BWP TRUST ANNUAL REPORT 2015 - page 3

BWP TRUST ANNUAL REPORT 2015 1
As at 30 June 2015, the Trust
owned 80 Bunnings Warehouses,
eight of which have adjacent retail
showrooms that the Trust owns
and are leased to other retailers,
a fully leased stand alone
showroom property and a leased
industrial property.
ABOUT US 1
BWP Trust is a real estate investment trust listed on
the Australian Securities Exchange (“ASX”) investing
in and managing commercial properties throughout
Australia. The majority of the Trust’s properties
are large format retailing properties, in particular,
Bunnings Warehouses, leased to Bunnings Group
Limited (“Bunnings”).
The Trust’s main source of income is the rent paid by Bunnings
and other customers for leasing their respective premises from
the Trust. Rent is generally based on the area of the property
leased by the customer, and typically does not have reference to
the customer’s turnover at the premises. Growth in rental income
typically comes from acquiring additional leased properties and
from increases in rent from existing properties. Rents from existing
properties grow as a result of annual rent increases and periodic
market reviews in accordance with the lease. Rental growth may
also occur with upgrades to existing properties, which increase the
lettable area.
The main items of expense for the Trust are borrowing costs and
the fee paid to the responsible entity for managing the Trust. The
amount of borrowing costs relate to the level of borrowings the
Trust has from time to time, and the interest rates and funding
costs associated with those borrowings. The level of management
fee paid by the Trust depends on the value of the gross assets of
the Trust over the period.
The Trust’s assets are predominantly comprised of its investment
properties. Investment properties are revalued every six months
to assess their fair value based on market conditions and the
circumstances of each particular property. Changes in the fair
value of properties as a result of revaluations are recorded as an
unrealised revaluation gain or loss for the period and do not affect
distributable profit. Borrowings to fund investment in properties are
the Trust’s largest liability and typically represent 20 to 30
per cent of the value of the Trust’s total assets.
As required by the Trust’s constitution, the Trust distributes all its
“profit attributable to unitholders of BWP Trust” as per the statutory
accounts every six months, excluding unrealised movements in
the fair value of investment properties, as well as other items as
determined by the directors. In addition, at the directors’ discretion,
capital profits arising from the sale of investment properties can
be distributed in the year they are generated, or retained to be
distributed in future years. In each year, the Trust distributes more
than its taxable income.
The Trust is managed by an external responsible entity,
BWP Management Limited (“the responsible entity”) which is
appointed under the Trust’s constitution and operates under an
Australian Financial Services Licence. The responsible entity is
solely committed to managing the Trust and is paid an annual
fee based on the gross assets of the Trust. Both Bunnings and
the responsible entity are wholly-owned subsidiaries of
Wesfarmers Limited (“Wesfarmers”), one of Australia’s largest
listed companies. Wesfarmers, through one of its subsidiaries, also
owns approximately 24.75 per cent of the issued units in the Trust.
1 This is a brief summary of BWP Trust’s (“BWP” or “the Trust”) operations
and activities, and readers should refer to the details provided throughout this
Annual Report and on the Trust’s website for further information.
OVERVIEW