This article is from the Australian Property Journal archive
BULKY goods retail owner Bunnings Warehouse Property Trust has notched up a solid distributable profit result despite the volatile economic and market conditions.
The trust announced a distributable profit of $40.0 million for the year ended June 30 up from $39.1 million last year. The result was delivered on the back of $65.9 million total income, up by 10.3% from last year due to additional income received from new properties, property upgrades and annual rent reviews.
But the AIFRS adjusted net profit was $0.7 million, including a $39.3 million unrealised loss in the fair value of investment properties.
The trust has declared a final distribution of 6.72 cents per unit bringing the total distribution for the FY08 year to 13.27 cents per unit, a 2.2% increase on last year’s distribution of 12.98 cents per unit.
At June 30 2008, the trust had total assets of $979.9 million, with unitholders’ equity of $638.7 million and total liabilities of $341.2 million representing a gearing ratio of 31.5%.
The trust currently has a total of $380.0 million debt facilities with four major Australian banks. At June 30 2008 borrowings under the facilities were $308.5 million.
During the period, five market rent reviews were completed and one in the process of being determined resulting in a weighted average increase of 6%.
The entire trust portfolio was revalued June 30 at $962.3 million up by $12.1 million; following a net revaluation loss of $39.3 million and capital expenditure of $51.4 million during the year.
The weighted average capitalisation rate of the portfolio was 7.08% compared with 6.58% in June 2007. As a result of the net revaluation loss, the underlying net tangible asset backing of the trust’s units decreased from $2.24 per unit in June 2007 to $2.12 per unit at June 2008.
The weighted average lease expiry of the trust’s portfolio was 6.9 years.
The trust’s responsible entity Bunnings Property Management Limited’s general manager Grant Gernhoefer said he expects volatile economic and market conditions during 2008/09.
“Volatility relating to interest rates and increased bank fees and margins may affect earnings… the trust should benefit from increases in rental income from market rent reviews scheduled for 21 of the trust’s existing Bunnings Warehouses and annual CPI increases for the balance,” he added.
But Gernhoefer said the economic and market conditions impacting on the property sector may generate some buying opportunities for the trust, as the requirement to manage capital leads some existing owners to sell assets to rationalise their property holdings, and capital constraints reduce the number of willing buyers.
“We believe that the trust is well placed to weather current economic and market conditions and take advantage of the opportunities to build on the existing quality portfolio for longer term, sustainable growth,” he concluded.
Bunnings Warehouse Property Trust shares closed 3 cents higher at $1.92.
Australian Property Journal
