outside the control of BWP Trust or BWP Management Limited. Also, past performance is no guarantee of future performance.

Before making an investment decision, you should conduct your own due diligence and consult with your own legal, tax or accounting adviser as to the accuracy and application of the information provided in this presentation and in respect of your particular investment needs, objectives and financial circumstances.

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HALF-YEAR RESULTS TO 31 DECEMBER 2022

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ACKNOWLEDGEMENT OF COUNTRY

We acknowledge the Traditional Owners of Country throughout Australia and their continuing connection to lands and waterways upon which we depend. We pay our respect to their Elders, past and present.

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HALF-YEAR RESULTS TO 31 DECEMBER 2022

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PRESENTATION OUTLINE

Michael Wedgwood

Managing Director BWP Management Limited

Summary slides 5-6

Results slides 7-8

Portfolio slides 9-13

Andrew Ross

Head of Property BWP Management Limited

Core portfolio slides 14-19

Alternative use properties slides 20-21

Capital management slides 22-24

David Hawkins

Head of Finance BWP Management Limited

Outlook slides 25-26

Questions slide 27

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HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS FRANKSTON, VIC

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SUMMARY
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SUMMARY | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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2022/23 HALF-YEAR RESULTS AT A GLANCE

3.9% 8 A- S&P Rating like-for-like rental growth Market Rent Reviews (“MRR”) A3 Moody’s rating finalised[3] $53.9 million[2] 7 15.3% portfolio revaluation uplift Bunnings Warehouse options gearing exercised 3.7% 5.05% 97.5% cost of debt at 31 December 2022, portfolio cap rate leased 3.3% weighted average for the period 3.6 years $14.0m 53.3% portfolio weighted average upgrade agreed for Dubbo Hedging cover lease expiry (“WALE”) property

• 1 In comparison to prior corresponding period.

• 2 Gross $54.3 million revaluation gain before straight-lining of rent.

• 3 Includes seven Bunnings Warehouse properties.

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SUMMARY | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS BRENDALE, QLD

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RESULTS
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RESULTS | HALF-YEAR RESULTS TO 31 DECEMBER 2022
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FINANCIAL PERFORMANCE SIX MONTHLY

	6 months	6 months
	to Dec 2022	to Dec 2021
Total income ($m)	78.6	75.9
Management expense ratio1(%)	0.64	0.63
Other expenses ($m)	4.5	4.3
Distributable amount ($m)	57.9	57.9
Property revaluation gains2 ($m)	53.9	291.8
Net profit including property revaluations ($m)	111.3	348.3
Number of units on issue3(m)	642.4	642.4
Six months distribution (cents per unit)	9.02	9.02
Total assets3($m)	3,091.0	2,939.6
Borrowings3($m)	472.1	455.5
Weighted average cost of debt4(pa) (%)	3.27	3.18
Net tangible assets3 ($ per unit)	3.95	3.75
Weighted average cap rate3(%)	5.05	5.11

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

• 2 After adjustments made for the straight-lining of rent.

• 3 As at the respective period end rather than for six months to.

• 4 Finance costs divided by average borrowings for the six months.

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RESULTS | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BROWNS PLAINS, QLD

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9 PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022
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BUNNINGS MARKET RENT REVIEW OUTCOMES

• Annual like-for-like rental growth across the portfolio of 3.9 per cent

• Seven Bunnings market rent reviews were finalised during the period

Property Location	Passing rent ($pa)	Reviewed rent ($pa)	Variance (%)	Effective date
Hawthorn, VIC1,2	3,380,642	3,325,207	(1.6)	29-Oct-20
Coburg, VIC1,3 Pakenham, VIC1,4 Wagga Wagga, NSW1,5 Dubbo, NSW5,6	1,706,685 1,402,631 1,565,728 1,402,631	1,877,353 1,542,894 1,565,728 1,262,368	10.0 10.0 - (10.0)	3-Nov-20 31-Mar-21 31-Mar-21 4-Aug-21
Geraldton, WA5,6	1,350,262	1,309,754	(3.0)	10-Dec-21
Greenacre, NSW5,6	2,955,032	2,870,000	(2.9)	3-Apr-22
Total/ weighted average	13,763,611	13,753,304	(0.1)

• 1 The market rent review was due during the year ended 30 June 2021, but the outcome was only finalised during the current financial year. 2 The market rent review was determined by an independent valuer.

• 3 The market rent review was determined by an independent valuer. The independently determined rent was 13.4 per cent above the passing rent however, the market rent review clause in the lease has a 10.0 per cent cap on the increase.

• 4 The market rent review was determined by an independent valuer. The independently determined rent was 21.6 per cent above the passing rent however, the market rent review clause in the lease has a 10.0 per cent cap on the increase.

• 5 The market rent review was agreed between parties.

• 6 The market rent review was due during the year ended 30 June 2022, but the outcome was only finalised during the current financial year.

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PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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CAPITALISATION RATE OUTCOMES

There were no standalone Bunnings Warehouse transactions in the last six months

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7.00%
6.50%
6.00%
5.50%
5.00%
4.50%
4.00%
3.50%
Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22
New Bunnings Store Transactions Secondary Market Bunnings Transactions BWP Cap Rate
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PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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REVALUATIONS DECEMBER 2022

• December 2022 weighted average capitalisation rate 5.05 per cent (Jun 2022: 5.04 per cent, Dec 2021: 5.11 per cent )

• 16 independent valuations (21.5 per cent of BWP portfolio value), average cap rate 4.96 per cent

• 57 internal valuations average cap rate 5.08 per cent

• Standalone Bunnings Warehouses weighted average cap rate of 4.90 per cent

• Cap rate movement; three properties decreased, 61 properties no change and nine properties increased

Revaluations by state 31 Dec 2022	No. of properties	Rental $m/annum2	Cap rate (%)	Value ($m)
NSW/ACT	18	36.56	5.02	746.5
QLD	18	41.68	5.16	750.9
SA	2	4.47	5.28	84.6
VIC	20	49.46	4.70	1,033.0
WA	15	24.11	5.70	445.8
Total/weighted average	73	156.28	5.05	3,060.8

• 1 Gross movement in valuations; statutory accounts reflect a $53.9 million revaluation gain after adjustments made for straight-lining of rent.

2 Subject to rounding.

• HY 2022/23 gross fair value gain of $54.3[1 ] million on revaluation

• Rental growth largely contributed to the net fair value gain during the period

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PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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INDEPENDENT REVALUATIONS DECEMBER 2022

		Jun 2022	Jun 2022	Dec 2022	Dec 2022	Cap rate	Valuation	Dec 2022
Property	State	Cap Rate	Valuation	Cap Rate	Valuation	movement	movement	Term Certain
		(%)	($m)	(%)	($m)	(%)	($m)	(years)
Fyshwick	ACT	5.50	28.3	5.50	29.9	-	1.6	2.0
Minchinbury	NSW	4.25	72.6	4.25	72.5	-	(0.1)	4.3
Wollongong	NSW	5.75	26.1	6.75	22.0	1.00	(4.1)	0.3
Fairfield Waters	QLD	5.50	31.7	5.50	31.3	-	(0.4)	3.3
Smithfield	QLD	5.75	28.3	5.50	29.2	(0.25)	0.9	3.4
Rocklea	QLD	5.75	38.6	6.00	39.0	0.25	0.4	2.8
Mornington	VIC	4.75	39.3	4.75	42.2	-	2.9	4.0
Port Melbourne	VIC	3.50	79.2	3.50	80.0	-	0.8	8.4
Vermont South	VIC	5.00	46.3	5.00	48.4	-	2.1	2.6
Caroline Springs	VIC	4.75	39.8	4.75	41.0	-	1.2	3.4
Pakenham	VIC	5.50	38.6	5.00	46.2	(0.50)	7.6	3.9
Cockburn	WA	5.00	36.6	5.00	36.6	-	-	3.3
Morley	WA	6.50	13.0	6.75	12.5	0.25	(0.5)	-
Belmont	WA	5.00	30.8	5.00	30.8	-	-	3.3
Ellenbrook	WA	5.00	43.5	5.00	44.8	-	1.3	2.9
Harrisdale	WA	5.75	47.8	5.50	50.7	(0.25)	2.9	3.5
Total/	average	4.97	640.5	4.96	657.1	(0.01)	16.6	3.6

Figures subject to rounding.

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PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS WEST IPSWICH, QLD

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CORE PORTFOLIO
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CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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CORE PORTFOLIO SUMMARY

65 3.7 years properties portfolio WALE 14,172 m[2] 82 % average lettable metro located area properties 4.9% weighted average cap rate

3.3 ha average land area 72.0 % upgrade properties or occupied <15yrs

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CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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WEIGHTED AVERAGE LEASE EXPIRY PROFILE

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30%
25%
20%
15%
10%
5%
0%
FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 Beyond
Showrooms BWH >15 years occupancy BWH <15 yrs occupancy or upgrades
% of Rental Income
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CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS LEASE EXPIRIES NEXT THREE YEARS

Property	Lease expiry	Options	Rent ($’000pa)	Comments
Balcatta	Sep-23	10 yrs	2,477	Notification required by Jun 2023
Southport	Nov-23	10 yrs	1,953	Notification required by Aug 2023
Tuggeranong	Nov-23	10 yrs	2,036	Notification required by Aug 2023
Cannon Hill	Mar-24	10 yrs	2,711	Notification required by Dec 2023
Bayswater	Apr-24	3 x 5 yrs	2,145	Notification required by Jan 2024
Browns Plains	May-24	Nil	1,928	Ongoing discussions for a new lease
Wallsend	May-24	5 x 5 yrs	2,355	Notification required by Nov 2023
Thornleigh	Sep-24	2 x 5 yrs	1,540	Notification required by Jun 2024
Noarlunga	Sep-24	1 x 5 yrs	1,812	Notification required by Jun 2024
Maitland	Oct-24	2 x 5 yrs	1,575	Notification required by Jul 2024
Bibra Lake	Oct-24	1 x 5 yrs	1,835	Notification required by Jul 2024
Fyshwick	Dec-24	1 x 5 yrs	1,440	Notification required by Sep 2024
Nunawading	Feb-25	10 yrs	2,593	Notification required by Nov 2024

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CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS LEASE EXPIRIES NEXT THREE YEARS (CONTINUED)

Property	Lease expiry	Options	Rent ($’000pa)	Comments
Morayfield	Mar-25	10 yrs	1,963	Notification required by Dec 2024
Mile End	Mar-25	10 yrs	2,654	Notification required by Dec 2024
Vermont South	Aug-25	3 x 5 yrs	2,422	Notification required by May 2025
Arundel	Sep-25	5 x 6 yrs	2,766	Notification required by May 2025
Bethania	Sep-25	5 x 6 yrs	2,249	Notification required by Mar 2025
Rocklea	Oct-25	4 x 5 yrs	2,424	Notification required by Jul 2025
Hawthorn	Oct-25	3 x 5 yrs	3,633	Notification required by Jul 2025
North Lakes	Oct-25	5 x 6 yrs	3,158	Notification required by Feb 2025
Coburg	Nov-25	2 x 5 yrs	2,051	Notification required by Aug 2025
Ellenbrook	Dec-25	5 x 6 yrs	2,238	Notification required by Jun 2025
Townsville North	Dec-25	5 x 6 yrs	2,016	Notification required by Jun 2025
Springvale	Dec-25	5 x 6 yrs	2,414	Notification required by Jun 2025
Mt Gravatt	Dec-25	3 x 5 yrs	1,451	Notification required by Sep 2025

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CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS UPGRADE DUBBO, NEW SOUTH WALES

• Upgrade cost of $13.6 million at a funding rate of 4.0 per cent

• land acquisition $0.4 million

• development $13.6 million

• Upgrade increases the total retail area by 4,673 square metres

• Anticipated completion mid-2024

• On completion, new 10-year lease with 6 x 5 year options exercisable by Bunnings

• annual CPI reviews capped at 2.5 per cent, market rent review every 10 years

• 10 per cent caps/collars on the market rent review

• no other changes to the existing lease

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CORE PORTFOLIO | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS WOLLONGONG, NSW

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ALTERNATIVE USE PROPERTIES
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ALTERNATIVE USE PROPERTIES| HALF-YEAR RESULTS TO 31 DECEMBER 2022

ALTERNATIVE USE PROPERTIES UPDATE

Property	Lease expiry	Comments
Port Kennedy	Expired	Development approval for large format retail centre; leasing campaign underway – 51 per cent committed to lease
		Property rezoned to allow for a supermarket and other retail shops, leasing discussions are
Belmont North	Expired	progressing, we expect to lodge a development application in FY2023; construction costs
		higher than anticipated
		Development approval for large format retail centre; leasing campaign underway for large
Hervey Bay	Mar 2023	format retail redevelopment – 90 per cent pre-committed to lease; design development/
		tender to be completed Mar 2023
Wollongong	Mar 2023	Considering redevelopment options
Albany	Oct 2024	ToolKit Depot store trading in ex-Bunnings; considering redevelopment/divestment options
Fountain Gate	Feb 2025	Well located opposite a Westfield shopping centre. Activity centre zoned site allowing mixed use development – master planning progressing
Northland	Aug 2025	Progressing redevelopment/rezoning options
Wagga Wagga	Mar 2026	Considering redevelopment options

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ALTERNATIVE USE PROPERTIES | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS VERMONT SOUTH, VIC

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CAPITAL MANAGEMENT
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CAPITAL MANAGEMENT| HALF-YEAR RESULTS TO 31 DECEMBER 2022

DEBT FACILITIES

• Average borrowings for the half-year $473.6 million (up 1.6 per cent on prior corresponding period)

• 3.3 per cent per annum weighted average cost of debt after hedging (2021: 3.2 per cent per annum)

• Borrowing costs for the half-year $7.8 million (up 4.0 per cent on prior corresponding period)

• As at 31 December 2022:

• Hedging cover: 53.3 per cent

  • Weighted average rate on duration of 1.4 per cent excluding margins

  • Weighted average term to maturity 4.1 years

• Interest cover: 8.6 times (2021: 8.7 times)

• Gearing: 15.3 per cent (2021: 15.5 per cent)

• A- / Stable S&P rating and A3 Moody’s rating

As at 31 December 2022	Limit ($m)	Drawn ($m)	Expiry
CBA	110	55	31 Jul 2025
SMBC	110	110	15 Mar 2027
WBC	135	54	30 Apr 2026
Corporate bonds – seven-year	150	150	10 Apr 2026
Corporate bonds – seven-year	100	100	24 Mar 2028
Total/weighted average	605	469	3.7 years

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CAPITAL MANAGEMENT | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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DEBT DURATION DEBT MATURITY PROFILE AS AT 31 DECEMBER 2022

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400
135.6
300
109.4
200
150.0
100
110.0
100.0
0
FY FY FY FY FY FY
23 24 25 26 27 28
Bonds Drawn bank facilities Undrawn bank facilities
Volume (A$M)
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CAPITAL MANAGEMENT | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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BUNNINGS THORNLEIGH, NSW

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OUTLOOK
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OUTLOOK | HALF-YEAR RESULTS TO 31 DECEMBER 2022

OUTLOOK

Operating environment

Portfolio

• The Trust remains well positioned operationally with 99 per cent[1] of rental income from Bunnings and other national large format retailers which have been trading well

• Demand for Bunnings Warehouse properties is expected to remain relatively resilient in the near term given the strength of the Bunnings covenant

• Primary focus for the remainder of the financial year is on leasing vacancies in the portfolio, progressing store upgrades, and extending existing leases with Bunnings through the exercise of options

• The Trust will continue to look for opportunities to acquire assets where there is good potential for value creation

Rental growth

• 23 CPI/ 22 fixed rent reviews in second half FY2023

FY2023 distribution

• Three Bunnings MRR’s to be finalised in FY2023 > Subject to there being no major disruption to the

• (in addition to one unresolved from FY2021 and Australian economy, the Trust could expect the

• three unresolved from FY2022) distribution for the year ending 30 June 2023 to be similar to the ordinary distribution paid for the year ended 30 June 2022. Capital profits may be utilised to support the distribution

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1 As at 31 December 2022

OUTLOOK | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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QUESTIONS?

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QUESTIONS | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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FURTHER INFORMATION

Responsible entity: BWP Management Limited Tel: +61 8 9327 4356 Email: investorrelations@bwptrust.com.au

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FURTHER INFORMATION | HALF-YEAR RESULTS TO 31 DECEMBER 2022

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