BWP GROUP — Investor Presentation 2008

Feb 20, 2008

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Half-year to 31 Dec 07

Presentation Outline

� Structure

� Performance for the half-year

� Fundamentals

• Portfolio

• Lease covenant

• Capital Management

� Outlook

Structure

• Manager: Bunnings Property Management Limited

Subsidiary of WES; but… independent board

• John Austin (Chairman); Leighton Properties (Chairman), MREEF, Ringmer Pacific, ex JLL

• Peter Mansell; WAN (Chairman), ZFX (Chairman), GTP

• Peter Johnston; ex WES

• Rick Higgins (joined Dec 07); ex Colliers

• Major Tenant: Bunnings Group Limited

• subsidiary of WES

• Register

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• WES 23%

�

Performance: half-year to 31 Dec 07

• Revenue

$31.9 million

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11.1% on pcp

• Distributable profit (excl. unrealised gain in fair value)

• $19.8 million

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2.0% on pcp

• Final distribution

• NTA

6.55 cpu 2.0% on pcp $2.30 per unit $0.32 on pcp

6.55 cpu

• Market capitalisation

$704 million 8.3% on pcp

Performance: half-year to 31 Dec 07

• Acquisition, development & upgrades ($8.6m)

• ($2.9m) - acquired 1.2 ha site adjoining Trust’s BWH Geraldton, WA

• ($0.5m) - developed into two bulky goods tenancies

• ($3.4m) - major upgrade BWH Morayfield, Qld @ 8% yield

• ($1.8m) - improvements of other Trust properties

• 3 Market rent reviews completed

• rental uplift of $113k pa

• Net revaluation gain $14.2m (rental growth driven)

Performance: DPU growth

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Interim DPU Final DPU
14.00
12.00
10.00
6.56
6.39
6.17
5.87
8.00 5.35
4.86 4.97
4.68
6.00
4.70
4.00
6.22 6.42 6.55
5.51 5.79
5.15
4.70 4.50 4.80
2.00
2.50
0.00
1 2
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08
DPU (cents
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Portfolio: 58 properties – good geographic spread

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Dec 07
VIC 20
NSW/ACT 13
QLD 10
WA 12
SA 3
8
�
TOTAL 58
� 10 � 2
1 2
� �
1 � 1 � 1
�
12
�
� 50 BWH’s � 18
2
�
� 2 Bunnings Distribution Centres
� 2 BWH development sites
� 3 Blackwoods properties
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Portfolio: 7.4 year weighted average lease expiry

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20
16
2
12
Non BWH
1
1
BWH
8
14
10
9
4 8
6
3
2
0 1 1
2 3 4 5 6 7 8 9 10 11 12 13
Term to lease expiry (years)
Number of leases
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� Typical BWH lease features

5 + 5 + 5 (plus 2 x 5 year options)

�

Portfolio: market rent reviews

• BWH’s every 5 years – by reference to comparable BWH’s.

• If not agreed then to third party determination.

• Half-year: 3 market rent reviews concluded, 2 negotiated and 1 determined by an independent valuer.

• 5 market rent reviews currently being either negotiated or determined by an independent valuer.

• Cairns and Hervey Bay, QLD

• Artarmon, Belrose and Wollongong NSW.

Portfolio: revaluations

• Property revaluations

• 3-yearly independent valuations

• directors’ valuation supported by an independent review on all properties not subject to an independent valuation at each balance date

• Half-year: 2.4% increase in fair value on Jun 07 (rental growth driven)

• Weighted average cap rate 6.6%

• FY08 – 16 independent revaluations

• FY09 – 17 independent revaluations

Portfolio: recent acquisitions

� BWH development, Hawthorn, VIC (acquired in Apr 07)

• 9km east of CBD

• 0.84ha site

• 7,462m² BWH

• two level concept store with two levels of undercover car park

• BWP acquired site ($19.0m) with development agreement in place

• development risk remains with vendor/developer

• BWP final payment ($24.0m) on completion of development expected Dec 08

• commencing rent $2.7m - yield 6.25%

Portfolio: recent acquisitions (cont’d)

• Geraldton Showrooms, WA ($2.9m + $0.5m improvements)

• 1.2 ha site adjoining Trust’s BWH

• total retail area 1,591m[2]

• 1,200m² leased to BCF (Super Cheap Auto Group )

• 391m² vacancy

• � development at rear possible

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NEW
BULKY GOODS
BWH
SUBJECT
PROPERTY
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Portfolio: recent acquisitions (cont’d)

� Blackburn, VIC ($19.0m) – Jan 08

• 18km east of Melbourne CBD; near Nunawading ‘Golden Mile’ bulky goods precinct

• 4.1ha site; 20,464m² office/warehouse facility

• 2 major tenants (Gainsborough, Sleepmaster) 95% of income

• net income $1.43m

• � passing yield 7.5%

• WALE 4 years

• Long term redevelopment site

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Whitehorse Rd
Whitehorse Rd
Nunaw a ding BWH
(Trust owned)
Railway line
Subject property Railway line
Subject property
Nunawading BWH
(Trust owned )
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BWP Major Tenant – Bunnings Group Limited

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ	0 50 100 150 200 250 300 350 400 450 500 EBITA ($m) BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~ Strong underlying business across AUS and NZ
	BWP established ~~SMI~~ ~~acquis~~i~~t~~i~~on~~

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1998 1999 2000 2001 2002 2003
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Major tenant: the rollout continues

• FY07 network

• 13 BWH openings

• 3 small format openings

• 31 store upgrades

• 7 smaller format closures

• Sale of 11 BWH’s (6 Aus; 5 NZ) for > AUD $203m

• Sale of 7 Australian BWH’s under way

Capital management: debt facilities

	Limit ($m) Drawn ($m) Expiry
ANZ NAB Westpac Westpac	100 93 31 Jan 2009 100 99 31 Mar 2008* 50 50 28 Nov 2008# 30 30 31 July 2008#
	280 272

• NAB - review date only

Westpac - prior to 31 Dec 07 Westpac offered to combine the two limits and extend the facility to 28 September 2009.

Post 31 Dec 07

Capital management: gearing well within target range

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50%
40%
Preferred range
30%
20%
10%
0%
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Capital management: interest rate management

BWP Hedge Book Overview

	BWP Hedge Book Overview
	Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Jun 07 Dec 07
% Debt hedged1 Swap rates (%) - maximum - minimum	98 6.62 4.97 95 6.62 4.97 102 6.62 4.97 100 6.62 4.97 90 6.62 4.97 88 6.62 4.97 82 6.67 5.09 82 6.87 5.09

1interest bearing debt

• $221.5m hedged (82%)

• � 6.24% weighted ave rate including margins/fees � 2.5 yrs weighted ave maturity (including delayed starts)

Outlook

BWH’s continue to be the primary focus for growth, however other acquisition opportunities will be considered that meet the Trust’s investment criteria

• Acquisitions

• BWH’s from Bunnings or third party owners (97 BWH’s), either established stores or development sites with Bunnings pre-commitment

• non-Bunnings leased properties that meet the investment criteria

  • well located

  • long term leases

substantial lease covenants

Outlook (cont’d)

• Improve existing Trust owned properties

• upgrades circa $5 - $10m pa

• BWH Morayfield ($3.4m) & BWH Mile End ($2.4m)

• upgrades currently under consideration ($4.4m)

• utilise surplus land, a /a Bayswater Showrooms, Geraldton

• Grow rental income from existing portfolio

FY08 FY09 FY10 FY11 FY12 Rent reviews 7* 21 13 4 7

Outlook (cont’d)

ont’d)
Q1 FY09	Q2 FY09	Q3 FY09	Q4 FY09
Altona	Rocklea	Cannon Hill	Lismore
Broadmeadows	Burleigh Heads	Epping	Bayswater
Mentone	Underwood
Sandown	Southport
Scoresby	Hemmant (DC)
Sunshine	Port Macquarie
Balcatta	Tuggeranong
Joondalup	Minchinbury

Outlook (cont’d)

� Constraints to Growth:

� low property yields

• rising interest rates

Disclaimer

To the maximum permitted by law, Bunnings Property Management Limited disclaims all liability and responsibility for any direct or indirect loss or damage that may be suffered by any person through relying on anything contained in or omitted from this presentation.