BWP Trust (BWP) H1 2025 earnings summary

Executive summary

• Like-for-like rental growth was 3.3% for the period, with a 2.7% average increase from five Bunnings market rent reviews and nine lease options exercised, extending WALE to 4.4 years.

• Portfolio occupancy improved to 98.7%, and solar installations now cover 54% of properties.

• Interim distribution increased 2.0% to 9.20 cents per unit, and NTA per unit rose to $3.92.

• Major expansions agreed at Pakenham ($14m) and Midland ($11m), with total upgrades of $25m.

• Portfolio optimisation, profitable growth, and renewal remain strategic priorities, with continued focus on repurposing vacated properties and tenant network expansion.

Financial highlights

• Total income rose 22.2% to $100.6 million, mainly due to the NPR acquisition and annual rent increases.

• Net profit for the half was $157.1 million, including $93.2 million in net unrealised gains on investment properties; net profit excluding fair value movements was $66.1 million, up 15.0% year-over-year.

• Distributable amount for the period was $65.6 million, up 13.3% year-over-year.

• Operating cash flow was $53.0 million; free cash flow increased to $47.5 million from $13.1 million year-over-year.

• Portfolio valuation rose to $3.6 billion, with a weighted average capitalisation rate of 5.43%.

Outlook and guidance

• Full-year distribution per unit is guided to grow approximately 2% on FY24, subject to no major economic disruptions.

• Focus areas include repurposing vacated properties, filling vacancies, completing upgrades, extending leases, finalising rent reviews, and energy efficiency improvements.

• 73 leases are scheduled for CPI or fixed rent reviews in 2H FY25, with nine market rent reviews expected to be finalised.

• Continued investment in core retail portfolio and recycling proceeds from divestments into growth initiatives.

• Active recycling of non-core assets and reinvestment in growth initiatives will continue, alongside maintaining a strong and flexible balance sheet.