BWP Trust · ASX:BWP
BWP Trust — Bunnings Warehouse Property Trust — Merger or Acquisition (April 2010)
19 slides from BWP Trust's merger presentation, April 2010
Slide 1: Bunnings Warehouse Property Trust: Extended Lease Tenure
BUNNINGS WAREHOUSE PROPERTY TRUST Extended Lease Tenure April 2010
Slide 2: Presentation Outline
Presentation Outline • Overview Grant Gernhoefer • Outline of Extended Lease General Manager Tenure (“ELT”) Bunnings Property Management Limited • Examples of ELT by property • Advantages of ELT to the Trust Andrew Ross Portfolio Manager • Disadvantages Bunnings Property Management Limited • Portfol
Slide 3: Overview
Overview • Proposed transaction to extend • No short-term increase in Trust leases over 35 Bunnings earnings, but secures an average Warehouses leased to Trust’s of 6 years’ additional committed main tenant Bunnings Group income beyond current term for Limited (“BGL”) 34 properties • Extends the cur
Slide 4: Outline of ELT
Outline of ELT • Extends committed term (term for which BGL is committed to lease the properties) and BGL tenure (term for which BGL is entitled to lease the properties, including optional terms) • Individual leases extended by either 5 years or 10 years (Details by property included at Appendix A)
Slide 5: Outline of ELT
Outline of ELT • 18 Bunnings Warehouses excluded – 16 properties: either or both parties considered existing tenure was sufficient; or – 2 properties: subject to other dealings or negotiations between the parties (e.g. upgrades) • Exclusion of properties reflects robustness of negotiations not neces
Slide 6: Examples of ELT by property
Examples of ELT by property * 10 for 10 (7 properties) Nunawading (Vic) Existing 5.1 years 5 years 5 years Proforma Extended 15.1 years 10 years Lease Tenure 5 for 5 (26 properties) Mindarie (WA) Existing 6.7 years 5 years 5 years Proforma Extended 11.7 years 5 years 5 years Lease Tenure Committed t
Slide 7: Examples of ELT by property
Examples of ELT by property * 5 for 10 (1 property) Cannon Hill (Qld) Existing 9.3 years 5 years Proforma Extended 14.3 years 10 years Lease Tenure 0 for 5 (1 property) Noarlunga (SA) Existing 9.8 years 5 years Proforma Extended 9.8 years 5 years 5 years Lease Tenure Committed term (by BGL) Optional
Slide 8: Advantages of ELT for the Trust
Advantages of ELT for the Trust • Secures future rental income (approximately $280m* over the average 6 years’ increased committed term) • “Locks in” high quality tenant • Secures existing lease terms and conditions beyond current expiry • Reduces re-leasing or vacancy risk from: – Reduced income as
Slide 9: Disadvantages of ELT for the Trust
Disadvantages of ELT for the Trust • Commits properties for a further 5 or 10 years: – defers opportunity to renegotiate better terms with BGL or find higher and better use, BUT: – already 14 to 26 years before properties would revert to the Trust – prospect of higher and better use considered specu
Slide 10: Property Portfolio Impact
Property Portfolio Impact • Increase in portfolio WALE by 3.7 years Committed term Tenant tenure Annualised rent (years) (years) Type of property Quantity ($) Existing Extended Existing Extended Subject properties 35 47,353,270 5.5 11.5 16.6 22.9 Other Bunnings 18 21,741,654 7.3 7.3 21.5 21.5 Wareho
Slide 11: Property Portfolio Impact
Property Portfolio Impact • Improved WALE Estimated Weighted Average Lease Expiry (by rent) 10.0 9.0 8.0 Extended lease tenure 7.0 6.0 5.0 Years 4.0 3.0 2.0 Without lease extensions 1.0 0.0 As at 31 December 2009 (Assumes no acquisitions or disposals and exercise of all tenant options) 11
Slide 12: Property Portfolio Impact
Property Portfolio Impact • Extends and smooths lease expiry profile Existing Lease Expiry Post Extended Lease Tenure 12
Slide 13: Property Portfolio Impact
Property Portfolio Impact • Extends leases on existing terms and conditions (more favourable to the Trust than generally available for Bunnings Warehouses in the current market) – Majority with no caps on market rent reviews – Limited committed capital expenditure requirements – No right of repurcha
Slide 14: Increase in Portfolio Capital Value
Increase in Portfolio Capital Value* • Estimated net increase on pro-forma basis of $13.9m • Equivalent to +$0.03 Net Tangible Assets per unit • Increase based on improved (lower) capitalisation rates on some subject properties due to longer committed term • Decrease of 2 properties not included in
Slide 15: Summary
Summary • Portfolio management initiative • Secures an average 6 years’ future rental income for 34 properties • Low cost enhancement of portfolio: – Extends leases on existing terms and conditions – Improved capital value – Longer WALE – Smoothed and extended lease expiry profile • “Locking in an e
Slide 16: Further information
Further information Visit: www.bwptrust.com.au Responsible entity: Bunnings Property Management Limited Tel: (08) 9327 4356 Email: [email protected] The information provided in this presentation should be considered together with the financial statements for the period and previous periods
Slide 17: Appendix A: Schedule of Subject Properties for ELT
Appendix A: Schedule of Subject Properties for ELT * Committed term (years) BGL tenure (years) Estimated Property Name change in Existing committed Revised committed Cap Rate Existing BGL tenure Revised BGL Tenure term term Balcatta 3.7 13.7 13.7 23.7 -0.25% Croydon 6.8 16.8 16.8 26.8 -0.50% 10 year
Slide 18: Appendix A: Schedule of Subject Properties for ELT
Appendix A: Schedule of Subject Properties for ELT * Committed term (years) BGL tenure (years) Estimated Property Name Existing committed Revised committed change in Existing BGL tenure Revised BGL Tenure Cap Rate term term Albany 4.8 9.8 14.8 19.8 -0.25% Altona 3.7 8.7 13.7 18.7 -0.25% Artarmon 8.1
Slide 19: Appendix A: Schedule of Subject Properties for ELT
Appendix A: Schedule of Subject Properties for ELT * Committed term (years) BGL tenure (years) Estimated Property Name Existing committed Revised committed change in Existing BGL tenure Revised BGL Tenure term term Cap Rate Mandurah 3.9 8.9 13.9 18.9 0.00% Mentone 3.7 8.7 13.7 18.7 0.00% Midland 6.7
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