This article is from the Australian Property Journal archive
BUNNINGS Warehouses landlord, BWP Trust, has delivered a strong first half year profit underpinned by property valuation increases.
Net profit was $348.3 million for the six months to December 31 2021, which included $291.8 million of unrealised gains in the fair value of investment properties to $2,916.7 million, this compares to $144.0 million in the previous corresponding period, which included unrealised valuation gains of $87.1 million.
Excluding the valuations, the trust’s distributable profit was $57.9 million – in line with the pcp.
BWP declared an interim distribution of 9.02 cents per unit, also in line with last year.
The trust’s total income for the period dipped slightly by 0.3% to $75.9 million, after taking into account rent abatements of $332,372 provided to tenants impacted by the COVID-19 lockdowns, which is lower than $403,658 provided in the previous year.
Meanwhile excluding rental income from properties acquired, upgraded or vacated and re-leased, rental income increased by approximately 2.2% for the 12 months to 31 December 2021 compared to 1.8% in the pcp. During the half-year, the entire property portfolio was revalued, 10 by independent valuers and the remaining 63 by the directors’ valuations. Following the revaluations, the trust’s weighted average capitalisation rate tightened to 5.11% from 5.65% in 30 June 2021 and 5.84% in 31 December 2020.
Managing director Michael Wedgwood said rent reviews are expected to contribute incrementally to property income for the half-year to 30 June 2022.
“There are 46 leases to be reviewed to the CPI or by a fixed percentage increase during the
second half of the 2021/22 financial year. There are also 16 market rent reviews of Bunnings Warehouses that remain unresolved and are in the process of being finalised,”
Looking ahead Wedgwood said the primary focus for the remainder of the financial year is on filling any vacancies in the portfolio, progressing store upgrades, re-zonings and extending Bunnings leases through the exercise of options.
“The trust will continue to look for opportunities to acquire assets where there is good potential for value creation,”
Subject to market conditions, BWP expects the distribution for FY22 to be similar to FY21.
