BWP GROUP - Proxy Solicitation & Information Statement 2011

BUNNINGS WAREHOUSE PROPERTY TRUST ARSN 088 581 097

NOTICE OF UNITHOLDERS’ MEETING AND EXPLANATORY MEMORANDUM

To consider the proposed acquisition of 13 Bunnings Warehouse properties

(including a report on the transaction from PricewaterhouseCoopers Securities Ltd as Independent Expert)

To be held on Wednesday 30 March 2011 at 10.00am AWST. The Board of Directors of the Responsible Entity recommends that unitholders vote in favour of the Resolution.

This is an important document. Please read the information in this booklet very carefully. It is important that you either attend the meeting or complete and lodge the enclosed proxy form.

Responsible Entity

Bunnings Property Management Limited ABN 26 082 856 424

Level 11, Wesfarmers House 40 The Esplanade PERTH WA 6000

Telephone: (08) 9327 4356 Facsimile: (08) 9327 4344 www.bwptrust.com.au

Directors and Management

JA Austin (Chairman) BJH Denison (Director) RD Higgins (Director) PJ Johnston (Director) PJ Mansell (Director) GW Gernhoefer (General Manager) KA Lange (Company Secretary)

Registry Manager

Computershare Investor Services Pty Limited

Level 2, 45 St Georges Terrace PERTH WA 6000 Mail: GPO Box 242, Melbourne, VIC 3001, Australia.

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

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

Solicitor

Freehills

QV1 Building 250 St Georges Terrace PERTH WA 6000

1 2 3 4

5 6 7

Chairman’s Letter ......................................... 1 Notice of Meeting of Unitholders ............... 2 Important Information .................................. 3 Explanatory Memorandum 4.1 Resolution: Acquisition of properties ....... 4 4.2 Property Details ...................................... 12 Independent Expert’s Report .................... 25 Schedule 1 – Terms of leases ................... 48 Schedule 2 – Glossary ............................... 49

==> picture [256 x 184] intentionally omitted <==

Pakenham, VIC Cover photo: Belmont, WA

==> picture [35 x 75] intentionally omitted <==

Chairman’s Letter

17 February 2011

Dear unitholder

Bunnings Property Management Limited, the Responsible Entity of the Bunnings Warehouse Property Trust (“the Trust”) invites you to a unitholders’ meeting to be held at 10.00am AWST on 30 March 2011 to vote on a resolution relating to the acquisition of 13 Bunnings Warehouse properties by the Trust from Bunnings Group Limited (“BGL”), a subsidiary of Wesfarmers Limited.

The Directors of the Responsible Entity welcome the opportunity to add these properties to the Trust’s portfolio. All properties are located in metropolitan cities or large regional centres throughout New South Wales, Queensland, Victoria and Western Australia. Ten of the properties are operational Bunnings Warehouses recently completed or soon to be completed, and three properties are land on which BGL will develop Bunnings Warehouses for the Trust. The properties will be subject to leases with BGL for an initial term of 10 years. Details of the properties are set out in sections 4.1 and 4.2 of the enclosed Explanatory Memorandum. Consistent with the Trust’s core purpose, this portfolio is expected to provide Unitholders with a secure, growing income stream and long-term capital growth.

The $241.7 million purchase price plus transaction costs will be funded by a mix of the Trust’s existing debt capacity and the proceeds of a fully underwritten, 1 for 4.84 entitlement offer. Information regarding the entitlement offer is provided in this document and additional detail is available in an announcement made to the ASX on Thursday 17 February 2011 and in a Retail Entitlement Offer document which is to be sent to eligible unitholders. Details are also available on the Trust’s web site at www.bwptrust.com.au.

The entitlement offer is not subject to unitholder approval and will proceed regardless of whether the resolution to acquire the proposed portfolio is approved by unitholders. The entitlement offer was undertaken in advance of the unitholders’ meeting to provide certainty of the availability and cost of funding, ensuring the viability of acquiring the portfolio. An entitlement offer was considered to be more appropriate than other forms of raising equity, by allowing all eligible unitholders to participate on equal terms, on a pro-rata basis.

Due to the value of the portfolio to be acquired and the fact that the properties are to be acquired from BGL, a company related to the Responsible Entity, unitholder approval is required under ASX Listing Rules. An independent expert’s report prepared by PricewaterhouseCoopers Securities Ltd, a copy of which is included in section 5 of this document, concludes that the acquisition of the properties by the Trust as proposed is fair and reasonable to unitholders not associated with the transaction.

Details of the resolution relating to the acquisition of the portfolio and the arrangements for the meeting are provided in the accompanying Notice of Meeting and Explanatory Memorandum. I urge you to read these carefully and vote, either by proxy or in person, at the unitholders’ meeting to be held on Wednesday 30 March 2011 at 10.00am AWST in Meeting Room 6, Level 2, Perth Convention and Exhibition Centre, 21 Mounts Bay Road, Perth, Western Australia. If you are unable to attend the meeting, a proxy form has been enclosed and I encourage you to return your vote in the reply-paid envelope provided.

The Directors of the Responsible Entity recommend that unitholders vote in favour of the Resolution.

Yours sincerely

JA Austin Chairman Bunnings Property Management Limited

Bunnings Warehouse Property Trust Notice of Meeting 1

==> picture [56 x 77] intentionally omitted <==

Notice of Meeting of Unitholders

Time: 10.00am AWST Date: Wednesday, 30 March 2011 Place: Meeting Room 6, Level 2 Perth Convention and Exhibition Centre, 21 Mounts Bay Road, Perth, Western Australia

Notice is hereby given that a general meeting of unitholders of the Bunnings Warehouse Property Trust will be held in Meeting Room 6, Level 2, Perth Convention and Exhibition Centre, 21 Mounts Bay Road, Perth, Western Australia on Wednesday 30 March 2011 at 10.00am AWST.

BUSINESS OF THE MEETING

Ordinary business

Resolution: Acquisition of properties

To consider and, if thought fit, to pass, with or without amendment, the following as an ordinary resolution:

“That for the purposes of ASX Listing Rule 10.1 and for all other purposes, the unitholders of the Bunnings Warehouse Property Trust (the “Trust”) approve and authorise Bunnings Property Management Limited, as responsible entity of the Trust, to enter into agreements with Bunnings Group Limited or its subsidiaries to acquire and lease back the “Warehouse Properties” as described in the Explanatory Memorandum and on the terms and conditions summarised in the Explanatory Memorandum accompanying the notice of meeting.”

By order of the Board

==> picture [110 x 67] intentionally omitted <==

KA Lange Company Secretary Bunnings Property Management Limited

17 February 2011

2 Bunnings Warehouse Property Trust Notice of Meeting

Notice of Meeting

==> picture [57 x 78] intentionally omitted <==

IMPORTANT INFORMATION

CHAIRMAN

The Responsible Entity has nominated its Chairman, Mr John Austin, as the Chairman of the meeting.

VOTING

Your vote is important. You are encouraged to attend and vote at the meeting. If you plan to attend the meeting, we ask that you arrive at the meeting venue early to complete registration formalities.

If you cannot attend the meeting, you should complete the proxy form accompanying this Notice of Meeting. Please read the instructions on the proxy form carefully.

HOW DO YOU EXERCISE YOUR RIGHT TO VOTE?

All unitholders appearing on the Bunnings Warehouse Property Trust unit register at 4.00pm AWST on Monday 28 March 2011 are entitled to attend and vote at the meeting.

On a show of hands you have one vote. On a poll you have one vote for each unit you hold.

Voting by Proxy

If you cannot attend, you may appoint a proxy to attend and vote for you. A proxy does not have to be a unitholder of the Trust. To ensure that all unitholders can exercise their right to vote on the proposed Resolutions, a proxy form is enclosed with this Notice of Meeting together with a reply-paid envelope.

Unitholders are entitled to appoint up to two persons to attend the meeting and vote and may specify the proportion or number of votes each proxy is appointed to exercise.

Proxy forms must be deposited at the Bunnings Warehouse Property Trust Registry, Computershare Investor Services Pty Limited, Level 2, 45 St Georges Terrace, Perth WA 6000 in person, by mail or by facsimile to be received not less than 48 hours before the time of the meeting. Alternatively, they can be faxed or mailed to the registry’s Melbourne office at GPO Box 242, Melbourne, Victoria, 3001 in the reply-paid envelope provided.

The proxy form provides details of what you need to do to appoint a proxy to attend and vote for you. Additional instructions are provided on the reverse of the form.

Jointly held units

If your units are jointly held, only one of the joint holders is entitled to vote. If more than one holder votes in respect of jointly held units, only the vote of the holder whose name first appears on the register will be counted.

Corporations voting

In order to vote at the meeting a corporation, which is a unitholder, may appoint a proxy to vote on its behalf.

Alternatively, a corporation may appoint a person to act as its corporate representative. A representative does not have to be a unitholder of the Trust. The appointment must comply with section 253B of the Corporations Act. The representative should bring to the meeting evidence of his or her appointment including any authority under which it is signed.

VOTING EXCLUSIONS

None of Bunnings Property Management Limited, Wesfarmers Investments Pty Ltd, BGL or any of their associates can vote on the Resolution, unless the vote is cast by:

a person as proxy for a person who is entitled to vote, in accordance with the directions of the proxy form;
the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides; or
an associate of Bunnings Property Management Limited, provided that associate has no interest in the Resolution other than as a member of the Trust.

The voting limitations under the Listing Rules and the Corporations Act are complex. If you are in doubt as to your eligibility to vote on the Resolution, you should seek legal advice.

Bunnings Warehouse Property Trust Notice of Meeting 3

==> picture [56 x 75] intentionally omitted <==

Explanatory Memorandum

Please refer to the Glossary in Schedule 2 for the meaning of any defined terms in this Explanatory Memorandum.

4.1 RESOLUTION - Acquisition of Bunnings Warehouse Properties

Description of the proposed transaction

The Responsible Entity has reached agreement with BGL for the sale and leaseback by BGL of a portfolio of properties (“Portfolio Acquisition”). The Portfolio Acquisition entails:

the Responsible Entity, on behalf of the Trust, acquiring from BGL a portfolio of ten operational Bunnings Warehouses and three properties on which BGL will develop Bunnings Warehouses (collectively, “the Warehouse Properties”); and
BGL leasing each of the completed Warehouse Properties from the Trust for an initial fixed term of 10 years, and with a further five optional terms of five years each, exercisable by BGL, at commencing annual rentals and on lease terms and conditions that have been agreed by the parties.

The total purchase price of approximately $241.7 million represents the total amount payable to BGL assuming the acquisition of all 13 properties and completion of the Bunnings Warehouses to be developed by BGL. In addition, transaction costs of $11.6 million will be incurred. A summary of the Warehouse Properties, including the proposed purchase price and commencing rentals under the leases is included in Table 1.

Table 1 - Summary of Warehouse Properties

==> picture [443 x 290] intentionally omitted <==

----- Start of picture text -----

Property Status Approx. Gross Initial Initial Purchase Estimated
land lettable net rent yield price date of
area (ha) area(m [2] ) ($000) (%) ($000) settlement/
completion
NSW Dubbo [#+] Operational 4.5 10,034 1,295 8.20 15,790 Jun 11
NSW Greenacre Development 2.2 11,159 2,215 7.38 30,000 [^] Oct 11
NSW Wagga Wagga Operational 3.6 9,497 1,200 8.00 15,000 Apr 11
NSW Wallsendo Development 5.6 10,882 1,650 7.75 21,290 [^] Jun 12
QLD Fairfield Waters Operational 2.9 10,939 1,390 7.75 16,950 [~] Apr 11
QLD Smithfield [+] Operational 3.1 10,704 1,300 8.00 15,250 [~] Apr 11
VIC Caroline Springs Operational 3.0 12,020 1,450 7.60 19,080 May 11
VIC Craigieburn [+] Operational 4.6 10,726 1,400 7.60 18,420 Jun 11
VIC Pakenham [#] Operational 3.5 12,410 1,600 [◊] 7.90 20,250 Apr 11
WA Belmont Operational 2.2 8,215 1,250 7.50 16,670 Apr 11
WA Cockburn Operational 2.6 10,212 1,400 7.50 18,670 Apr 11
WA Harrisdale Development 3.7 10,081 1,325 7.40 17,900 [^] Oct 11
WA Port Kennedy [+] Operational 2.8 9,671 1,315 8.00 16,440 May 11
Total/weighted average 3.4 10,497 18,790 7.71 241,710
----- End of picture text -----*

Gross lettable area is the fully enclosed covered area of the Bunnings Warehouse and other tenancies where applicable
Dubbo and Pakenham include non-BGL tenancies in addition to a Bunnings Warehouse
- Dubbo, Port Kennedy, Smithfield and Craigieburn acquisitions are subject to subdivision approval of vacant surplus land to be retained by BGL. In the unlikely event that subdivision approval is not obtained the acquisition of the property will not proceed.
^ Total price on completion of development. Harrisdale includes surplus land for future development by the Trust for separate retail/bulky goods showrooms

o Wallsend is conditional on BGL exercising an option to acquire the land from a third party and nominating the Trust as purchaser once development approval satisfactory to BGL is obtained

~ Purchase price is based on commencing rent less non-recoverable land tax
Net rent less non-recoverable single holding land tax from showrooms
4 Bunnings Warehouse Property Trust Notice of Meeting

Rent reviews

Under the leases for all the Bunnings Warehouses the rent increases by a fixed three per cent per annum. At the end of the initial term and the exercise of each option by the tenant the rents are subject to a market rent review, having regard to the rents paid at comparable properties. Market rent reviews for the Bunnings Warehouses are subject to a 10 per cent cap, meaning the rent cannot increase more than 10 per cent above the preceding year’s rent, and a 10 per cent collar, meaning that the rent will not fall more than 10 per cent below the preceding year’s rent.

The non-BGL tenancies all have annual fixed rental increases of four per cent per annum and market rent reviews on the exercise of each option. The market rent reviews for the Officeworks premises at Pakenham, Victoria, are subject to 10 per cent caps and collars.

Development properties

Three of the Warehouse Properties (Greenacre, Wallsend and Harrisdale) are being acquired as land on which Bunnings Warehouses are to be developed by BGL. For each of these three development properties the Trust has contracted with BGL to complete the development for a fixed amount.

Until the development is completed and ready for BGL’s occupation under the lease the Trust receives a monthly payment (“access fee”) equivalent to eight per cent per annum of the purchase price for the land and stamp duty in relation to Wallsend and eight per cent per annum of the purchase price of the land for Greenacre and Harrisdale. BGL is responsible for paying outgoings for all three developments until completion. The Trust only pays for the development once it is completed and the BGL lease commences. At that point, the Trust receives rent from BGL and the access fee and BGL’s responsibility for outgoings costs (other than is provided in the lease) ceases.

In the event that the development of the property is not completed by a specified sunset date, then the Trust is able to require BGL to buy the property from the Trust for the value of the purchase price and other acquisition costs paid by the Trust.

Further details of the Warehouse Properties and the terms and conditions of leases are included at pages 12 to 24 of this document.

Funding the Portfolio Acquisition

On 17 February 2011 the responsible entity announced a fully underwritten 1 for 4.84 accelerated non-renounceable entitlement offer of additional fully paid units in BWP (“Entitlement Offer”) which is expected to raise approximately $150 million. The Portfolio Acquisition is subject to the Trust raising sufficient equity, debt or both on or before 1 April 2011. The Entitlement Offer is being undertaken to fund, together with existing debt facilities, the purchase price and all other costs of the Portfolio Acquisition.

The Entitlement Offer is not subject to unitholder approval and will proceed regardless of whether the Resolution is passed. The decision to undertake the Entitlement Offer in advance of the unitholders’ meeting to consider the Portfolio Acquisition was based on a number of factors, including:

Funding certainty: the Entitlement Offer is fully underwritten, providing certainty of the availability and cost of funding for the Portfolio Acquisition. Its completion enables the Trust to maintain a conservatively geared balance sheet to provide financial flexibility for funding further acquisition opportunities and capital improvements to existing Trust properties. Completion of the Entitlement Offer provides greater certainty of the earnings impact of the Portfolio Acquisition.
Reduced execution risk: undertaking the Entitlement Offer in advance of the Unitholder Meeting avoids the challenge associated with raising equity after the announcement of a major transaction. Any delay in undertaking the Entitlement Offer may expose the Trust to market movements which could potentially lead to the Entitlement Offer being conducted at a lower price, which would have a negative impact on certain financial metrics of the Portfolio Acquisition due to the greater number of new units issued.

The proceeds of the Entitlement Offer will fund the first tranche of Warehouse Properties settled under the Portfolio Acquisition, expected to be in April 2011. The balance of funding required for the Portfolio Acquisition will come from the Trust’s existing debt facilities. The Trust has $330 million of bank bill facilities with the four major Australian banks and will have adequate capacity under bank facilities to fund the balance of payments as further Warehouse Properties are settled or as BGL completes the Bunnings Warehouse developments. The Trust’s facility with the Commonwealth Bank of Australia is due to expire in January 2012. The Responsible Entity has commenced negotiations to extend this facility and has no reason to believe that it will not be extended on acceptable commercial terms.

Bunnings Warehouse Property Trust Notice of Meeting 5

continued Explanatory Memorandum

Financial impact

The forecast effect of the Portfolio Acquisition on key financial measures is shown in Tables 2 and 3.

Table 2 – Forecast FY 2012 financial impact of the Portfolio Acquisition

Forecast full-year ending 30 June 2012	Pre Portfolio Acquisition and Entitlement Offer	Post Portfolio Acquisition and Entitlement Offer
Earnings per unit (cents)1	13.3	13.3
Distribution per unit (cents)1	13.3	13.3

Table 3 – Pro-forma financial position impact of the Portfolio Acquisition

==> picture [443 x 36] intentionally omitted <==

----- Start of picture text -----

Pre Portfolio Acquisition and Pro-forma post Portfolio
As at 31 December 2010
Entitlement Offer Acquisition and Entitlement Offer [2]
----- End of picture text -----

Number of units on issue (million)	427	515
Total assets ($000)	1,076,999	1,330,340
Total debt ($000)	193,574	300,665
Gearing (debt/total assets)	18.0%	22.6%
Net Tangible Assets per unit	$1.96	$1.91

The forecast of the financial impact of the Portfolio Acquisition takes into account the additional units issued under the Entitlement Offer. Units issued under the Entitlement Offer will rank equally with existing units and will be entitled to the final distribution for the six months ending 30 June 2011. Allowing for the additional units issued under the Entitlement Offer, the estimated distribution for the half-year to 30 June 2011 is 5.69 cents per unit. This brings the estimated total distribution for the 2011 financial year to 11.87 cents per unit, including the capital distribution of 0.09 of a cent per unit from the sale of the Trust’s Canning Vale property, which was included with the interim distribution.

Distributions for the 2012 financial year are forecast to be 13.3 cents per unit. The Portfolio Acquisition and Entitlement Offer are expected to have a neutral impact on this forecast. This forecast reflects management’s expectations of 100 per cent portfolio occupancy and a conservative estimate of income growth from structured and market rent reviews for the Trust’s existing properties (approximately 2.8 per cent like-for-like rental income growth). Adjusting for the impact of the Portfolio Acquisition and Entitlement Offer, the average rate of borrowing costs is estimated to be 8.3 per cent (inclusive of fees and margins) and borrowings are estimated to be 60 per cent hedged, on average, over the financial year.

The forecast also takes into account a partial waiver by the Responsible Entity of its entitlement to the management fee from the Trust relating to the Warehouse Properties. The management fee which, under the Trust’s constitution would otherwise apply to the value of the Warehouse Properties, will be reduced by 100 per cent from the date of settlement until 30 June 2012 and by 50 per cent for the year ending 30 June 2013.

In the medium term, to the extent that annual CPI increases and market rent reviews on the Trust’s existing properties are in excess of the annual fixed three per cent rental growth during the initial lease term of the Warehouse Properties, the growth profile of the Warehouse Properties may be lower than that of the Trust’s existing portfolio. However, this is a function of the timing of the Trust’s market rent reviews and in the longer term the Portfolio Acquisition is expected to provide unitholders with income growth comparable with the Trust’s existing portfolio.

In the event that the Portfolio Acquisition is not approved by unitholders, the net proceeds of the Entitlement Offer would be used to repay debt and held on deposit for future capital expenditure and acquisition opportunities.

1 Earnings and distribution per unit excludes any unrealised gains/losses on the revaluation of investment properties.

2 For comparative purposes, the pro-forma financial position assumes that the entire Portfolio Acquisition and Entitlement Offer settles on 31 December 2010, including properties with deferred settlement and developments.

6 Bunnings Warehouse Property Trust Notice of Meeting

In addition, costs to close out interest rate swaps ($1.2 million) and costs incurred to date in pursuing the Portfolio Acquisition (estimated at approximately $0.8 million) would be written off prior to 30 June 2011, reducing the final distribution for the year ending 30 June 2011 to an estimated 5.33 cents per unit. For the year ending 30 June 2012 forecast distributions would be 13.3 cents per unit and pro forma 31 December 2010 gearing would reduce to 4.4 per cent and and pro forma 31 December 2010 Net Tangible Assets would be $1.91 per unit.

Advantages of the Portfolio Acquisition

The anticipated benefits to the Trust of the Portfolio Acquisition include:

The Warehouse Properties are expected to provide Unitholders with a secure, growing income stream and long term capital and income growth, consistent with the objectives of the Trust. The Warehouse Properties will provide a platform for future earnings and capital growth based on:
Annual fixed rental increases of three per cent, other than in years where a market review is due, provide certainty of rental growth and establish a buffer against diminished rental growth for the Trust’s CPI indexed rents in a low inflationary environment. (CPI increases of rents of Trust properties for the year ended 30 June 2010 averaged only approximately 1.6 per cent.)
Market rent reviews provide the opportunity for market driven adjustment to rents, up to 10 per cent of the preceding year, at the exercise of each option (five yearly after the initial term).
Commencing rents are at the lower end of market for eight properties, which could improve the potential for meaningful improvement in rent and capital value at market rent reviews.
The Portfolio Acquisition will improve the geographic diversity of the Trust’s portfolio by reducing the reliance on rental income in Victoria and increasing exposure to New South Wales and Western Australia (refer to Table 4).

Table 4 – Geographic diversity of rental income as at 31 December 2010

==> picture [444 x 140] intentionally omitted <==

----- Start of picture text -----

State/Territory Pre Portfolio Acquisition Pro-forma, post Portfolio Acquisition [3 ]
New South Wales/
Australian Capital Territory 21% 23%
Queensland 18% 17%
South Australia 5% 4%
Victoria 40% 37%
Western Australia 16% 18%
----- End of picture text -----

The addition of the Warehouse Properties increases the forecast weighted average lease expiry at 30 June 2011 from 8.4 years to 8.7 years (assuming the leases for all 13 properties have commenced).
The acquisition of the three development properties allows the Trust to acquire interests in Bunnings Warehouses prior to construction, incurring some lower statutory charges than would apply to acquiring completed developments, and with negligible exposure to development risk.
The surplus land at the Harrisdale Warehouse Property provides the Trust with the opportunity to improve future returns by developing additional showroom tenancies, subject to necessary approvals.
The mix of debt and equity funding to acquire the Warehouse Properties allows the Trust to maintain a conservatively geared balance sheet to provide financial flexibility to undertake further acquisition opportunities and capital improvements to existing Trust properties.

3 For comparative purposes, the pro-forma position assumes that the entire Portfolio Acquisition and Entitlement Offer settles on 31 December 2010, including properties with deferred settlement and developments

Bunnings Warehouse Property Trust Notice of Meeting 7

continued Explanatory Memorandum

Acquiring the Warehouse Properties will make more efficient use of the proceeds of the Entitlement Offer by increasing pro-forma gearing at 31 December 2010 from 18.0 per cent to 22.6 per cent (refer to Table 3), within the Trust’s preferred gearing range.
The opinion of the Independent Expert set out in section 5 of the Explanatory Memorandum, is that the Portfolio Acquisition is fair and reasonable for unitholders not associated with this transaction.

Disadvantages of the Portfolio Acquisition

The potential disadvantages for the Trust as a consequence of the Portfolio Acquisition include:

The Portfolio Acquisition is estimated to decrease Net Tangible Assets per unit from $1.96 as at 31 December 2010 to $1.91, on a pro-forma basis (refer to Table 3).
In the medium term, to the extent that CPI and market rent reviews on the Trust’s existing properties are in excess of the annual fixed three per cent rental growth during the initial lease term of the Warehouse Properties, the growth profile of the Warehouse Properties may be lower than that of the Trust’s existing portfolio.
Transaction costs of approximately $11.6 million, predominantly comprising stamp duty, are expected to be incurred in relation to the Portfolio Acquisition. However these costs would be payable irrespective of whether the Properties were purchased from a related entity.
There are several risks associated with the Portfolio Acquisition which, if they were to occur, may have an adverse effect on unitholder returns. While not an exhaustive list, the following section outlines some of the key risks.

The Independent Expert's Report identifies other disadvantages.

Potential risks associated with the Portfolio Acquisition

The following potential risk factors may arise from the Portfolio Acquisition:

Returns are reduced as a result of unanticipated expenditure on the upkeep of the Warehouse Properties. Under the leases the tenant is responsible for maintaining the properties. The Trust is responsible for any expenditure for repairs of a structural nature and for maintaining and replacing plant and equipment serving the properties. Structural repairs may be required as a result of:
a) Fair wear and tear (gradual deterioration over time in the normal course of the life of the building and other improvements). This type of repair is generally predictable and is factored into financial analysis when considering the feasibility of acquiring the properties;
b) Accidental damage, which is generally covered by building insurance (subject to policy exclusions and conditions); and
c) Defects in design, materials or workmanship when the Warehouse Properties were constructed. The Trust has engaged engineering consultants to inspect each property prior to acquisition to determine any obvious or likely issues relating to the physical condition of the properties. Where any warranties or guarantees obtained by BGL for construction or materials defects remain current, BGL will continue to hold and enforce them for the benefit of the Trust or alternatively, elect to assign them to the Trust for its sole benefit.
Returns are reduced as a result of future funding costs being higher than anticipated. This risk relates to the costs of debt funding, which comprises approximately 42 per cent of the purchase price of the Portfolio Acquisition. A number of external factors can affect interest rates and the fees and margins lenders charge. The risks associated with the fluctuations in borrowing costs are managed as part of broader capital management practices of the Responsible Entity, including interest rate hedging and treasury management.
The capital values of the Warehouse Properties are adversely affected by market factors or property specific issues. Market factors affecting property values are a broader industry risk and managed in the context of the Trust’s longer-term strategies. Identifying property specific issues will be assisted by the due diligence process undertaken prior to acquisition. Other factors that may affect the future value of individual Warehouse Properties include changes in the local environment, such as changes to town planning or other local or State regulation, and changes in the physical, social or economic environment.

8 Bunnings Warehouse Property Trust Notice of Meeting

The Warehouse Properties do not achieve anticipated rental income. This may occur for a number of reasons, including:
a) A tenant does not meet its obligations to pay rent as and when it becomes due. The majority of income from the Warehouse Properties is derived from BGL. BGL’s business is a mature business that has performed well in the past and continues to expand. The risk of BGL defaulting under the leases or its business becoming unviable is considered to be low. The income from the Warehouse Properties that is not derived from BGL is from tenancies located on the same site as the Bunnings Warehouses at the Dubbo and Pakenham properties. Non-Wesfarmers tenants represent less than 3 per cent of the total rental income from the Warehouse Properties and the counter party risk is considered to be acceptable.
b) The rent does not grow over time as expected. Rents are subject to fixed annual increases except at the exercise of each option by the tenant, when rents are reviewed to market. There is no certainty of where rents of the Warehouse Properties will be relative to the market at the time of each market rent review. The commencing rents of eight of the Bunnings Warehouses are considered to be at the lower end of the range of current market rents and this may improve the potential for rental growth at the first market rent review. Increases in rent will be limited to 10 per cent of the preceding year’s rent under the Bunnings Warehouse leases.
c) The non-recoverable ongoing costs of the property increase above expectations. Currently the most significant recurring cost of operating the Warehouse Properties for which the Trust would be responsible is land tax. The rates at which land tax is applied and the values at which properties are assessed are determined by the relevant Government authority in each jurisdiction. Adverse changes in land tax are deemed to be a broader industry risk that is considered acceptable.
d) The tenant does not exercise its options to extend the lease. This would result in an alternative tenant having to be secured, with potential for a period of no rent while the property is re-leased and, possibly, a lower commencing rent, depending on market conditions at the time. We consider that there is a relatively low risk of BGL not exercising its first option over each Bunnings Warehouse, assuming no significant adverse change in BGL’s business, the broader economic and market conditions or the local environment. The five non-BGL tenancies, at the Dubbo and Pakenham Warehouse Properties, are a relatively low proportion of the rental income and the re-leasing risk is considered to be acceptable.
The purchase price and all other costs of the Portfolio Acquisition will be part funded by existing debt facilities. There is a risk that the Trust will not be able to refinance some or all of this debt maturity. The terms on which it is refinanced may also be less favourable than at present.

Requirement for unitholder approval

ASX Listing Rules require that unitholders approve the Portfolio Acquisition before it can be entered into. Unitholder approval is required because the Portfolio Acquisition:

is between related parties, due to Wesfarmers Limited, through a wholly-owned subsidiary, owning 23.5 per cent of the issued units in the Trust[4] and controlling both the Responsible Entity and BGL; and
relates to “a substantial asset” of the Trust, based on the aggregate purchase price that will be payable by the Trust to BGL for the Warehouse Properties being more than 5 per cent of unitholders’ equity in the Trust.

The Resolution may be passed by a majority of eligible unitholders voting under an ordinary resolution (greater than 50 per cent of votes being cast in favour of the Resolution).

4 As at the time of this Explanatory Memorandum being prepared

Bunnings Warehouse Property Trust Notice of Meeting 9

continued Explanatory Memorandum

The related parties and financial benefits of the portfolio acquisition

Wesfarmers Limited, through a wholly owned subsidiary, owns 23.5 per cent of the issued units in the Trust. Both the Responsible Entity and BGL are wholly owned subsidiaries of Wesfarmers Limited. The respective related parties will receive the following financial benefits as a result of the Portfolio Acquisition:

a) By acquiring the Warehouse Properties from BGL, the Responsible Entity, on behalf of the Trust, will become the registered proprietor of the properties.
b) By selling the Warehouses Properties, BGL as vendor will receive $241.7 million from the Trust for the properties.
c) BGL will be paid an amount for the cost of developing the three development properties equal to the valuation upon completion less the cost of the land, which may be more or less than the construction costs, resulting in a potential development profit or loss, respectively, to BGL.
d) By entering into lease agreements for each of the Warehouse Properties, BGL will obtain exclusive possession of each Warehouse Property for the term of each respective lease.
e) By entering into lease agreements for each of the Warehouse Properties, the Trust will receive annual rental payments from BGL for the term of each lease; commencing at annual rents agreed by the parties and adjusted each subsequent year according to the rent review provisions of the respective lease agreements.
f) The Responsible Entity will be entitled to receive annual management fees from the Trust pertaining to the Warehouse Properties, equivalent to 0.585 per cent of the increase in the value of Trust’s gross assets as a result of the Portfolio Acquisition. However, the Responsible Entity has agreed to waive 100 per cent of the management fee relating to the Warehouse Properties from the date of settlement until 30 June 2012 and by 50 per cent for the year ending 30 June 2013.
g) The Portfolio Acquisition will be partly funded by the proceeds of the Entitlement Offer. Wesfarmers Limited through a wholly owned subsidiary is the Trust’s major unitholder and a related party of BGL. Wesfarmers has indicated that it intends to take up its full entitlement under the Entitlement Offer. In taking up its entitlement Wesfarmers will indirectly be funding part of the Portfolio Acquisition. However, Wesfarmers will be excluded from voting on the Resolution.

Directors’ interests

The Directors of the Responsible Entity have no interest in the Portfolio Acquisition except as:

unitholders of the Trust; or
shareholders of Wesfarmers Limited, the ultimate holding company of BGL and the Responsible Entity.

Directors’ recommendation

Based on the Board’s detailed consideration and assessment of the Portfolio Acquisition and taking into account the advantages and disadvantages described in this Explanatory Memorandum and considering the opinion of the Independent Expert, each Director of the Responsible Entity recommends that unitholders vote in favour of the Resolution.

10 Bunnings Warehouse Property Trust Notice of Meeting

Voting restrictions

In relation to the Resolution, in accordance with the Listing Rules and the Corporations Act, the Trust will disregard any votes on the Resolution by Bunnings Property Management Limited, Wesfarmers Investments Pty Ltd, BGL or any of their associates unless the vote is cast by:

a person as proxy for a person who is entitled to vote, in accordance with the directions of the proxy form;
the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides; or
an associate of Bunnings Property Management Limited, provided that associate has no interest in the Resolution other than as a member of the Trust.

Expert’s Report

Under the Listing Rules, an Independent Expert’s Report must be included with this Explanatory Memorandum setting out whether the Portfolio Acquisition is fair and reasonable to unitholders not associated with the transaction. The Independent Expert’s Report is included in section 5 of this Explanatory Memorandum.

Unitholders should read the Independent Expert’s Report in full.

The Independent Expert has relied on valuation reports prepared for each property. The valuation reports can be made available for inspection by appointment at the offices of the Responsible Entity.

Name change

The Trust will change its name following the passing of the resolution approving the Portfolio Acquisition. The decision to change the name of the Trust has been based on a number of factors:

the Trust has established its own position as a premium commercial real estate investment product and should be recognised as a separate brand identity to the Bunnings Warehouse brand;
while Bunnings Warehouses are and will likely remain the core component of the Trust’s investment portfolio, it is increasingly likely that the Trust will invest in other quality commercial properties that have similar characteristics as Bunnings Warehouse properties; and
the continued use of “Bunnings Warehouse” in the Trust’s name creates confusion as to the extent of the legal or operational relationship between the Trust and BGL’s business and leads to an assumption of a more direct connection than exists.

Under the Trust’s Constitution the Responsible Entity has the discretion to change the Trust’s name. Given the factors referred to above, the Responsible Entity considers that it is appropriate to change the name as part of the agreement to acquire the Warehouse Properties from BGL. The name of the Responsible Entity will also change, consistent with the renaming of the Trust.

Bunnings Warehouse Property Trust Notice of Meeting 11

continued Explanatory Memorandum

4.2 Property Details

Bunnings Warehouse – Dubbo, New South Wales Corner Mitchell Highway and Sheraton Road, Dubbo, New South Wales

==> picture [443 x 177] intentionally omitted <==

Status: Brief description: Tenant: Gross lettable area: Land area: Town planning zoning: Interest valued: Valuation: Proposed purchase price: Estimated settlement Lease term: Proposed annual rental: Passing initial yield:	Operating Bunnings Warehouse completed in 2008
	A high clearance warehouse trading as a bulky goods retail outlet, plus showroom and Kentucky Fried Chicken (KFC) pad site with associated car parking
	BGL, Kentucky Fried Chicken Pty Ltd (“KFC”) and a rent guarantee from BGL for the showroom while it remains untenanted
	BGL 8,879m2(fully-enclosed covered area), showroom 1,155m2and KFC ground lease of approximately 2,503m2
	45,250m2
	Special Business
	Freehold, subject to agreed leases
	$15.79 million
	$15.79 million
	June 2011
	BGL - 10 years + 5x5 year options KFC - 5 years + 4x5 year options
	$1,075,000 BGL, $100,000 KFC and $120,000 BGL rent guarantee
	8.20% per annum

The subject property is located adjacent to the new Blue Ridge Estate industrial park in the town of Dubbo, approximately 398 kilometres north-west of Sydney, New South Wales. Dubbo is a major road and rail freight hub to other parts of New South Wales and is linked by national highways north to Brisbane, south to Melbourne, south-east to Sydney and Newcastle, and west to Adelaide.

The lease to BGL is based on the terms and conditions summarised in section 6.

BGL is in the process of subdividing this property from surplus land the Trust is not acquiring and settlement of this acquisition is conditional on the land being subdivided.

12 Bunnings Warehouse Property Trust Notice of Meeting

Bunnings Warehouse - Greenacre, New South Wales 57-67 Roberts Road, Greenacre, New South Wales

==> picture [444 x 176] intentionally omitted <==

----- Start of picture text -----

Artist’s impression of proposed development
----- End of picture text -----

Status: Vacant site for proposed Bunnings Warehouse development expected to be completed in 2011 A proposed high clearance warehouse trading as a bulky goods retail outlet with associated Brief description: car parking Tenant: BGL Gross lettable area: 11,159m[2] (fully-enclosed covered area) estimated Land area: 21,560m[2] Town planning zoning: 4 - Industrial Interest valued: Freehold Valuation: $30.0 million on completion of development $30.0 million on completion of the development, comprising $13.25 million for the land and Proposed purchase price: $16.75 million for the development cost Land: April 2011 Estimated settlement Development: October 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $2,215,000 commencing on completion of the development in 2011 Passing initial yield: 7.38% per annum on completion of the development in 2011

Vacant site for proposed Bunnings Warehouse development expected to be completed in 2011

The subject property is located on the eastern side of Roberts Road south of its intersection with Amarina Avenue, Greenacre approximately 15 kilometres south-west of the Sydney central business district.

To be constructed on the site is a large retail warehouse building comprising a fully-enclosed building area of approximately 11,159 square metres inclusive of a timber drive-through area, nursery of approximately 2,380 square metres and on-site undercroft car parking for 395 cars. The development is expected to be completed by late 2011.

The lease is based on the terms and conditions summarised in section 6.

The Trust and BGL have entered into an Agreement for BGL to develop and lease the subject property. BGL is responsible for completing the development of the Bunnings Warehouse following the acquisition of the land. BGL will pay the Trust holding costs and an access fee of eight per cent per annum of the purchase price for the land from the date of acquisition of the land until the construction is completed. The lease to BGL will commence when construction is completed.

Bunnings Warehouse Property Trust Notice of Meeting 13

continued Explanatory Memorandum

Bunnings Warehouse - Wagga Wagga, New South Wales

51-53 Dobney Avenue, Wagga Wagga, New South Wales

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2009

Brief description: A high clearance warehouse trading as a bulky goods retail outlet with associated car parking Tenant: BGL Gross lettable area: 9,497m[2] (fully-enclosed covered area) Land area: 35,550m[2] Town planning zoning: Light Industrial Interest valued: Freehold, subject to agreed lease Valuation: $15.00 million Proposed purchase price: $15.00 million Estimated settlement April 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,200,000 Passing initial yield: 8.0% per annum

The subject property is located in an established industrial suburb of Wagga Wagga approximately 450 kilometres south-west of Sydney, New South Wales. Wagga Wagga is the state’s largest inland city, as well as an important agricultural, military, and transport hub of Australia. The city is located midway between Sydney and Melbourne and is the major regional centre for the Riverina and South West Slopes regions.

The lease is based on the terms and conditions summarised in section 6.

14 Bunnings Warehouse Property Trust Notice of Meeting

Bunnings Warehouse - Wallsend, New South Wales Corner Sandgate and Minmi Roads, Wallsend, New South Wales

==> picture [444 x 176] intentionally omitted <==

----- Start of picture text -----

Artist’s impression of proposed development
----- End of picture text -----

Status: Vacant site for proposed Bunnings Warehouse development expected to be completed in 2012

A proposed high clearance warehouse trading as a bulky goods retail outlet with associated Brief description: car parking Tenant: BGL Gross lettable area: 10,882m[2] (fully-enclosed covered area) estimated Land area: 55,779m[2] Town planning zoning: 4A Urban Services Interest valued: Freehold Valuation: $21.29 million on completion of development $21.29 million on completion of the development, comprising $2.5 million for the land and Proposed purchase price: $18.79 million for the development cost Land: August 2011 Estimated settlement Development: June 2012 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,650,000 commencing on completion of the development in 2012 Passing initial yield: 7.75% per annum on completion of the development in 2012

The subject property is located in the suburb of Wallsend approximately 9 kilometres north-west of the main business district of Newcastle. Newcastle is the second most populated area in the state of New South Wales being located approximately 155 kilometres north of Sydney.

To be constructed on the site is a large retail warehouse building comprising a fully-enclosed building area of approximately 10,882 square metres inclusive of a timber drive-through area, nursery of approximately 2,834 square metres, enclosed yard area of approximately 1,164 square metres and on-site car parking for 417 cars. The development is expected to be completed by mid 2012.

The lease is based on the terms and conditions summarised in section 6.

BGL, through a wholly owned subsidiary, has an option to acquire the land from council and assuming all conditions in the option agreement are satisfied, including BGL receiving appropriate approval to develop the proposed Bunnings Warehouse, BGL will nominate the Trust to acquire the land. In the event that the Trust acquires the land, BGL will be responsible for completing the development of the Bunnings Warehouse. BGL will pay the Trust holding costs and an access fee of eight per cent per annum of the purchase price for the land and stamp duty from the date of acquisition of the land until the construction is completed. The lease to BGL will commence when construction is completed.

Bunnings Warehouse Property Trust Notice of Meeting 15

continued Explanatory Memorandum

Bunnings Warehouse – Fairfield Waters (Townsville), Queensland Darcy Drive, Fairfield Waters Estate, Idalia, Queensland

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2010

Brief description:

A high clearance warehouse trading as a bulky goods retail outlet with associated car parking

Tenant:

Tenant: BGL Gross lettable area: 10,939m[2] (fully-enclosed covered area) Land area: 28,940m[2] Town planning zoning: Industrial Interest valued: Freehold, subject to agreed lease Valuation: $16.95 million Proposed purchase price: $16.95 million Estimated settlement April 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,390,000 7.75% per annum (assumes annual rental of $1,314,000 per annum after deducting Passing initial yield: estimated land tax)

The subject property is located in the growing residential suburb of Idalia, approximately nine kilometres south of the main business district of Townsville. Townsville, located approximately 1,373 kilometres north of Brisbane, Queensland, is a major service centre. It is the main centre for government administration outside Brisbane, with regional health services provided by the Townsville Hospital and a number of research institutions such as James Cook University, the Australian Institute of Marine Science, the Great Barrier Reef Marine Park Authority, Department of Primary Industries and CSIRO Davies Laboratory. The large defence presence from army and air force bases also influences the local economy

The lease is based on the terms and conditions summarised in section 6.

16 Bunnings Warehouse Property Trust Notice of Meeting

Bunnings Warehouse – Smithfield (Cairns), Queensland 2-4 Mount Milman Drive, Smithfield, Queensland

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2008

Brief description: A high clearance warehouse trading as a bulky goods retail outlet with associated car parking Tenant: BGL Gross lettable area: 10,704m[2] (fully-enclosed covered area) Land area: 31,050m[2] Town planning zoning: Commercial Interest valued: Freehold, subject to agreed lease Valuation: $15.25 million Proposed purchase price: $15.25 million Estimated settlement April 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,300,000 8.0% per annum (assumes annual rental of $1,220,000 per annum after deducting Passing initial yield: estimated land tax)

The subject property is located in the growing residential suburb of Smithfield, approximately 14 kilometres north of the main business district of Cairns. Cairns is located approximately 1,700 kilometres north of Brisbane, Queensland and approximately 350 kilometres north of Townsville. The Cairns region has a population of approximately 165,000.

The lease is based on the terms and conditions summarised in section 6.

BGL is in the process of subdividing this property from surplus land the Trust is not acquiring and settlement of this acquisition is conditional on the land being subdivided.

Bunnings Warehouse Property Trust Notice of Meeting 17

continued Explanatory Memorandum

Bunnings Warehouse - Caroline Springs, Victoria 1067 Western Highway, Ravenhall, Victoria

==> picture [443 x 176] intentionally omitted <==

----- Start of picture text -----

Artist’s impression of proposed development
----- End of picture text -----

Status: Operating Bunnings Warehouse to be completed in 2011 Brief description: A high clearance warehouse trading as a bulky goods retail outlet with associated car parking Tenant: BGL Gross lettable area: 12,020m[2] (fully-enclosed covered area) Land area: 30,229m[2] Town planning zoning: Industrial 3 Interest valued: Freehold, subject to agreed lease Valuation: $19.08 million Proposed purchase price: $19.08 million Estimated settlement May 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,450,000 Passing initial yield: 7.60% per annum

The subject property is located in the growing residential suburb of Ravenhall, approximately 20 kilometres west of the Melbourne central business district. Western Highway is a major east to west arterial road in the western suburbs of Melbourne. In the east direction it links with the Western Ring Road freeway, which connects the western suburbs to Melbourne’s highway and freeway network. In the west direction it connects Melbourne to Ballarat.

The lease is based on the terms and conditions summarised in section 6.

This property is currently under construction and is anticipated to be completed in April 2011. Settlement of the acquisition will occur following construction of the Bunnings Warehouse.

18 Bunnings Warehouse Property Trust Notice of Meeting

Bunnings Warehouse - Craigieburn, Victoria

700-760 Hume Highway, Craigieburn, Victoria

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2011

Brief description: A high clearance warehouse trading as a bulky goods retail outlet with associated car parking Tenant: BGL Gross lettable area: 10,726m[2] (fully-enclosed covered area) Land area: 45,700m[2] Town planning zoning: Industrial 1 Interest valued: Freehold, subject to agreed lease Valuation: $18.42 million Proposed purchase price: $18.42 million Estimated settlement June 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,400,000 Passing initial yield: 7.60% per annum

The subject property, bordered by the Hume Highway to the east, Amaroo Road to the south and the Hume Freeway to the west, is located approximately 25 kilometres north of the Melbourne central business district. The Hume Highway is a major north-south arterial road connecting the northern suburbs of Melbourne and is the major road from Melbourne to Sydney. The site provides excellent visibility and exposure to all three roads.

The lease is based on the terms and conditions summarised in section 6.

BGL is in the process of subdividing this property from surplus land the Trust is not acquiring and settlement of this acquisition is conditional on the land being subdivided.

Bunnings Warehouse Property Trust Notice of Meeting 19

continued Explanatory Memorandum

Bunnings Warehouse - Pakenham, Victoria 825 Princes Highway, Pakenham, Victoria

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2009 with three additional showrooms

A high clearance warehouse trading as a bulky goods retail outlet plus three additional Brief description: showrooms with associated car parking BGL, Officeworks Superstores Pty Ltd (“Officeworks”), Dollar Curtains and Blinds Pty Ltd Tenant: (“Dollar Curtains”) and Goldilocks Trading Pty Ltd (“Goldilocks”) BGL 9,357m[2] (fully-enclosed covered area), Officeworks 2,097m[2] , Dollar Curtains 478m[2] Gross lettable area: and Goldilocks 478m[2] Land area: 35,160m[2] Town planning zoning: Urban Growth Zone – Schedule 1 Interest valued: Freehold, subject to agreed leases Valuation: $20.25 million Proposed purchase price: $20.25 million Estimated settlement April 2011 BGL - 10 years + 5x5 year options Officeworks - 7 years + 4x5 year options Lease term: Dollar Curtains - 5 years + 2x5 year options Goldilocks - 5 years + 2x5 year options Proposed annual net rental: $1,075,000 BGL, $322,400 Officeworks, $110,000 Dollar Curtains, $101,250 Goldilocks Passing initial yield: 7.90% per annum

The subject property is located on the north-eastern corner of Princes Highway and O’Brien Street, Pakenham, approximately 61 kilometres south-east of the Melbourne central business district. It comprises four tenancies with separate leases for each tenant.

The lease to BGL for the Bunnings Warehouse is based on the terms and conditions summarised in section 6.

20 Bunnings Warehouse Property Trust Notice of Meeting

Bunnings Warehouse - Belmont, Western Australia

Corner Abernethy and Alexander Roads, Belmont, Western Australia

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2010

Brief description: A high clearance warehouse trading as a bulky goods retail outlet with associated car parking Tenant: BGL Gross lettable area: 8,215m[2] (fully-enclosed covered area) Land area: 22,131m[2] Town planning zoning: Mixed Use Interest valued: Freehold, subject to agreed lease Valuation: $16.67 million Proposed purchase price: $16.67 million Estimated settlement April 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,250,000 Passing initial yield: 7.5% per annum

The subject property is located on the corner of Abernethy and Alexander Roads in Belmont, approximately six kilometres from the Perth central business district. Abernethy Road is a main arterial road that connects Leach Highway and the Great Eastern Highway, both major north-east to west arterial roads in the region.

The lease is based on the terms and conditions summarised in section 6.

Bunnings Warehouse Property Trust Notice of Meeting 21

continued Explanatory Memorandum

Bunnings Warehouse - Cockburn, Western Australia 71 Armadale Road, Jandakot, Western Australia

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2009

Brief description: A high clearance warehouse trading as a bulky goods retail outlet with associated car parking Tenant: BGL Gross lettable area: 10,212m[2] (fully-enclosed covered area) Land area: 26,005m[2] Town planning zoning: Light Industrial Interest valued: Freehold, subject to agreed lease Valuation: $18.67 million Proposed purchase price: $18.67 million Estimated settlement April 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,400,000 Passing initial yield: 7.5% per annum

The subject property, although on its own certificate of title forms part of the Cockburn Central Town Centre bulky goods centre located approximately 20 kilometres south of the Perth central business district. The sub-regional Gateways Shopping Centre, adjoining the Kwinana Freeway, is located approximately 1.3 kilometres west of the subject property.

The lease is based on the terms and conditions summarised in section 6.

22 Bunnings Warehouse Property Trust Notice of Meeting

Bunnings Warehouse - Harrisdale, Western Australia Lots 801 and 802 Ranford Road, Harrisdale, Western Australia

==> picture [312 x 176] intentionally omitted <==

==> picture [86 x 10] intentionally omitted <==

----- Start of picture text -----

Concept plan only
----- End of picture text -----

Status: Vacant site for proposed Bunnings Warehouse development expected to be completed in 2011

Brief description: Tenant: Gross lettable area: Land area: Town planning zoning: Interest valued: Valuation: Proposed purchase price: Estimated settlement Lease term: Proposed annual rental: Passing initial yield:	A proposed high clearance warehouse trading as a bulky goods retail outlet with associated car parking
	BGL
	10,081m2(fully-enclosed covered area) estimated
	37,126m2
	Lot 801 - Mixed Business Residential, Local Centre Lot 802 - Mixed Business Residential
	Freehold
	$17.9 million on completion of development
	$17.9 million on completion of the development, comprising $10.0 million for the land and $7.9 million for the development cost
	Land: April 2011 Development: October 2011
	10 years + 5x5 year options
	$1,325,000 commencing on completion of the development in 2011
	7.40% per annum on completion of the development in 2011

The subject property is on the south-east corner of Ranford and Wright Roads, in Harrisdale, approximately 18 kilometres southeast of the Perth central business district. The neighbourhood size Southern River Shopping Centre is located opposite the subject property along Ranford Road.

To be constructed on the site is a large retail warehouse building comprising a fully-enclosed building area of approximately 10,081 square metres inclusive of a timber drive-through area, nursery of approximately 2,400 square metres, enclosed yard area of approximately 2,243 square metres and on-site car parking for 360 cars. The development is expected to be completed by late 2011.

The lease is based on the terms and conditions summarised in section 6.

The Trust is acquiring land surplus to BGL’s requirements. There is potential to construct approximately 2,255 square metres of showrooms on the surplus land and these development options will be considered by the Trust in due course.

Bunnings Warehouse Property Trust Notice of Meeting 23

continued Explanatory Memorandum

Bunnings Warehouse – Port Kennedy, Western Australia

7 Sunlight Drive, Port Kennedy, Western Australia

==> picture [443 x 176] intentionally omitted <==

Status:

Operating Bunnings Warehouse completed in 2008 with two additional showrooms

A high clearance warehouse trading as a bulky goods retail outlet plus two additional showrooms with associated car parking

Brief description:

Tenant:

Tenant: BGL Gross lettable area: 9,671m[2] (fully-enclosed covered area) Land area: 27,899m[2] Town planning zoning: Port Kennedy Business Enterprise Interest valued: Freehold, subject to agreed lease Valuation: $16.44 million Proposed purchase price: $16.44 million Estimated settlement May 2011 Lease term: 10 years + 5x5 year options Proposed annual rental: $1,315,000 Passing initial yield: 8.0% per annum

The subject property is located on the eastern side of Sunlight Drive between Crowley Street to the north and Stockton Way to the south, approximately 47 kilometres south-west of the Perth central business district.

The lease comprises the entire site with the showroom tenancies being sub-tenants to BGL. These arrangements apply whilst BGL occupies the property. The BGL lease is based on the terms and conditions summarised in section 6.

BGL is in the process of subdividing this property from surplus land the Trust is not acquiring and settlement of this acquisition is conditional on the land being subdivided.

24 Bunnings Warehouse Property Trust Notice of Meeting

Independent Expert’s Report

==> picture [56 x 76] intentionally omitted <==

T h e Directors B u nnings Pro p erty Mana g ement Limi t ed L e vel 11, Wes f armers Hou s e 4 0 The Espla n ade P E RTH WA 6 000

1 7 February 2 0 11

D e ar Sirs

Proposed Acquisition of Properties from Bunnings Group Limited

Introduction

Y o u have req u ested us to p rovide an i n dependent e xpert’s report pursuant t o Chapter 1 0 of the List i ng R u les of Aust r alian Securi t ies Exchan g e Limited (" A SX") in rel a tion to the p roposed ac q uisition of t e n h a rdware war e house retai l stores and t hree develo p ment prop e rties (collec t ively, “the P roperties”) b y B u nnings Pro p erty Mana g ement Limi t ed (“BPML”) (as respon s ible entity f o r Bunnings Warehouse P r operty Trus t (“BWP Tr u st”)) from a s ubsidiary o f Bunnings G roup Limit e d (“BGL”) a n d the leasi n g o f the Propert i es to BGL ( “ the Proposed Transacti o n”). Both B P ML and BG L are wholly owned s u bsidiaries o f Wesfarmer s Limited (“ W esfarmers ” ).

W e have prep a red this re p ort and pro v ided our op i nion in acc o rdance with the provisions of ASX L i sting Rule 1 0 .10 assessi n g whether, in our opini o n, the terms of the Prop o sed Transa c tion, as set o ut i n the followi n g section, a r e fair and r e asonable to t he unitholders of BWP T rust who a r e not a s sociated wit h Wesfarme r s and its w h olly owned s ubsidiaries.

T h is report is t o accompa n y the Expla n atory Mem o randum an d Notice of M eeting for t h e meeting o f B W P Trust u n itholders to b e held on 30 March 20 1 1.

Description of the Proposed Transaction

It is proposed that BWP T r ust will acq u ire ten esta b lished Bun n ings Warehouse stores a nd three d e velopment p roperties (“ t he develop m ent sites”) f rom a subsi d iary of BG L for a total consideratio n (“ t otal costs”) of approxi m ately $241.7 million, inc l uding an in i tial acquisit i on payment of $198.3 m illion (here a fter, “acquis i tion costs”) .

PricewaterhouseCoopers Securities Ltd, ACN 003 311 617, ABN 54 003 311 617 Holder of Australian Financial Services Licence No 244572 Q V 1, 250 St Geor g e’s Terrace, P E RTH WA 60 0 0 G P O Box D198, P E RTH WA 68 4 0 D X 77 Perth, Aus t ralia w w w.pwc.com/au T e lephone +61 8 9 238 3000

Li a bility limited b y a scheme appr o ved under Profe s sional Standar d s Legislation.

Bunnings Warehouse Property Trust Notice of Meeting 25

Inde endent Ex ert’s Re ort continued p p p

T h e Proposed Transactio n includes th e acquisition of develop m ent sites at G reenacre a n d Wallsend in N e w South W a les and Ha r risdale in W estern Aust r alia and the constructio n of Bunnin g s Warehous e s o n those sites by BGL (on b ehalf of B W P Trust). P u rsuant to th e proposed d evelopmen t agreements w i th BGL, B W P Trust will pay approxi m ately $43. 4 million to B GL in relation to the co n struction o f t h e Bunnings W arehouses (hereafter, “ developme n t costs”) wit h expected d evelopment completion d a tes ranging from Octob e r 2011 to Ju n e 2012. Th e payments b y BWP Tru s t to BGL in r elation to t h e d e velopment o f the sites a r e expected t o be entirel y debt funde d , and are o n ly payable o nce each d e velopment i s complete a nd BGL co m mences occ u pation of t h e premises.

U n til the cons t ruction of t h e develop m ent sites is c ompleted a n d ready for B GL’s occup a tion under t h e lease, BW P Trust will r eceive a mo n thly payme n t (“access f e e”) equival e nt to 8% pe r annum of B W P Trust’s o utlay for th e land and st a mp duty in relation to t h e Wallsend property an d 8% per a n num of the p urchase pr i ce of the la n d for the Gr e enacre and Harrisdale p roperties. B G L is r e sponsible for paying out g oings on al l three devel o pment site s until comp l etion. In th e event that t h e c o nstruction d oes not pro c eed for any r eason othe r than default by BWP T r ust, BWP Trust has the ri g ht to requi r e BGL to pu r chase the d e velopment s ites from B W P Trust fo r the sum of t he acquisiti o n c o sts and transaction cost s paid by B W P Trust.

T h e table below shows the total amou n ts to be pai d to BGL in r e lation to th e Proposed T ransaction.

P F S D G W W C C P B C H P *roperty* airfield Wate mithfield, Qld ubbo, NSW reenacre, NS agga Wagga allsend, NSW aroline Sprin ragieburn, Vi akenham, Vic elmont, WA ockburn, WA arrisdale, WA ort Kennedy, rs, Qld W , NSW gs, Vic c WA	Ac *quisition* *costs* *$000’s* 16,950 15,250 15,790 13,250 15,000 2,500 19,080 18,420 20,250 16,670 18,670 10,000 16,440 *Developm* *costs* *$000* 1 1 *ent* ’s - - - 6,750 - 8,790 - - - - - 7,900 - *Total* *costs* *$000’s* 16,950 15,250 15,790 30,000 15,000 21,290 19,080 18,420 20,250 16,670 18,670 17,900 16,440
	198,270 4 3,440 241,710

I n addition to the acquisit i on and dev e lopment co s ts, transacti o n costs (m a inly stamp d uty) are e s timated to b e approxim a tely $11.6 m illion. Purs u ant to Acco u nting Standards, these c osts may be c a pitalised by BWP Trust u pon initial r ecognition o f the Prope r ties.

2 of 23

26 Bunnings Warehouse Property Trust Notice of Meeting

T h e purchase of the Properties will be f unded by a c ombinatio n of a non-re n ounceable r ights issue t o t h e existing u n itholders o f BWP Trust o f $146.25 m illion (net o f estimated c apital raisi n g costs of $ 3 .75 million) and the dra w down of e x isting bank l oan facilitie s of $107.1 m illion.

T h e Propertie s to be purc h ased by BWP Trust will b e leased to B GL for an i n itial period of ten years w i th five opti o n periods e a ch of five ye a rs at BGL’s option. The total initial a nnual rent a l[1] will be a p proximatel y $18.8 milli o n. The rent a ls for all Pr o perties will increase an n ually at 3% p er annum. A t t h e end of the initial perio d and the ex e rcise of eac h option by B GL, the ren t s will be su b ject to a m arket rent r e view. The m arket rent r e views are s u bject to a 1 0 % cap and c o llar, so tha t the revised r e nt may be n o greater th a n 110%, nor less than 9 0 %, of the re n t in the pre c eding year.

T h e non-BGL tenancies at the Dubbo a nd Pakenh a m premises all have ann u al fixed re n tal increase s of 4 % per annu m and marke t reviews on the exercise of each opti o n. Of the n o n-BGL tena n cies, only t h e m arket rent r e view for the Officework s premises a t Pakenham i n Victoria i s subject to a 10% cap an d c o llar.

T h e Proposed Transactio n also includ e s a full waiv e r of the ma n agement fe e payable by BWP Trust t o B P ML in relation to the P r operties fro m the date o f acquisition of the Prop e rties to 30 J une 2012 a n d a 5 0% reducti o n of the m a nagement f e e payable b y BWP Trust to BPML in relation to t h e Propertie s f o r the year e n ding 30 Ju n e 2013. Sub s equent to 3 0 June 2013 , manageme n t fees paya b le in relatio n t o the Propert i es will be p a yable in full.

F u rther detail s of the Pro p erties prop o sed to be ac q uired inclu d ing their lo c ation and i n itial annual r e ntals are set out in the E x planatory M emorandu m and Notic e of Meeting .

Opinion

I n our opinio n , the propo s ed terms fo r the purcha s e of the Pro p erties for $ 2 41.7 millio n are fair an d r e asonable to t he non-ass o ciated unit h olders of B W P Trust. In forming our opinion, we have c o nsidered th e following m atters whic h summaris e the major i s sues addre s sed in this r e port:

The pu r chase consi d eration off e red is in lin e with the in d ependently assessed m a rket value o f the Pro p erties;
Manag e ment of BP M L has prep a red forecas t s for the ye a rs ending 3 0 June 2011 a nd 30 June 2012 w h ich show that the Prop o sed Transac t ion is anticipated to be a ccretive to d istributions per uni t (“DPU”) b y a total of 0. 4 cents per u nit over this two year pe r iod;

1 Including assu m ed annual rent a ls of $1.65 mil l ion for the Wa l lsend property w hich is expect e d to be compl e ted in June 20 1 2, $1.33 million for t he Harrisdale p roperty expect e d to be compl e ted in October 2 011 and $2.22 million for the Greenacre pr o perty which also has an expe c ted completion date of Octobe r 2011

3 of 23

Bunnings Warehouse Property Trust Notice of Meeting 27

Inde endent Ex ert’s Re ort continued p p p

There w ill be no ch a nge to net a s set backing per unit as a consequen c e of the Pro p osed Transa c tion whilst t he level of g e aring of B W P Trust will increase from 18% to approximately 22.6%. T his level of gearing is w i thin the ge a ring require m ents of bo t h BWP Tru s t’s Constitu t ion and its l oan covena n ts; and
The Pr o posed Tran s action will m aintain the geographic a l diversifica t ion of BWP Trust’s propert y portfolio a n d provide a slight incre a se in expos u re to the W e stern Austr a lian and N e w South W ales marke t s and a sma l l reduction i n exposure t o the Victorian market. I t will also margin a lly increase the estimat e d weighted a verage leas e expiry (“W A LE”) of B W P Trust’s propert y portfolio f r om 8.4 years at 30 June 2011 to 8.7 y ears.

Contents of the Report

T h e balance o f our report i s set out un d er the follo w ing headin g s:

1. Purpose of Report 2. Basis of Evaluation 3. Sources of Information 4. Background to BWP Trust 5. Comparison of the Consideration Offered with the Value of the Properties being Acquired

6. Financial Impact of the Proposed Transaction on BWP Trust 7. Advantages and Disadvantages of the Proposed Transaction

Appendix

A Declarations and Disclosures B Financial Services Guide

Y o urs faithful l y

==> picture [7 x 53] intentionally omitted <==

==> picture [49 x 53] intentionally omitted <==

==> picture [47 x 53] intentionally omitted <==

R o ger Port A u thorised R e presentativ e

4 of 23

28 Bunnings Warehouse Property Trust Notice of Meeting

1. Purpose of Report

C h apter 10 of t he ASX Lis t ing Rules requires an entity to obtai n the approv a l of its shar e holders or u n itholders if it acquires a substantial a sset from a n associate o f a substant i al sharehol d er or u n itholder. B G L is deeme d to be an as s ociate of a substantial u n itholder in BWP Trust a s its ultima t e p a rent entity W esfarmers L imited (“ W esfarmers”) also control s an entity h o lding appr o ximately 23 % o f the issued u nits of BW P Trust. An a s set is deem e d to be sub s tantial if its v alue, or th e value of th e c o nsideration paid, is 5% o r more of t h e equity int e rest of the acquiring ent i ty. The value of the asse t s b e ing acquire d exceeds 5 % of the unit h olders’ equi t y of BWP T r ust as most recently reported at 31 D e cember 20 1 0.

A S X Listing R ule 10.10 st a tes that the N otice of U n itholders’ Meeting requi r ed under A S X Listing R u le 1 0 .1 must incl u de a report on the Prop o sed Transa c tion from a n independe n t expert. T h e report m u st st a te, whethe r , in the expert’s opinion, the Propos e d Transacti o n is fair an d reasonable t o the nona s sociated un i tholders of B WP Trust. T his report p rovides that opinion.

2. Basis of Evaluation

T h ere is no sp e cific guida n ce on formi n g an opinio n on fairnes s and reason a bleness un d er ASX List i ng R u le 10.10. In this regard, we have giv e n due consi d eration to t h e guidance provided b y ASIC R e gulatory G u ide 111 “Co n tent of expe r ts reports”, which requi r es an exper t to focus on the issues facing the sec u rity holders for whom t h e report is b eing prepar e d. In partic u lar, RG 111 requires the e x pert to focu s on the pur p ose and outcome of the t ransaction, rather than t he legal me c hanism to a f fect it.

A c cordingly, i n this report we have ex a mined the P roposed Transaction an d compared t he likely a d vantages a n d disadvant a ges to the non-associat e d unitholde r s of BWP T r ust if the Pr o posed T r ansaction i s agreed to, w ith the adv a ntages and d isadvantag e s to those u n itholders if it is not.

O u r assessme n t of the Pro p osed Transaction has i n cluded a co m parison of t he conside r ation offere d w i th the value of the asset s being acqu i red. The fol l owing certi f ied practisi n g valuers ha v e been e n gaged by B P ML as resp o nsible entit y for BWP T r ust to unde r take indepe n dent mark e t valuations of t h e Properties:

Mr To m Irving of C B Richard Ellis in relatio n to the Que e nsland pro p erties;
Mr Ste p hen Thoma s of CB Rich a rd Ellis in r e lation to th e Victorian p roperties;
Mr Kane Sweetman of CB Richard Ellis in r e lation to on e of the New South Wale s properties;
• Mr Pet e r Macadam of Colliers I n ternational in relation t o three of th e New Sout h Wales propert i es; and

5 o f 23

Bunnings Warehouse Property Trust Notice of Meeting 29

Inde endent Ex ert’s Re ort continued p p p

• Mr Ma r k Christie o f Quantia in r elation to t h e Western A ustralian pr o perties. I n making ou r assessment, we have re l ied on the v a lues placed on these pr o perties by t h ese valuers. O u r assessme n t has also i n cluded an e x amination o f other significant facto r s including:

BWP T r ust’s ability to fund the P roposed Tr a nsaction;
whethe r BWP Trust’s financial p osition, pro f itability an d cash flow a r e likely to b e enhanced i f the Pro p osed Trans a ction is ap p roved;
the pro p osed lease t erms;
other b e nefits and d isadvantages to unithol d ers of the P r oposed Tra n saction; an d
the im p lications for BWP Trust i f the Propo s ed Transact i on is not ap p roved.

3. Sources of Information

I n the course o f our assessment, we ha v e relied on financial an d other information, incl u ding p r ospective fi n ancial and o perating in f ormation, o b tained fro m BPML. Ou r conclusion i s dependen t o n such infor m ation bein g complete a n d accurate in all materi a l respects.

T h e principal s ources of i n formation used in perfo r ming our assessment in c lude:

valuati o n reports o f CB Richard Ellis, Collie r s Internatio n al and Qua n tia in relati o n to the Properties;
draft a g reements b e tween BWP Trust and B G L relating t o the propo s ed acquisiti o ns and leas i ng of the Properties;
• draft d e velopment d eeds betwe e n BGL and B WP Trust i n relation to the Wallsen d , Harrisdal e and Gr e enacre sites;
BWP T r ust’s review e d financial s tatements f or the six m o nths ended 31 Decemb e r 2010;
audited financial st a tements of B WP Trust f o r the year e n ded 30 Ju n e 2010;
existin g loan facilit y agreement s with BWP T rust’s bank e rs;

6 of 23

30 Bunnings Warehouse Property Trust Notice of Meeting

earnin g s forecasts of BWP Trus t prepared b y manageme n t of BPML f or the years ending 30 June 2 0 11 and 2012 reflecting t h e existing o p erations of B WP Trust a nd the imp a ct of the Propos e d Transacti o n;
discuss i ons with th e manageme n t of BPML; and

• publicl y available i n formation r e garding the prices at w h ich BWP Tr u st’s units h a ve traded.

W e have not carried out a n independe n t confirmat i on of the in f ormation p r ovided to u s , nor have w e i n dependentl y verified th e informatio n and other representati o ns made to u s in the course of p r eparing this report. Ho w ever, we ha v e no reason to believe t h at any infor m ation has b een withheld fr o m us or th a t any of the i nformation provided is m isleading t o any material degree.

W e have relie d on the rep o rts prepare d by CB Richard Ellis, Colliers Intern a tional and Q uantia c o vering their assessment and valuati o n of the Pro p erties. In p a rticular, we have relied o n their a s sessment of value whic h forms the b a sis for our a ssessment o f the valuation of the Pr o perties and o u r considera t ion of the f a irness and r e asonableness of the co n sideration o f fered. Each of CBRE, C o lliers Inter n ational and Quantia has acknowled g ed our relia n ce on their r eports. We a re satisfied t h at:

the aut h ors of the v a luation rep o rts have th e appropriat e qualificatio n s and indu s try experie n ce and are independe n t of BWP Tr u st, BGL an d Wesfarme r s;
the methodologies u sed in the v a luation are consistent w ith generall y accepted i n dustry practic e ; and
• the val u ation repor t s contain su f ficient info r mation to s u pport the c o nclusions d r awn.

T h e valuation reports sup p orting the v aluation ass e ssments ab o ve will be m ade availab l e to unit h o lders upon r equest.

4. Background to BWP Trust

History and Operations

B W P Trust w a s constitute d in June 19 9 8 as a prop e rty trust an d was listed o n ASX in S e ptember 19 9 8. A t 4 February 2011, BWP T rust had 4 2 7,042,648 units on issu e and a mark e t capitalisa t ion of a p proximatel y $758 milli o n, based on a unit price o f $1.775 at t hat date.

B W P Trust is f ocused on w arehouse retailing prop e rties and, i n particular, B unnings W a rehouse p r operties tenanted by B G L, a wholly o wned subsi d iary of Wes f armers. At t he date of t h is report, B W P T r ust’s prope r ty portfolio c omprised:

7 o f 23

Bunnings Warehouse Property Trust Notice of Meeting 31

Inde endent Ex ert’s Re ort continued p p p

54 esta b lished Bun n ings Wareh o uses, inclu d ing the Por t Melbourne Bunnings W arehouse acquire d in Decem b er 2010;
one Bu n nings distri b ution centre;
three i n dustrial pro p erties, incl u ding two te n anted by Bl a ckwoods, a n other Wesf a rmers’ subsidi a ry;
one bul k y goods sh o wroom co m plex adjace n t to a Bunni n gs Wareho u se in Geral d ton in Western Austral i a; and
one de v elopment si t e at Mariby r nong in Vic t oria, on wh i ch it is prop o sed to buil d a Bunnings Wareh o use.

T h e majority o f BWP Trus t ’s rental in c ome is recei v ed from th e Bunnings h ome impro v ement retail c h ain. BGL h a s developed Bunnings W arehouse st o res nationa l ly and expa n ded signifi c antly in 20 0 1 a s a result of t h e acquisiti o n of the BB C hardware b usiness. BG L is continu i ng its natio n al rollout o f B u nnings Wa r ehouse stor e s.

B W P Trust has a strategy o f acquiring p roperties w ith long ter m leases, ens u ring that p r operties ar e w e ll located a n d the portf o lio is geogr a phically div e rsified. The location of B WP Trust’s properties i s c h aracterised b y visible a n d accessible locations, r e ady vehicle a ccess and a m ple parkin g and si g nificant catchment are a s.

Financial Position of BWP Trust

T h e financial p osition of BWP Trust reflected in th e audited ba l ance sheet a t 30 June 2 0 10 and the r e viewed bala n ce sheet at 3 1 Decembe r 2010 is su m marised be l ow.

Cu C R To No rrent assets ash eceivables tal current as n-current ass Other receiva Investment pr sets ets bles operties	*Audited* *June* *2010* $m 21.7 3.3 *Reviewed* *December* *2010* $m 17.8 2.3
	25.0 20. 1
	0.9 1,000.1 0.9 1,053.3

8 of 23

32 Bunnings Warehouse Property Trust Notice of Meeting

To To Cu To No To To Ne Co Re Re To Derivative fin tal non-curre tal assets rrent liabiliti Payables and Derivative fin Distributionp tal current lia n-current liab Interest beari Derivative fin tal non-curre tal liabilitie t assets ntributed equ serves tained profits tal unithold ancial instrum nt assets es deferred inco ancial instrum ayable bilities ilities ng liabilities ancial instrum nt liabilities s ity ers’ funds ents me ents ents	0.5 2.7
	1,001.5 1,056.9
	1,026.5 1,077.0
	10.5 0.2 25.2 18.3 0.6 26.4
	35.9 45.3
	193.5 4.2 193.6 0.6
	197.7 194.2
	233.6 239.5
	792.9 837.5
	507.4 (3.9) 289.4 518.8 1.5 317.2
	792.9 837.5

I n dependent v aluations o f property in v estments a r e conducte d at intervals of not more than three y e ars and the m arket valu e s of proper t ies that are n ot indepen d ently value d are assesse d every six m onths by th e directors o f BPML. BW P Trust distributes all of i ts earnings ( excluding e a rnings r e sulting fro m revaluations of investm e nt properti e s) to unith o lders each y e ar and accordingly, un d er c u rrent Austr a lian taxatio n legislation , does not p a y income ta x in its own r ight.

O n 7 Decemb e r 2010, BW P Trust ann o unced the a c quisition o f a Bunnings Warehouse i n Port M elbourne in Victoria for a purchase p rice of $24 m illion (excl u ding trans a ction costs). The proper t y is leased to B G L, with an i n itial term e x piring in M a rch 2020 a n d four opti o ns, exercisa b le by BGL, f or a f urther five y ears each. T he acquisiti o n was fund e d by way of drawdown o n existing c a sh reserves.

9 of 23

Bunnings Warehouse Property Trust Notice of Meeting 33

Inde endent Ex ert’s Re ort continued p p p

5. Comparison of the Consideration Offered with the Value of the Properties being Acquired

U n der the Pr o posed Tran s action, BW P Trust is off e ring $241.7 million for t he Properti e s, including the d e velopment c osts payabl e to BGL in relation to th e developm e nt sites. Th e considerati o n payable i s in li n e with the i n dependent l y assessed v a lues[2] of the Properties a s shown bel o w.

P F S D G W W C C P B C H P *roperty* airfield Wate mithfield, Qld ubbo, NSW reenacre, NS agga Wagga allsend, NSW aroline Sprin ragieburn, Vi akenham, Vic elmont, WA ockburn, WA arrisdale, WA ort Kennedy, rs, Qld W , NSW gs, Vic c WA	*Ass* ma v $0 *essed* *rket* *alue* *00’s* 16,950 15,250 15,790 C 30,000 15,000 C 21,290 C 19,080 18,420 20,250 16,670 18,670 17,900 16,440 241,710 *Valuer* CB Richar CB Richar olliers Intern CB Richar olliers Intern olliers Intern CB Richar CB Richar CB Richar Q Q Q Q d Ellis d Ellis ational d Ellis ational ational d Ellis d Ellis d Ellis uantia uantia uantia uantia

W ith the exce p tion of the G reenacre, W allsend an d Harrisdale d evelopmen t properties, the valuers h a ve assessed the value of the Propert i es by capita l ising the pr o posed annu a l rental inc o me for eac h of t h e Properties at an appro p riate rate d e termined f r om recent i n vestment s a les, taking i n to account:

market evidence of t he rents pa y able on sim i lar properti e s, includin g other Bunn i ngs Wareh o uses; and
the val u ers’ views o f the securit y of income a nd its likely growth pote n tial given t h e nature and locatio n of the Prop e rties and t h e lease rent r eview mec h anisms.

2 T he values of the development p roperties are t hose assessed o n an “as if com p lete basis”

1 0 of 23

34 Bunnings Warehouse Property Trust Notice of Meeting

T h e valuers h a ve consider e d the sensi t ivity of thei r assessed va l ues to chan g es in the ca p italisation r ate a n d, with the e xception of Quantia (w h ich assesse d the value o f the Wester n Australian properties), p e rformed a d iscounted c a sh flow ana l ysis to cross check the a s sessed valu e s.

T h e values of t he Greenac r e, Wallsend and Harris d ale develop m ent proper t ies have be e n assessed o n t w o bases; fir s tly, on an “as is” basis reflecting the v alue of eac h property as a vacant sit e , having r e gard to rece n t sales tran s action acti v ity in relation to similar v acant sites i n similar geographic ar e as; a n d secondly, on an “as if c omplete” b a sis reflectin g the value a ssuming th a t constructi o n of each p r operty had b een comple t ed at the va l uation date and adopti n g the propo s ed tenancy a rrangemen t s f o r each prop e rty. The val u ations refle c t the valuer s ’ views of m arket condi t ions existin g at the date of v a luation and do not purp o rt to predic t future mar k et conditio n s and the v a lue at the a c tual c o mpletion d a te of the co n struction.

T h e proposed total purch a se price incl u ding trans a ction costs f or the Prop e rties exceed s the i n dependentl y assessed v a lue of the P r operties by $ 11.6 millio n , or approxi m ately 4.8% of the total v a lue. This is s olely as a result of the e s timated tra n saction cos t s. The trans a ction costs p rimarily c o mprise sta m p duty and w ould be pa y able irresp e ctive of whe t her the Pro p erties were purchased fr o m a relate d entity.

I n valuing the Cockburn a n d Belmont p roperties i n Western A u stralia, Quantia has not e d that the p r oposed initial rent is below the asse s sed market r ent. In thos e instances, t he valuers h ave adjuste d t h eir assessed capitalisati o n rates, rat h er than adj u sting the pr o posed rent s , as a means of assessin g t h e market va l ue of the Pr o perties. Th e y have don e so due to t h e proposed l ong term le a ses for the P r operties inc l uding the m ultiple five y ear options available to B GL under the leases.

6. Financial Impact of the Proposed Transaction on BWP Trust

It is proposed that BWP T r ust will fun d the acquisition of the Properties by the combin a tion of a ful l y u n derwritten n on-renoun c eable rights issue to the existing uni t holders of B WP Trust o f $146.25 m illion (net o f estimated c apital raisin g costs of $3.75 million) a nd the dra w down of ex i sting bank l o an facilities of $1 0 7.1 million.

W e have adju s ted the revi e wed balanc e sheet of B W P Trust at 3 1 Decembe r 2010 to refl e ct the fi n ancial imp a ct of the rig h ts issue an d the Propos e d Transacti o n and our analysis is se t out below. A l though the d evelopmen t costs for th e Greenacre, Wallsend a n d Harrisda l e properties and the rel a ted fi n ancing of t h ese costs w o uld not be r e flected in t h e balance s h eet until th e se amounts were incurr e d i n the period f rom Octobe r 2011 to Ju n e 2012, we h ave reflecte d these amo u nts in the p r o-forma b a lance sheet to indicate t h e combine d impact of t h e Proposed Transaction on the fina n cial positio n of B W P Trust.

1 1 of 23

Bunnings Warehouse Property Trust Notice of Meeting 35

Inde endent Ex ert’s Re ort continued p p p

As C R I D To Li To Ne Un To Un Ne *sets* ash eceivables an nvestment pr erivative fina tal assets *abilities* Payables and Derivative fin instruments Distributionp Loans and bo tal liabilities *t assets* *itholders e* Issued capital Reserves Undistributed *tal unithold* its on issue t asset back d prepaymen operties ncial instrum deferred inco ancial ayable rrowings *quity* income *ers' equity* ing per uni *Note* ts 2 ents me 1, 2 1 t s	*Review* *Decem* *201* $m 1 ed *ber* 0 E Ra 17.8 3.2 ,053.3 2.7 *Pro-Form* *Adjustme* *quity* *ising* P Tr $m a *nts* *roposed* *ansaction* $m 253.3 *Pro-Form* *December* *2010* $m 17 3 1,306 2 a .8 .2 .6 .7
	1 ,077.0 253.3 1,330 .3
	18.3 1.2 26.4 193.6 (146.2) 253.3 18 1 26 300 .3 .2 .4 .7
	239.5 253.3 346 .6
	837.5 983 .7
	518.8 1.5 317.2 146.2 665 1 317 .0 .5 .2
	837.5 983 .7
	427,04 3,000 88 $1.96 ,235,000 515,278,00 $1. 0 91

P r o-forma Adj u stments

Issue of 8 8, 235,000 u nits at $1.70 p er unit less c apital raising costs (estima t ed at 2.5% of the capital raising o f $150 millio n ) of $3.75 mi l lion, with pr o ceeds used to offset existin g loans and b o rrowings.
The acq u isition cost o f the Properti e s of $241.7 m illion plus tr a nsaction cost s of $11.6 mill i on funded fr o m the proc e eds of the ca p ital raising a n d the drawd o wn of additi o nal loans an d borrowings.

1 2 of 23

36 Bunnings Warehouse Property Trust Notice of Meeting

Impact on Net Asset Backing

I n vestment p r operties are reflected at a ssessed val u es in BWP T rust’s financial stateme n ts and BW P T r ust has an a ccounting p o licy of prog r essively ref r eshing inve s tment prop e rty values on a six mon t hly b a sis through a combinati o n of independent and d i rectors’ val u ations. Acc o rdingly, the carrying val u e o f BWP Trust’s investmen t properties a t 31 Decem b er 2010 ref l ects the im p act of any r e cent changes i n individual p roperty val u es.

T h e reviewed n et asset ba c king per un i t at 31 Dece m ber 2010 w as $1.96 pe r unit. The n e t asset bac k ing is reduced to $ 1.91 per un i t entirely due to the ter m s of the pro p osed capita l raising, as f ollows:

The dil u tive impact of the prop o sed issue of units at a di s counted pri c e of $1.70 p er unit compared to the ne t asset backi n g of $1.96 p er unit; and
The write-off of the capital raisi n g costs of $ 3 .75 million.

T h e Proposed Transactio n will not res u lt in any ch a nge in the n et assets of B WP Trust. S ubsequent t o t h e proposed c apital raisi n g, the pro-f o rma net ass e t backing p e r unit at 31 December 2 0 10 is $1.91 p er u n it and that w ill not cha n ge as a resu l t of the Pro p osed Trans a ction.

Impact on Level of Debt

B a sed on the p roposed eq u ity and deb t funding ar r angements s et out abov e , the Propo s ed Transact i on w i ll have the fo llowing im p act on BW P Trust’s key financial ge a ring ratios a s at 31 Dece m ber 2010:

	*Reviewe* d	*Pro-* *Forma Post* -	*Pro-Fo* *rma*
	*Decembe* r	*Equ* *ity Raising*	*Decem* *ber*
	*2010*	D *ecember*	*201* 0
		*2010*
T otal loans/tot al assets	18.0%	4.4%	22 .6%
T otal liabilities /total tangibl e assets	22.3%	8.7%	26 .1%

B P ML has est a blished a p r eferred ran g e of 20% to 40% for B W P Trust’s ge a ring ratio ( d efined as to t al loans/total as s ets). In add i tion, BWP T rust’s Cons t itution requ i res that the total liabilit i es of BWP T r ust do not e x ceed 60% o f the total t a ngible asset s of BWP Tr u st, and its l o an covenan t s require th a t B W P Trust’s g earing ratio (defined as d ebt plus no n -current li a bilities expr e ssed as a p e rcentage of t o tal assets) d o es not exce e d 45%.

B a sed on the p ro-forma b a lance sheet a t 31 Decem b er 2010:

BWP T r ust’s gearin g ratio will b e approxim a tely 22.6%, w hich is wit h in BWP Tr u st’s accepta b le gearing range and d ebt covenan t s; and

1 3 of 23

Bunnings Warehouse Property Trust Notice of Meeting 37

Inde endent Ex ert’s Re ort continued p p p

• The tot a l liabilities o f BWP Trust (of $346.6 million) wil l be 26% of t o tal tangible assets (of $1,330. 3 million), w hich is well w ithin the r e quirements of BWP Tru s t’s Constitu t ion.

A t 31 Decemb e r 2010, B W P Trust had the followin g loan facilit i es:

Fi AN Co W Na To *nancier* Z BankingG mmonwealth estpac Bankin tional Austra tals roup Bank of Aust g Corporation lia Bank ralia	Li $0 100 100 80 50 330 *mit* *00’s* ,000 ,000 ,000 ,000 ,000 *Amoun* *drawn-do* *$000’* 48,90 49,90 45,50 50,0 194,3 t *wn3* s E 0 0 1 0 2 00 00 *xpiry date* 31 July 2013 4 January 20 November 20 Evergreen4 12 13

T h e Proposed Transactio n will require a further net drawdown on the debt f acilities of a pproximate l y $ 1 07 million, i ncreasing t h e total dra w down (excl u ding accrue d interest) t o approxima t ely $300.7 m illion. The debt finance f or the Prop o sed Transa c tion can be a ccommoda t ed within the existing to t al b a nk facility l i mit of $330 million. Ho w ever, the e x piry date fo r the facility w ith the Co m monwealt h B a nk of Austr a lia precede s the date w h en the deve l opment cos t s are due. M anagement o f BPML ha s a d vised that discussions h a ve comme n ced with th e Commonw e alth Bank o f Australia i n relation to t he r e -negotiatio n of this facil i ty and at th i s stage BPML has no re a son to belie v e that the f a cility will n o t b e extended o n acceptable commercia l terms.

Impact on Earnings

S e t out in the t able below i s a compari s on of the fo r ecast earni n gs and distr i bution per u nit (“DPU” ) of B W P Trust fo r the years e n ding 30 Ju n e 2011 and 3 0 June 201 2 assuming t hat the Pro p osed T r ansaction i s undertaken with the forecast earnin g s and DPU of BWP Tru s t assuming t hat the P r oposed Tra n saction is n o t undertak e n and the f u nds from th e rights issu e are instead used to rep a y d e bt (“base case”).

T h e forecasts h ave been p r epared by t h e management of BPM L and incorp o rate the ti m ing and ter m s o f the rights i s sue and the following a d ditional ass u mptions:

Base ca s e - the fore c ast annual i n creases in r ent receive d from the ex i sting prope r ty portfolio of BWP T r ust, interes t rates applicable to exist i ng borrowi n gs and fore c ast capital e x penditure o n the existing propert y portfolio; a nd

3 T he amount dr a wn down at 31 D ecember 201 0 included accr u ed interest of $0.7 million included in “Payab l es and deferre d in c ome” in the re v iewed balance sheet at that d a te

4 T his facility is e x tended annual l y provided the r e has been no e vent of default or potential ev e nt of default

1 4 of 23

38 Bunnings Warehouse Property Trust Notice of Meeting

Propos e d Transacti o n - the pro p osed rents o f the Proper t ies to be ac q uired, rent s on the existing propert y portfolio, t he timing o f the drawdo w n of debt, t h e acquisiti o n of the Pro p erties from BGL an d the compl e tion and le a sing of the d evelopment properties, i nterest rate s applicable t o borrow i ngs and cap i tal expendi t ure on the e n tire proper t y portfolio.

T h e forecasts d o not take into account any change s in the valu e of investment propertie s and are t h erefore focussed on the d istributabl e profit of B W P Trust.

Re Re In Re To Ex M Bo Ot To Ne Di ye Un Di Di Un Di DP venue nt terest received alised gain on tal revenue penses anagement fe rrowing costs her expenses tal expense t profit stributable pr ar distributedp stributable am stribution p its on issue stribution ($m U (cents per investment e s ofit for the rofit ount er unit ) unit)	*Year e* *Base* $m *nding 30 Ju* *case* P Tr is 81.5 0.6 0.4 *ne 2011* *roposed* *ansaction* *approved* $m 84.6 0.6 0.4 *Year en* *Base cas* $m *ding 30 Ju* e Pr *Tran* ap 85.0 0.3 - *ne 2012* *oposed* *saction is* *proved* $m 102.1 0.3 -
	82.4 85.5 85.3 102.4
	6.2 16.5 5.7 6.2 19.6 3.8 6.5 5.5 3.6 6.5 22.0 4.2
	28.4 29.6 15.5 32.7
	54.0 56.0 69.8 69.7
	54.0 0.1 56.0 0.1 69.8 - 69.7 -
	54.1 56.1 69.8 69.7
	520, 017,689 54.1 520,017,689 56.1 526,908 ,000 5 69.8 27,082,000 69.7
	11.5 11.9 13.3 13.3

T h e DPU in t h e year ende d 30 June 2 0 10 was 12.0 8 cents per u nit.

1 5 of 23

Bunnings Warehouse Property Trust Notice of Meeting 39

Inde endent Ex ert’s Re ort continued p p p

O u r comment s in relation to the forec a sts prepare d by the ma n agement of B PML are a s follows:

The for e cast DPU f o r the year e n ding 30 Ju n e 2011 und e r both the b a se case and assuming t h e Propos e d Transacti o n is undert a ken of 11.5 c ents and 11. 9 cents resp e ctively is le s s than the actual D PU in the y e ar ended 3 0 June 2010 d ue to the d i lutive effect on earnings per unit of t h e rights i s sue in both y ears (unde r both scena r ios) and cos t s written-o f f under the b ase case relatin g to the closi n g out of int e rest rate sw a ps and the p ursuit of th e acquisitio n of the Properties;
The for e cast DPU f o r the year e n ding 30 Ju n e 2012 assu m ing the Pr o posed Tran s action is undert a ken is in lin e with the fo r ecast DPU f or that year assuming t h e Proposed T ransaction i s not un d ertaken. In t hat year, th e increased rental contri b ution from t he Properti e s proposed t o be acq u ired is forec a st to be suf f icient to off s et the diluti o nary impac t of the righ t s issue; and
The cu m ulative acc r etion in DP U if the Proposed Transa c tion is und e rtaken of 0. 4 cents per u nit in the period to 30 J une 2012 is also partly d ue to the impact of the f u ll waiver of the manag e ment fees p a yable by B W P Trust to B PML in tho s e years in r e lation to th e Properties.

P r ojections fo r the period s ubsequent t o 30 June 2012 have be e n undertak e n by the management o f B P ML which indicate that there will b e no dilution in DPU in t h e review pe r iod if the P r oposed T r ansaction i s undertaken. This is mai n ly due to t h e effect on D PU of the i n crease in re n tals for the P r operties of 3 % per annu m .

7. Advantages and Disadvantages of the Proposed Transaction

Advantages

W e consider t h e principal advantages o f the Propo s ed Transac t ion to non- a ssociated u n itholders ar e a s follows:

The pu r chase consi d eration off e red is in lin e with the in d ependently assessed m a rket value o f the Pro p erties;
The Pr o posed Tran s action is forecast to be accretive to D PU over the two year pe r iod ending 3 0 June 2 0 12;
The lev e l of gearing of BWP Tru s t based on t he propose d equity and d ebt fundin g arrangeme n ts and ass u ming the P r oposed Tra n saction is a p proved is a p proximatel y 22.6%. Th i s is within t h e preferr e d range of 2 0% to 40% f or BWP Tru s t’s financia l gearing rat i o, and is we l l within the gearing limits impo s ed by BWP Trust’s Con s titution and loan coven a nts;

1 6 of 23

40 Bunnings Warehouse Property Trust Notice of Meeting

The mi x of debt an d equity funding to fund t he acquisiti o n of the Properties allo w s BWP Tru s t to mai n tain a conse r vatively ge a red balance sheet which provides fle x ibility to B W P Trust in t he event t h at it wishes to undertak e further ac q uisitions in t he future a n d fund imp r ovements to the existing propert y portfolio;
The pr o posed acqui s ition of the Properties i s expected t o provide un i tholders wit h secure, lo n g term ca p ital and in c ome growth, consistent w ith the obj e ctives of B W P Trust;
The ac q uisition of t h e Propertie s will maint a in the geogr a phical dive r sification o f BWP Trust’s invest m ent propert y portfolio a n d provide a slight incre a se in expos u re to the W e stern Austral i an and Ne w South Wales markets w i th a small r e duction in e xposure to t h e Victorian market . However, B WP Trust w i ll maintain i ts exposure to BGL for r e ntal incom e ;
The ac q uisition of t h e Propertie s represents an efficient u se of the fu n ds raised fr o m the righ t s issue in compariso n to the appli c ation of th e funds raise d to the repa y ment of de b t; and
The we i ghted avera g e lease expiry (“WALE” ) of BWP Tr u st’s propert y investmen t portfolio is forecas t to increase marginally fr om 8.4 yea r s at 30 Jun e 2011 to 8.7 years as a r e sult of the Propos e d Transacti o n.

Disadvantages

W e consider t h e principal disadvantag e s of the Pr o posed Tran s action to no n -associate d unit holder s a r e as follows:

The tot a l purchase p rice for the P roperties i s in excess o f the assesse d value of th e Properties b y $11.6 m illion or 4.8 % of the ind e pendently assessed value of the Pro p erties. How e ver, this is solely a s a consequ e nce of trans a ction costs a ssociated w ith the acqu i sition of th e Properties which w ould be payable irrespe c tive of whet h er the Pro p erties were p urchased fr o m a related entity;
The BG L leases for t he Properti e s contain fi x ed increase s in rent of 3 % per annu m over the initial t e n year peri o d, and are only subject t o a market r e view at the end of that ten year peri o d. It is po s sible that m a rket rents o ver the initi a l ten year p e riod may b e greater tha n those contain e d within th e leases for t h e Properti e s. However, the annual i n crease of 3 % does prov i de BWP T r ust with a p r edictable i n come strea m from the P r operties;
The ma r ket review o f the BGL l e ases at the e nd of the initial ten year lease perio d is subject t o a 10% ca p and collar w hich mean s that any upward adjust m ent will no t be greater t han 10% despite the market r ent at that t i me;

1 7 of 23

Bunnings Warehouse Property Trust Notice of Meeting 41

Inde endent Ex ert’s Re ort continued p p p

The ac q uisition of t h e Propertie s increases t h e exposure of BWP Tru s t to the fun d ing of capit a l upgrad e s. However , the leases provide for B W P Trust to earn a com m ercial retur n on those potenti a l outlays;
The ac q uisition of t h e Propertie s increases t h e exposure of BWP Tru s t to the replacement of certain c apital item s . An allowa n ce has been made for these items by the valuers i n their valuati o n opinions;
The val u er of the C o ckburn and Belmont pr o perties in W estern Aust r alian has in d icated in t h e valuati o n reports that the proposed initial a n nual rental f or these pr o perties is b e low market. This ev i dence may h ave implica t ions for the assessment of market rentals on oth e r propertie s in the BW P Trust port f olio when t h ey are due f or renegotia t ion. Howev e r, this risk m ay be mitigat e d by other m arket evidence of rents in relation t o similar properties, incl u ding both Bunnin g s Warehou s es and othe r bulky goods facilities. W e also note that these W estern Austral i an properti e s are the on l y Propertie s where any v aluer has a s sessed the proposed ren t s to be le s s than mar k et; and
The de b t finance fo r the Propos e d Transacti o n can be ac c ommodate d within the e xisting ban k facility l imit of $33 0 million. H o wever, the e xpiry date f o r the facilit y with the Commonwealt h Bank o f Australia p r ecedes the d ate when th e developm e nt costs are d ue. Manag e ment of BP M L has adv i sed that th e y have com m enced disc u ssions with the Commo n wealth Ban k of Australi a in relat i on to the re - negotiation of this facili t y and at thi s stage BPM L has no rea s on to believ e that th e facility will not be exte n ded on acce p table com m ercial terms.

1 8 of 23

42 Bunnings Warehouse Property Trust Notice of Meeting

Appendix A

Declarations and Disclosures

Qualifications and Experience

P r icewaterho u seCoopers S ecurities Lt d is benefici a lly owned b y the partne r s of P r icewaterho u seCoopers, a large inter n ational fir m of chartere d accountan t s and busin e ss advisers. P r icewaterho u seCoopers S ecurities Lt d holds an A u stralian Fi n ancial Servi c es Licence a nd is licens e d t o provide fin a ncial produ c t advice.

M r Roger Por t , the person responsible for the preparation of t h is report, is a partner in P r icewaterho u seCoopers a nd an auth o rised repres e ntative of Pricewaterho u seCoopers S ecurities Ltd. He is a Fellow of the Institute of Chart e red Accoun t ants and a S enior Fello w of the Financial Servic e s I n stitute of A u stralasia an d has extens i ve experien c e in the pre p aration of c orporate va l uations and t h e provision o f corporate advisory se r vices to cor p orations in v olved in tak e overs, capit a l raisings a n d m erger and a c quisitions.

Declaration

A t the date o f this report n one of Pric e waterhouse C oopers Sec u rities Ltd, P ricewaterhouseCoopers or a n y company associated w ith them:

has an y interest in t h e outcome o f the Proposed Transac t ion;
holds a n y beneficial interest in s ecurities of e ither BWP T rust or We s farmers Li m ited, and has not hel d any such b e neficial int e rest during t he previous two years; o r
has an y ongoing rel a tionship wi t h Wesfarm e rs or BWP T rust.

T h e only pecu n iary or oth e r interest t h at Pricewat e rhouseCoo p ers Securiti e s Ltd, P r icewaterho u seCoopers o r any comp a ny associat e d with the m has in relat i on to the Pr o posed T r ansaction a r ises from t h e right to re c eive a fee b a sed on nor m al hourly r a tes for the p r eparation o f t h is report. T h is fee, estimated to be a p proximatel y $70,000, i s payable re g ardless of w h ether or no t t h e Proposed T ransaction is approved. Except for t h is fee, non e of PricewaterhouseCoo p ers Securities L t d, Pricewat e rhouseCoo p ers or any c o mpany ass o ciated with t hem has re c eived, or wi l l receive, an y p e cuniary or o ther benefit , whether di r ect or indir e ct, for or in c onnection w ith the ma k ing of this r e port.

P r icewaterho u seCoopers h as provided professiona l services to W esfarmers on a range o f matters, s o me of whic h remain in p rogress as a t the date of t he report. N one of thos e services relate to the P r oposed Tra n saction. In 2 009, Roger Port acted f o r Wesfarm e rs in a smal l assignmen t . Apart fro m t h at engagem e nt, neither R oger Port nor any mem b er of his te a m on this a s signment h a s provided a ny

1 9 of 23

Bunnings Warehouse Property Trust Notice of Meeting 43

Inde endent Ex ert’s Re ort continued p p p

p r ofessional s e rvices to W e sfarmers in the last two years. We d o not believ e that this re l ationship i m pairs our a b ility to und e rtake an objective asses s ment of the Proposed T r ansaction. P r icewaterho u seCoopers i s not the au d itor of Wes f armers.

P r icewaterho u seCoopers S ecurities Lt d provided a n independent expert’s r e port for B W P Trust in M arch 2010 a n d in 2002 a nd was eng a ged in 200 4 to provide a n independ e nt expert’s r eport on a tr a nsaction w h ich was not finalised an d did not pr o ceed.

T h is report h a s been prep a red in acco r dance with A PES 225 “ V aluation Se r vices” issue d by the A c counting P r ofessional a n d Ethical S t andards Bo a rd which is binding on a ll members of the Instit u te o f Chartered A ccountants i n Australia.

Reliance on this Report

T h e Proposed Transactio n requires th e approval o f unitholders of BWP Tr u st. This rep o rt has been p r epared at t h e request of the indepen d ent directo r s of BPML in order to a s sist them a n d the u n itholders o f BWP Trust in assessing the Propose d Transacti o n. This repo r t was not p r epared for a ny o t her purpose and is desi g ned to acco m pany the E x planatory M emorandu m and Notic e of Meeting t o b e sent to uni t holders of BWP Trust a s required b y Chapter 10 o f the ASX L isting Rules . According l y, t h is report ha s been prepared for the b enefit of the directors of BPML and those unitho l ders whose v o tes are not t o be disrega r ded on the P roposed Tr a nsaction.

T h e conclusio n s of this re p ort are bas e d on assess m ents made, and inform a tion availab l e at the dat e o f this report. Accordingly, we reserve the right (b u t will be un d er no oblig a tion) to am e nd the c o nclusions o f this report i nsofar as fu r ther information releva n t to the for m ing of our c onclusions b e comes kno w n to us afte r the date of t his report, b ut prior to c ompletion o f the Proposed T r ansaction.

T h e statemen t s and opini o ns included in this repo r t are theref o re given in g ood faith a n d in the beli e f t h at they are b ased on inf o rmation wh i ch, on reas o nable grounds, is not fal s e, misleadi n g or i n complete. A c cordingly, w e assume n o responsibi l ity or liabili t y for any lo s s suffered b y any party a s a r e sult of our r e liance on i n formation t h at is other w ise.

Indemnity

B W P Trust and BPML ha v e agreed to i ndemnify P r icewaterho u seCoopers S ecurities Lt d , P r icewaterho u seCoopers a nd its empl o yees agains t claims, liabilities, losse s and expenses they incu r if i n formation o r document a tion provid e d by or on b e half of the T rust is false, misleading or omits m aterial parti c ulars, or if r elevant info r mation or d ocuments h a ve not bee n supplied.

2 0 of 23

44 Bunnings Warehouse Property Trust Notice of Meeting

Consents

N e ither Price w aterhouse C oopers Secu r ities Ltd no r Pricewater h ouseCoope r s have authorised or c a used the iss u e of all or a n y part of th e Explanato r y Memoran d um or Noti c e of Meeting. Neither t h e w h ole nor an y part of this r eport nor a n y reference thereto ma y be include d in or with or attached t o a n y documen t , circular, resolution, let t er or state m ent (other t h an the noti c e of meetin g mentioned a b ove) witho u t the prior w ritten conse n t of Pricew a terhouseCoopers Secur i ties Ltd to t h e form and c o ntext in wh i ch it appear s .

P r icewaterho u seCoopers S ecurities Lt d has conse n ted to the inclusion of t h is report, in the form an d c o ntext in wh i ch it is included, in the E xplanatory M emorandu m and Notic e of Meetin g .

2 1 of 23

Bunnings Warehouse Property Trust Notice of Meeting 45

Inde endent Ex ert’s Re ort continued p p p

Appendix B

FINANCIAL SERVICES GUIDE

This Financial Services Guide is dated 17 February 2011

1. About us

P r icewaterho u seCoopers S ecurities Lt d (ABN 54 0 0 3 311 617, A ustralian Fi n ancial Serv i ces Licence no 2 4 4572) (“Pw C S”) has bee n engaged b y Bunnings P roperty Ma n agement Limited (as re s ponsible entity f o r the Bunni n gs Wareho u se Property Trust) to pr o vide a repo r t in the for m of an Inde p endent E x pert’s Repo r t in relatio n to the prop o sed acquisi t ion of prop e rties from B unnings Gr o up Limited (“ t he Propose d Transactio n ”) (“the Re p ort”) for in c lusion in an Explanator y Memoran d um and Not i ce o f Meeting relating to the P roposed Tr a nsaction.

Y o u have not e ngaged us d irectly but h ave been pr o vided with a copy of the Report as a retail client b e cause of yo u r connectio n to the mat t ers set out i n the Report.

2. This Financial Services Guide

T h is Financia l Services G u ide (“FSG”) is designed t o assist reta i l clients in their use of any general fi n ancial prod u ct advice c o ntained in t h e Report. T his FSG con t ains infor m ation about P wCS g e nerally, the financial se r vices we are licensed to p rovide, the r emunerati o n we may receive in c o nnection wi t h the prepa r ation of the Report and how compl a ints against u s will be dealt with.

3. Financial services we are licensed to provide

O u r Australia n Financial S ervices Lice n ce allows u s to provide a broad ran g e of service s , including p r oviding fin a ncial produ c t advice in r e lation to va r ious financ i al products s uch as secu r ities, intere s ts i n managed i n vestment sc h emes, deri v atives, supe r annuation p roducts, fo r eign exchan g e contracts , i n surance pro d ucts, life p r oducts, ma n aged invest m ent schem e s, governm e nt debentur e s, stocks or b o nds and de p osit produc t s.

4. General financial product advice

T h e Report contains only g eneral fina n cial produc t advice. It w as prepared without taking into acco u nt y o ur personal objectives, fi nancial situation or nee d s.

Y o u should consider your o wn objecti v es, financial situation a n d needs wh e n assessing t he suitabili t y o f the Report t o your situ a tion. You m a y wish to o b tain person a l financial p roduct advi c e from the h o lder of an A ustralian Fi n ancial Serv i ces Licence t o assist you in this asse s sment.

2 2 of 23

46 Bunnings Warehouse Property Trust Notice of Meeting

Appendix B (cont)

5. Fees, commissions and other benefits we may receive

P w CS charges fees to pro d uce reports, including t h is Report. T h ese fees ar e negotiated a nd agreed w ith t h e entity wh o engages us t o provide a report. Fees are charged on an hourl y basis or as a fixed amo u nt d e pending on the terms o f the agreem e nt with the p erson who e ngages us. I n the prepa r ation of thi s R e port, our fe e s are as dis c losed in Ap p endix A of t his Report.

D i rectors or e m ployees of PwCS, Price w aterhouse C oopers, or o ther associa t ed entities, may receive p a rtnership d i stributions, salary or wa g es from Pricewaterhou s eCoopers.

6. Associations with issuers of financial products

P w CS and its a uthorised r e presentativ e s, employe e s and associates may fr o m time to ti m e have r e lationships w ith the issuers of finan c ial products . For examp l e, PricewaterhouseCoop e rs may be t h e a u ditor of or p rovide fina n cial services to the issue r of a financ i al product a n d PwCS m a y provide fi n ancial services to the is s uer of a fin a ncial produ c t in the ordinary course of its busine s s.

7. Complaints

If you have a c omplaint, p l ease raise it with us first, using the c o ntact details listed belo w . We will e n deavour to s atisfactoril y resolve you r complaint i n a timely m anner. In a d dition, a co p y of our i n ternal comp l aints handl i ng procedu r e is availabl e upon requ e st.

If we are not a ble to resol v e your com p laint to you r satisfactio n within 45 d a ys of your w ritten n o tification, y o u are entitl e d to have y o ur matter r e ferred to th e Financial O mbudsman Service, an e x ternal com p laints resol u tion service . The Financ i al Ombuds m an Service c an be cont a cted by calli n g 1 3 00 780 808. You will n o t be charge d for using t h is service.

8. Contact Details

P w CS can be c ontacted by sending a le t ter to the f o llowing add r ess:

Mr Roger Port Pricew a terhouseCo o pers Securi t ies Ltd QV1 Bu i lding 250 St G eorges Ter r ace PERTH WA 6000

2 3 of 23

Bunnings Warehouse Property Trust Notice of Meeting 47

==> picture [56 x 78] intentionally omitted <==

Schedule 1 – Terms of Leases

The relevant terms of the leases proposed to be acquired are substantially the same as the terms of the leases for all other properties currently owned by the Trust and leased to BGL, other than the following terms:

	Proposed Transaction	Existing
Lease Term	Initial term of 10 years followed by fve	The Bunnings Warehouse leases held by
	options of fve years each exercisable by	the Trust generally commit the tenant to
	the tenant.	an initial term of 10 or 15 years, followed
		by a number of optional terms of fve years
		each exercisable by the tenant.
Annual rent	Fixed three per cent with market rent	Consumer price index with market rent
reviews	reviews at the exercise of each option.	reviews every fve years. The majority of
	Market rent reviews are subject to a 10 per cent cap and collar, ensuring that the revised rent may be no greater than 110 per cent nor less than 90 per cent of the rent in the preceding year.	leases have uncapped market rent reviews. The leases for Bunnings Warehouses at Bayswater, Cairns, Hawthorn, Lismore, Morley, Mt Gravatt, Port Melbourne, Thornleigh, Vermont South and Villawood have caps and collars of between
		10 and 20 per cent.
Land tax	Recovery of land tax is based on single	The recovery of land tax for seven of the
	holding ownership, meaning that the Trust	Bunnings Warehouse properties located
	pays a portion of the land tax that relates	at Belmont, Thornleigh, Villawood,
	to owning more than one property in the	Bayswater, Vermont South, Port
	relevant state/territory.	Melbourne and Morley is based on single
	Land tax is not recoverable for properties	holding ownership.
	in Queensland.	All other Bunnings Warehouse leases
		(other than for Queensland properties)
		allow for the recovery of land tax based on
		multiple holding ownership, meaning that
		for those properties the Trust can recover
		the entire land tax liability from the tenant.
		Land tax is not recoverable for Bunnings
		Warehouse properties in Queensland.
Capital upgrade	The landlord, if requested by the tenant, is	There is no requirement for the landlord
requirement	required to fund capital upgrades costing	to fund capital upgrades requested by
	between $2 million and $6 million based	the tenant (other than in respect of the
	on a specifed funding formula, subject to	Bunnings Warehouse leases for Mt Gravatt
	meeting certain criteria.	and Villawood).
Repurchase of	There is no right to repurchase the	The leases for Bayswater, Morley,
property	property.	Thornleigh and Vermont South allow the
		tenant to repurchase the property from the
		landlord under certain circumstances.
Replacement of	The following items are required to be	There is a similar provision to replace
capital items	replaced at the cost of the landlord	skylights, high bay light fttings, mechanical
	every 12 years from the commencement	ventilation and roller shutters in the Mt
	date: skylights; high bay light fttings;	Gravatt and Villawood leases only.
	mechanical ventilation and roller shutters.
	Based on current replacement costs this
	requirement would cost approximately
	$0.9m - $1.1m.

48 Bunnings Warehouse Property Trust Notice of Meeting

Schedule 2 - Glossary

==> picture [51 x 75] intentionally omitted <==

“ASIC”	Australian Securities and Investments Commission
“Associate”	has the meaning given in the Corporations Act
“ASX”	ASX Limited ACN 008 624 691
“BGL” or “Bunnings Group Limited”	Bunnings Group Limited ACN 008 672 179 and its wholly owned subsidiaries
“Bunnings Warehouse”	that part of any Warehouse Property that comprises land and improvements (either existing or to be completed) to be leased to BGL
“CPI”	a general reference to one of the Consumer Price Indices, as published by the Australian Bureau of Statistics.
“Directors”	the Directors of Bunnings Property Management Limited ABN 26 082 856 424
	The 1 for 4.84 accelerated non-renounceable entitlement offer to eligible
“Entitlement Offer”	unitholders of the Trust for additional fully paid units in the Trust announced
	on 17 February 2011
“Explanatory Memorandum”	this Explanatory Memorandum which accompanies the Notice of Meeting of Unitholders
“Independent Expert”	PricewaterhouseCoopers Securities Ltd ACN 003 311 617
“Listing Rules”	the Offcial Listing Rules of the ASX
	A scheduled, periodic review of the passing rent of a property compared with
“market rent review”	the current market rent on that date, generally having regard to the rents paid
	at comparable properties
“Notice of Meeting”	this notice convening a meeting of unitholders
“Portfolio Acquisition”	the sale and leaseback of the Warehouse Properties by BGL to the Trust as proposed in these Explanatory Notes
“registry”	Computershare Investor Services Pty Limited ACN 078 279 277
“Resolution”	the resolution proposed by this Notice of Meeting
“Responsible Entity”	the responsible entity of the Trust, being Bunnings Property Management Limited ACN 082 856 424
“section”	a section of this Explanatory Memorandum
“Trust”	Bunnings Warehouse Property Trust ARSN 088 581 097
“unit”	a fully paid ordinary unit in the Trust
“WALE”	Weighted Average Lease Expiry (by annual rent)
	the land and improvements (either existing or to be completed) specifed in
“Warehouse Properties”	these Explanatory Notes; including the Bunnings Warehouses and, where
	applicable, any additional land or other improvements not leased to BGL
“Wesfarmers Limited” or “Wesfarmers”	Wesfarmers Limited ACN 008 984 049 and its wholly owned subsidiaries

The information provided in this Explanatory Memorandum and Notice of Meeting should be considered together with ASX announcements and other information available on the Trust’s website.

Bunnings Warehouse Property Trust Notice of Meeting 49

www.bwptrust.com.au

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

AI assistant

BWP GROUP — Proxy Solicitation & Information Statement 2011

64592_rns_2011-02-16_e9eb1bf6-68ad-4ad7-8cd1-16bf81503b91.pdf

NOTICE OF UNITHOLDERS’ MEETING AND EXPLANATORY MEMORANDUM

Directory

Responsible Entity

Directors and Management

Registry Manager

Computershare Investor Services Pty Limited

Solicitor

Freehills

Contents

Chairman’s Letter

17 February 2011

Dear unitholder

Notice of Meeting of Unitholders

BUSINESS OF THE MEETING

Ordinary business

Resolution: Acquisition of properties

Notice of Meeting

IMPORTANT INFORMATION

CHAIRMAN

VOTING

HOW DO YOU EXERCISE YOUR RIGHT TO VOTE?

Voting by Proxy

Jointly held units

Corporations voting

VOTING EXCLUSIONS

Explanatory Memorandum

4.1 RESOLUTION - Acquisition of Bunnings Warehouse Properties

Description of the proposed transaction

Dubbo and Pakenham include non-BGL tenancies in addition to a Bunnings Warehouse

Rent reviews

Development properties

Funding the Portfolio Acquisition

Financial impact

Advantages of the Portfolio Acquisition

continued Explanatory Memorandum

Disadvantages of the Portfolio Acquisition

Potential risks associated with the Portfolio Acquisition

Requirement for unitholder approval

The related parties and financial benefits of the portfolio acquisition

Directors’ interests

Directors’ recommendation

Voting restrictions

Expert’s Report

Name change

4.2 Property Details

Bunnings Warehouse - Wagga Wagga, New South Wales

Bunnings Warehouse - Craigieburn, Victoria

700-760 Hume Highway, Craigieburn, Victoria

Bunnings Warehouse - Belmont, Western Australia

Corner Abernethy and Alexander Roads, Belmont, Western Australia

continued Explanatory Memorandum

Bunnings Warehouse - Cockburn, Western Australia 71 Armadale Road, Jandakot, Western Australia

Bunnings Warehouse - Harrisdale, Western Australia Lots 801 and 802 Ranford Road, Harrisdale, Western Australia

Bunnings Warehouse – Port Kennedy, Western Australia

Independent Expert’s Report

Proposed Acquisition of Properties from Bunnings Group Limited

Introduction

Description of the Proposed Transaction

Opinion

Contents of the Report

Appendix

A Declarations and Disclosures B Financial Services Guide

Y o urs faithful l y

1. Purpose of Report

2. Basis of Evaluation

3. Sources of Information

4. Background to BWP Trust

History and Operations

Financial Position of BWP Trust

5. Comparison of the Consideration Offered with the Value of the Properties being Acquired

6. Financial Impact of the Proposed Transaction on BWP Trust

Impact on Net Asset Backing

Impact on Level of Debt

Impact on Earnings

7. Advantages and Disadvantages of the Proposed Transaction

Advantages

Disadvantages

BWP GROUP Proxy Solicitation & Information Statement 2011