BWP GROUP — Investor Presentation 2003

Aug 26, 2003

August 2003

www.bunningspropertytrust.com.au

Presentation Outline

• Structure

• $\triangleright$ The tenant

• Acquisition/development process

• Portfolio

• $\triangleright$ Capital management

• Performance

• ▷ Outlook

Structure Overview

• Manager: Bunnings Property Management (BPML) Sept
• Subsidiary of WES; but...
• Independent board
  • Bill Cairns (Chairman); AVR; ex GPT, FAL, WAN 盜
  • Robert McCuaig; Founder of Colliers; Multiplex 鋈
  • Peter Mansell: Freehills, WAN, HPL 丝
  • Gene Tilbrook; WES, Gresham, ARG 丝
• Independent property valuations

• Tenant: Bunnings Building Supplies Pty Ltd (BBS)

• Subsidiary of WES
• Register September 1878
• WES 23%
• "Institutions" approximately 33%
• Retail approximately 44%

ASSESSMENT

The Tenant $-$ a strong performer with 116 Warehouses

Z

The Tenant - recent business activity

• $\triangleright$ Trading
• Store on store cash sales $\uparrow$ 11%, trade sales $\downarrow$ 4%
• Inventory realignment and writedown
• Store rebranding

Series 3000 Warehouse

Stores

Marehouse openings 8 to 12 pa

• Upgrade / conversion programme
• 3000 Series
• Metro and regional opportunities Ø
• Market potential \$1 billion

29 locations identified

Series 7000 Warehouse

Gariac Güüt Waretun

The Tenant $-$ 100% occupancy; 11.7 yr ave. lease expiry

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Acquisition/Development Process - greenfields

• BBS identifies site (8 to 12 pa)
• Visible & accessible/usually industrial land
• Typically 3 hectares/significant catchment area
• Option to purchase
• BBS may offer to BPML
• Full development proposal
• BPML investment criteria applied
• Not all properties offered/not all offers accepted
• If offer accepted by BPML
• BPML purchases site
• BBS usually Project Manager
• Low risk to BPML/stamp duty minimised

Acquisition/Development Process - other

More opportunistic purchases possible

Portfolio - 49 properties; geographic spread improving

Portfolio – NZ and 3000 series opportunities

New Zealand Support

• BBS rollout 25 stores (targeted)
• Logical growth opportunity for BWP
• Structuring options under review by BWP
• $\triangleright$ 3000 Series
• Metro and regional properties
• 29 locations identified by BBS
• BBS rollout 4 pa (targeted)

BE INSIDE RETAILING BE

Bunnings to open 25 stores in NZ

The Bunnings Warehouse retail juggernaut plans to open 25 stores in New Zealand.

There are currently three Bunnings Warehouse stores in Auckland following the BBC Hardware takeover which saw HardwareHouse stores rebadged prior to Christmas last year.

Bunnings has three new stores under construction at Christehurch. Hamilton and Porirus.

Set to open in October, the Christchurch store will be one of Bunnings' 14,500sq m new generation Warchouse stores similar to the Frankston and Oakleigh stores in Melhourne.

Bunnings is also understood to be close to a deal on a former Honda car assembly plant site near Nelson airport at the top of the South Island.

Portfolio - growth being maintained

Portfolio - 3 yearly valuation cycle

Revaluation reserve now \$23 4m

▶ Positive for NTA & impending market rent reviews

Portfolio - rent reviews underway

• $\triangleright$ Task
• 20 properties in 2003/04; 18 prior to 31 Dec 03
  • 11 in Vic, 4 in Qld, 3 in WA, 2 in NSW/ACT
• Basis
  • rent paid by lessee at other premises in same State
  • rent paid by others in comparable premises in same State
  • market review underpinned by commencement rent
• ▷ Process
• Lessor to give 2 months notice to lessee
• Lessee has 15 business days to dispute
• Umpire's decision if parties cannot agree

Portfolio - 15 rent review notices issued already

$\triangleright$ Notices issued already (15)

• VIC $(10)$ , WA $(2)$ ; due 24 Sept 03
• QLD (3); due 22 Oct 03 (2), 10 Nov 03 (1)
• $\triangleright$ Balance (5) to be issued in FY 2004
• ACT, WA; due 1 Dec 03
• NSW; due 31 Dec 03
• $-$ VIC; due 12 Mar 04
• QLD; due $18$ Mar 04
• $\triangleright$ Annualised rent at 30 Jun 03
• Total portfolio: $$38.0m$
• Rent review properties: \$17.5m
  • VIC \$9.2m, QLD \$3.9m, WA \$2.6m, NSW/ACT \$1.8m

Capital Management - overview

• $\triangleright$ \$131m equity raised post IPO
• \$33.7m placement (Nov 02)
• \$29.5m one for eight rights issue (Oct 01)
• \$23.9m placement (Sept 01)
• \$44.0m one for three rights issue (Jan 00).
• Borrowings Jan
• Preferred range of 20% to 40% (debt to total assets)
• Weighted average cost 6.2% (inc. margins)
• NAB bill facility limit \$175m
• Distribution reinvestment plan Super
• Uptake Feb 03 : 43% unitholders (54% unitholdings)
• 2.5% market discount (Sept 03 : \$1.50 per unit)

Capital Management - gearing on target

August 2006

Capital Management - debt actively managed

30 Jun 03: 5.68% weighted average (exc. margins/fees) $\begin{picture}(20,20) \put(0,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{0.5}(10,0){ }} \put(15,0){\dashbox{$

Financial Performance - consistent DPU growth

FY 2003 DPU 10.50 cents (1 7.5% on pcp) Support

ASSESSMENT

ASSESSMENT

Outlook

• Acquisition opportunities ex BBS rollout (8 to 12 pa) Service
• ex BBC properties
  • ex third party owners
  • New Zealand rollout (target 25)
  • 3000 Series rollout 4 pa (target)
• Rent reviews on 20 properties in 2003/04 Series
• Revaluations each property at least every 3 years SALARE

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2003/04	$2004/05$ 2005/06	2006/07 ********	2007/08
Rent reviews
Revaluations