BWP GROUP — Investor Presentation 2004

Feb 23, 2004

Investor Presentations - February 2004

www.bunningspropertytrust.com.au

Presentation format

• Presenters $\sum_{n=1}^{\infty}$
• Andrew Hopkins, Manager $\overline{\phantom{a}}$
• Gene Tilbrook, Director
• Outline Seconds
• Structure
• Key events/results
• The tenant
• Portfolio
• Acquisition/Development process
• Capital management
• Financial performance
• Outlook

Structure

• Manager: Bunnings Property Management (BPML) Superior
• subsidiary of WES
• independent board
  • Bill Cairns (Chairman); AVR, ex GPT, FAL, WAN ⋟
  • Robert McCuaig; Colliers, Multiplex, PAO. $\geq$
  • Peter Mansell; Freehills, WAN, FAL, HPL, Zinifex $\blacktriangleright$
  • Gene Tilbrook, WES, Gresham, ARG ⋟
• independent property valuations
• Tenant: Bunnings Pty Ltd (Bunnings) Collage Street
• subsidiary of WES
• Register Seconds
• WES 22%
• "institutions" approx. 34%
• retail approx. 44%

Events - highlights

• $\triangleright$ Acquisitions/Developments
• 1 development site acquired
• 2 warehouses developed
• 1 distribution centre developed
• $> 15\%$ Market rent review uplift on 12 properties

• Revaluation of 6 properties up 25% on book value

• $\triangleright$ Successful \$25.0m capital raising

Results - highlights

Note: all as at 31 Dec 2003

Results - reconciliation against estimate

The Tenant $-$ a strong performer with 122 Warehouses

Engelska

. . . . . . . . . . . . . . . . . . . .

The Tenant - recent activity and outlook

• $\triangleright$ H2004 Trading
• $$2.0b$ revenue; $\uparrow$ 12% on pcp
• Store on store cash sales 1 13%, trade sales $\sqrt{2\%}$
• $-\frac{1}{2}$ \$212m EBITA; $\uparrow$ 8% on pcp
• Ongoing Inventory management

Series 7000 Warehouse

Series 3000 Warehouse

The Tenant $-$ 100% occupancy; 11.3 yr ave. lease expiry

O

Acquisition/Development Process - greenfields

• Bunnings identifies site
• Visible & accessible/usually industrial land
• Typically 3 hectares/significant catchment area
• Option to purchase
• Bunnings 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
• Bunnings 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 - value now exceeds \$500m

Portfolio - 3 yearly valuation cycle (minimum)

• Revaluation reserve now \$37.6m (inc 3 revals post 31 Dec 03) .
  P
• Properties currently being revalued in VIC (4), NSW (1), ACT (1) gan (
• Portfolio weighted average cap. rate 9.0% e de la companya de la companya de la companya de la companya de la companya de la companya de la companya de
  La companya de la companya de la companya de la companya de la companya de la companya de la companya de la co

Portfolio - rent review task and process

$\triangleright$ Task

• 2003/04
• Vic $(11)$ , QLD $(4)$ , WA $(3)$ , NSW $(1)$ , ACT $(1)$
• 7 properties in 2004/05
• WA $(2)$ , QLD $(2)$ , SA $(2)$ , Vic $(1)$
• Basis
• rent paid by lessee at other premises in same State 腦
• rent paid by others in comparable premises in same State M
• market review underpinned by commencement rent 腦

$\triangleright$ Process

• Lessor to give 2 months notice to lessee
• Lessee has 15 business days to dispute
• Umpire's decision if parties cannot agree

Portfolio - rent review status

• $\geq 20$ notices issued for 2003/04
• QLD $(3)$ negotiated outcome
• VIC (4), WA (3); determined Dec 03
• ACT (1), NSW (1), determined Feb 04
• Balance VIC (7), QLD (1) negotiate/determine

Portfolio - 15% uplift from rent reviews to date

	Passing Rent (\$ pa)	Market Review (\$ pa)	Uplift	Effective Date
QLD
Burleigh Heads	1,016,650	1,113,000	$+9.5%$	22 Oct 03
Southport	1,008,869	1,103,000	$+9.3%$	10 Nov 03
Underwood	952,532	1,023,000	$+7.4%$	22 Oct 03
			$+8.8%$
VIC
Altona	722.005	866,000	$+19.9%$	24 Sep 03
Fountain Gates	833,083	965,000	15.8%	24 Sep 03
Nunawading	1,221,855	1,400,000	3≹14.6%	24 Sep 03
Sandown	777,544	815,000	1+4.8%	24 Sep 03
			413.8%
WA
Balcatta	1,110,777	1,305,000	$+17.5%$	25 Sep 03
Joondalup	805,313	906,000	$+12.5%$	25 Sep 03
Mandurah	710,954	765,000	$+7.6%$	2 Dec 03
NSW/ACT			$+13.3%$
Tuggeranong	842,597	1,070,000	$+27.0%$	1 Dec 03
Minchinbury	954,843	1,256,400	$+32.0%$	31 Dec 03
			$+29.4%$

Perry drift

Capital Management - overview

• \$156m equity raised post IPO Seconds
• \$25.0m underwritten UPP (Nov 03)
• \$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 Sure
• Preferred range of 20% to 40% (debt to total assets)
• Weighted average cost 5.7% (exc. margins)
• NAB bill facility limit \$175m
• Distribution reinvestment plan $\rightarrow$
• Uptake Feb 04 : 44% unitholders (57% unitholdings)
• 2.5% market discount (Feb 04 : \$1.53 per unit)

Capital Management - gearing on target

Capital Management - debt actively managed

Financial Performance - consistent DPU growth

Outlook

. P	Acquisition opportunities			- ex BBS rollout (8 to 12 pa)
		ex BBC properties
		- ex third party owners
		New Zealand rollout (target 25)
		- 3000 Series rollout 4 pa (target)
Source Service		Rent reviews - 8 more results due in 2003/04
		$-7$ properties in 2004/05
$\overrightarrow{p}$	Revaluations – each property at least every $3$ years
		2003/04	2004/05	2005/06	2006/07	2007/08
	Rent reviews	20			7
	Revaluations	24 1		17	25

1. likely