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Market rent reviews results summary
Property location
Customer Passing rent ($ pa) Market review
1
($ pa)
Uplift (%) Effective date
Mornington, VIC
2
Bunnings
1,607,814
1,650,000
2.6
13-Dec-14
Fountain Gate, VIC
2
Bunnings
1,469,209
1,650,000
12.3
1-Feb-15
Nunawading, VIC
2
Bunnings
2,289,748
2,337,500
2.1
11-Feb-15
Morayfield, QLD
2
Bunnings
1,676,042
1,770,000
5.6
22-Mar-15
Mile End, SA
2
Bunnings
2,050,595
2,340,000
14.1
23-Mar-15
Morley, WA
Bunnings
1,290,348
1,425,000
10.4
3-Jul-15
Vermont South, VIC
Bunnings
2,166,812
2,166,812
0.0
15-Aug-15
Northland, VIC
Bunnings
1,876,874
1,900,000
1.2
19-Aug-15
Geraldton Showrooms, WA
BCF
182,436
182,436
0.0
12-Nov-15
Dubbo, NSW
KFC
116,986
121,665
4.0
29-Nov-15
Mt Gravatt, QLD
Bunnings
1,163,007
1,250,000
7.5
17-Dec-15
Broadmeadows, VIC
Bunnings
1,795,655
1,910,000
6.4
4-Jan-16
Pakenham, VIC
Dollar Curtains & Blinds
123,022
126,713
3.0
10-Jan-16
Bayswater, VIC
BCF
269,423
290,000
7.6
3-Jun-16
Weighted Average
5.8
1
All market rent reviews were negotiated between the Trust and the Customer except Fountain Gate, Mile End, Morayfield and Mt Gravatt which were determined by
an independent valuer
2
The market rent reviewwas due during the year ended 30 June 2015, but the outcome of the negotiation was only completed during the year ended 30 June 2016
LIKE-FOR-LIKE RENTAL GROWTH
Excluding rental income from properties acquired or upgraded
during or since the previous corresponding period, rental income
increased by approximately 2.3 per cent for the 12 months to
30 June 2016 (compared to 2.9 per cent for the 12 months to
30 June 2015, which was previously disclosed as a 2.6 per cent
increase, but has now been updated following the finalisation of
the five market rent reviews related to that period).
The unresolved market review for Belmont North as at 30 June 2016
is not included in the calculation of like-for-like rental growth for
the year.
Occupancy
As at 30 June 2016, the portfolio was 99.7 per cent leased.
It is the nature of the Bunnings business model that its property
requirements for some locations change over time as is the case
for six properties in the property investment portfolio. These
properties are identified in the portfolio rental summary
on pages 20 and 21. In all cases, Bunnings has or is in the
process of re-locating to a new nearby site in the same
demographic area. In all cases, the properties remain leased to
Bunnings for a minimum period to February 2018, and in the
case of one property until September 2021. For any Bunnings
Warehouse or standalone industrial site vacancies, the Trust
gives full consideration to re-leasing the property, reinvesting in
it to enhance rental outcomes, or divesting it, to provide the best
overall outcome for the Trust.
Property revaluations
The entire Trust portfolio was revalued at 31 December 2015
and again at 30 June 2016, including 26 property revaluations
performed by independent valuers (10 at 31 December 2015
and 16 at 30 June 2016). Properties not independently
revalued at each balance date are subject to internal valuations,
with an independent valuer reviewing the methodology
adopted. Factors that may affect the valuation of properties
from time to time include: the supply of and competition for
investment properties; leasing market conditions; the quality
and condition of the particular property, including the duration
of the lease; and the level of rent paid at the property compared
with the broader market.
The value of the Trust’s portfolio increased by $202.9 million to
$2,184.2 million during the year following: acquisitions of $0.2
million, development and capital expenditure of $7.6 million,
less net proceeds from divestments of $7.5 million, and a net
revaluation gain of $202.6 million.
The net revaluation gain was due to growth in rental income and
an average decrease in capitalisation rates across the portfolio
during the year. The Trust’s weighted average capitalisation rate for
the portfolio at 30 June 2016 was 6.77 per cent (December 2015:
6.81 per cent; June 2015: 7.33 per cent).
Number of properties
Western Australia
17
Victoria
24
Australian Capital Territory
2
South Australia
2
New South Wales
16
Queensland
20
Total
81
BWP Trust Annual Report 2016
17
Business Review