BWP Reports $221.8M Profit, 4.1% Distribution Increase in H1 FY26

Strong Financial Performance

BWP Group has delivered a standout half-year result for the six months ending 31 December 2025, reporting a statutory profit after fair value movements and income tax of $221.8 million. This represents a significant 41.2% increase compared to the previous corresponding period, underscoring the company’s effective execution of its strategic priorities. Revenue also grew by a modest 3.0% to $103.6 million, while the interim distribution per security rose 4.1% to 9.58 cents, reflecting confidence in ongoing cash flow generation.

Strategic Internalisation and Portfolio Optimisation

A key highlight for BWP during the half was the successful internalisation of its management structure, completed on 1 August 2025. This transition has allowed the group to reduce its cost of capital and improve operational control. The company focused on systems enablement and aligning employment arrangements to support this new model. Portfolio optimisation efforts included resetting 62 Bunnings leases and advancing development applications for expansions in Western Australia and New South Wales.

Like-for-like rental income growth of 2.6% and a robust occupancy rate of 96.7% demonstrate the strength of BWP’s tenant mix, which remains heavily weighted towards the Wesfarmers Group and other national retailers. The weighted average lease expiry extended to 7.5 years, providing long-term income security.

Growth Through Acquisition and Asset Repurposing

BWP’s large format retail (LFR) portfolio, valued at approximately $1.2 billion, continues to be a growth engine. The group acquired the fully leased HomeCentre Morayfield in Queensland for $48 million, adding quality tenants such as Amart Furniture and Super Cheap Auto. This acquisition, funded through existing debt facilities, was immediately accretive to earnings.

Asset repurposing remains a focus, with construction underway at Fountain Gate (VIC) and Noarlunga (SA), and development progressing at Broadmeadows Homemaker Centre (VIC). These initiatives aim to maximise the value of stores vacated by Bunnings and capitalise on tenant-led expansion opportunities.

Portfolio Renewal and Capital Management

BWP also advanced its portfolio renewal strategy by divesting three properties at premiums ranging from 9.6% to 56% above their June 2025 valuations. These sales included the ex-Bunnings Morley and Port Kennedy sites in Western Australia and the Chadstone Homeplus Homemaker Centre in Victoria.

In October 2025, the group issued a $300 million five-year bond, enhancing funding flexibility and supporting capital expenditure plans. The bond proceeds will help finance asset repurposing, tenant expansions, portfolio growth, and debt refinancing.

Outlook and Forward Focus

Looking ahead, BWP plans to continue executing its strategic pillars of portfolio optimisation, profitable growth, and portfolio renewal. Capital expenditure of $60-70 million is expected for FY26, primarily directed towards site repurposing and tenant-led projects. The company is also focused on further optimising its cost of capital and leveraging growth opportunities within the LFR market, which benefits from low new supply and strong tenant performance.

Rent reviews scheduled for the second half of FY26, including market rent reviews for key Bunnings warehouses, are anticipated to incrementally boost property income. BWP’s largest tenant, Bunnings, remains well positioned to expand its market footprint, supporting the group’s long-term income stability.