BWP Trust Boosts Income 22% and Raises Interim Distribution Amid Portfolio Growth

Strong Financial Performance

BWP Trust has delivered a compelling half-year result for the six months ended 31 December 2024, with total income rising 22.2% to $100.6 million compared to the prior corresponding period. This growth was largely driven by the acquisition of NPR Property REIT in March 2024 and ongoing annual rent increases across the portfolio.

Net profit after including $91.0 million in fair value gains reached $157.1 million, a significant turnaround from the $53.2 million net profit reported in the prior period, which included fair value losses. Excluding these fair value movements, profit before fair value adjustments still rose a healthy 15% to $66.1 million.

Distribution and Unitholder Returns

The Trust declared an interim distribution of 9.20 cents per unit, marking a 2% increase from 9.02 cents in the previous corresponding period. This distribution reflects a distributable amount of $65.6 million, up 13.3%, signaling BWP’s commitment to delivering steady income growth to its unitholders.

Net tangible assets per unit also improved to $3.92, up 5% from $3.74 a year earlier, supported by unrealised gains on property revaluations. The unit price at the end of December stood at $3.28, reflecting market confidence in the Trust’s underlying asset quality and growth prospects.

Portfolio Expansion and Lease Optimisation

BWP’s portfolio valuation increased to $3.6 billion, up from $3.0 billion a year prior, with occupancy reaching a robust 98.7%. The weighted average lease expiry extended to 4.4 years, up from 3.6 years at the end of 2023, providing greater income security and stability.

Like-for-like rental growth was recorded at 3.3% for the 12 months to December 2024, supported by five completed market rent reviews on Bunnings Warehouse properties that averaged a 2.7% increase. Bunnings exercised nine lease options during the half, underscoring the strength of this key tenant relationship.

Strategic Developments and Growth Initiatives

Key growth initiatives include a $14 million expansion agreement with Bunnings at Pakenham (VIC) and an $11 million redevelopment with a third-party tenant at Midland (WA), signaling BWP’s focus on enhancing asset value and tenant experience.

The Trust is also progressing the repurposing of former Bunnings sites, with active sales and development applications underway at Port Kennedy (WA), Noarlunga (SA), Fountain Gate (VIC), and Northland (VIC). The anticipated divestment of Port Kennedy is expected to complete in the second half of FY2025.

Capital Management and Outlook

BWP maintains a conservative capital structure with gearing at 21.4%, within its preferred range, and a weighted average cost of debt at 4.4%. The Trust continues to hedge interest rate exposure, with 52.4% of borrowings covered by fixed-rate instruments.

Looking ahead, BWP plans to sustain portfolio optimisation and pursue accretive acquisitions while actively recycling non-core assets. Distribution guidance for the second half of FY2025 is set at 9.46 cents per unit, subject to economic conditions, with capital profits potentially supporting distributions.