BWP TRUST ANNUAL REPORT 2015
4
LETTER
FROM THE
CHAIRMAN
DEAR UNITHOLDER
On behalf of the Board of directors of BWP Management Limited,
the responsible entity for BWP Trust, it is my pleasure to present the
Trust’s annual report for the financial year ended 30 June 2015.
The performance of the Trust during the year was pleasing, both
operationally and in terms of market returns.
The Trust had good rental growth from its existing property
portfolio, and from the addition of four Bunnings Warehouse
properties completed during the year, one new Bunnings
Warehouse acquisition, one Bunnings Warehouse store upgrade,
and one completed showroom development.
Repricing of the Trust’s banking facilities, and the reduction of
unused facilities by $45 million, contributed to the decrease in the
cost of debt to 5.0 per cent at financial year end.
The increased total income and lower cost of debt, have resulted
in total distributions per unit for 2014/15 increasing by 7.7 per cent
from last year to 15.84 cents per unit.
Total returns for the year (distributions and movement in
unit price) of 30.0 per cent were well ahead of the benchmark
S&P/ASX 200 Property Accumulation Index of 20.3 per cent.
BWP’s performance over time is illustrated in the chart on page
3, which shows total returns of BWP and relevant market
indices over a longer timeframe; not only for the past year, but
over three, five, and ten years.
The Trust completed the sale of six non-core properties during the
year, and entered into an option agreement for the divestment of
the Altona property, which is exercisable by the purchaser up until
31 July 2016.
Looking forward, the Trust expects further rental growth from its
existing property investment portfolio, and from the full year rental
contribution of properties acquired or for which development was
completed during the 2014/15 financial year.
The Trust will remain active in seeking out acquisition opportunities,
however, property investment activity is expected to continue to be
competitive in the current year, which may limit opportunities for
asset purchases, in the near term.
The Trust assesses the future potential of all properties in
the portfolio on an ongoing basis, and will continue to look to
divest non-core properties when considered to provide the best
financial outcome.
Finally, I would like to acknowledge some changes to the Board
of the responsible entity during the year. In February 2015, we
were delighted to welcome Mr Erich Fraunschiel to the Board as
a non-executive director, who has extensive business and board
experience and Mr Mike Steur who is an experienced valuer by
background and has over 30 years property experience. Mr John
Atkins has resigned from the Board effective from 31 August 2015,
to take up the role of Agent General for Western Australia, based in
London. I would like to sincerely thank John for his contribution to
the Board, and wish him well for the future.
I would also like to express my appreciation to all my fellow
directors and management for their efforts during the year and
thank our unitholders for their continued support of the Trust.
J A Austin
Chairman
BWP Management Limited
The Trust is well positioned with a large geographically diverse portfolio of 80 Bunnings
Warehouse properties with attractive risk/ return characteristics, and a balance sheet that can
accommodate further debt funded asset growth as opportunities arise. The outlook for both
the home improvement & outdoor living sector and Bunnings continue to be positive.
OVERVIEW
