Ferret's Stock to Watch: BUNNINGS WAREHOUSE PROP. TRUST09:23,...

Ferret's Stock to Watch: BUNNINGS WAREHOUSE PROP. TRUST
09:23, Tuesday, 15 August 2006

AMASSING PROPERTY INVESTMENTS IN THE CONCEPT OF US HOME DEPOT

Sydney - Tuesday - August 15: (RWE Aust Business News)
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OVERVIEW
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The success of Bunnings Warehouse Property Trust (ASX:BWP) hangs
on how well the Bunnings Group parent does with its 142 stores across the
the country and New Zealand.

Bunnings in turn is owned by Wesfarmers Ltd (ASX:WES) which has
been the anchor entity in the overall operation.

Trust revenue and profit is based on the ownership of warehouse
properties with key business being Bunnings warehouses.

The Trust's properties are on long-term leases to Bunnings Pty
Ltd, a wholly owned subsidiary of Wesfarmers.

Operator of Bunnings Warehouse Property Trust is Bunnings
Property Management Ltd.

The Bunnings Group hardware chain has proved highly successful on
a concept modelled from the giant US Home Depot in the late 1990s.

In fact Howard Smith Hardware group followed the same principles
and was taken out by Wesfarmers in 2001.

A visit to a Bunnings store today is like stepping into a US Home
Depot store.

The Bunnings logo now has a great name in the country and has
been seriously eclipsing the co-operatives.

All this is good for Bunnings Warehouse Property Trust because it
has consistently increased the value of the property in which Bunnings
operate.

Yesterday directors of Bunnings Property Management, the
responsible entity for the Bunnings Warehouse Property Trust, reported a
distributable profit of $38 million, up from $36.1 million last year.

The net profit for the year was $75.2 million, including $37.2
million unrealised gain in fair value of investment properties.

Total income was $55.1 million, up by 8.9 per cent from last
year's $50.6 million due to additional income received from new
properties, property upgrades and annual rent reviews.

A final distribution of 6.39c per unit has been declared and will
be made on August 30.

This brings the total distribution for the 2005/06 to 12.61c per
unit, a 5.4 per cent increase on last year's distribution of 11.96c.

The tax advantaged component for the 2005/06 distribution is
24.22 per cent.

The Distribution Reinvestment Plan remains suspended until
further notice.

SHARE PRICE MOVEMENTS
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Units of the Bunnings Warehouse Property Trust yesterday rose 2c
to $1.98. Rolling high for the year has been $2.18 and low $1.89.
Dividend is 12.61c to yield a handy 6.37 per cent. Earnings per unit was
17.7c with a p/e ratio of 11.19. The Trust has 301.4 million units on
issue with a market cap of $589.3 million.

Current expectations are for continued growth in the 2006/07
financial year.

Ongoing growth opportunities for the Trust are expected as
Bunnings Group continues its rollout of the Bunnings Warehouse network,
and its accelerated store upgrade and refits program.

Bunnings Group operates from over 142 Bunnings Warehouse stores
across Australia and New Zealand and targets opening 10 to 14 new
warehouse stores a year.

It is also pursuing a programme of adapting store formats and
upgrading and refitting existing Bunnings Warehouse stores.

The Trust will continue to actively pursue the acquisition of new
and existing properties from Bunnings Group and where possible add value
to the Trust portfolio through property upgrades.

The Trust will also actively pursue acquisition opportunities of
Bunnings Warehouse properties owned by third parties and consider other
acquisition opportunities where these complement the existing Trust
portfolio.

The Trust's current low gearing ratio provides substantial
capacity for acquisitions as opportunities arise.

The six market rent reviews programmed for the 2006/07 financial
year provide the opportunity to continue to grow rental income from the
existing portfolio.

The directors of the responsible entity are budgeting for
continued growth in revenue and earnings in the 2006/07 financial year as
a result of properties being added to the Trust's portfolio, existing
properties being developed or upgraded, and rental growth from the
portfolio.

BACKGROUND AND LATEST ACCOUNTS
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The Bunnings Warehouse Property Trust was established in 1998
with a focus on warehouse retailing properties and, in particular,
Bunnings Warehouses leased to Bunnings Pty Ltd.

The Trust was listed on the Australian Stock Exchange in
September 1998 following the issue of 132 million ordinary fully paid $1
units.

Wesfarmers subscribed for an initial unitholding of 25 per cent
in the Trust through a wholly owned subsidiary.

At the time of listing, the Trust's portfolio consisted of 20
properties, including 14 completed Bunnings Warehouses and six
development sites.

At June 30, the Trust had total assets of $731.6 million, with
unitholders' equity of $504.5 million and total liabilities of $227.1
million.

The gearing ratio (debt to total assets) at June 30 was 27.5 per
cent, within the Trust's preferred range of 20 to 40 per cent.

At the end of June 88 per cent of the Trust's interest-bearing
debt was hedged at a weighted average rate excluding margins of 5.72 per
cent, and the weighted average term to maturity of the hedged debt was
3.7 years.

During the year the Trust continued to add quality properties to
the portfolio which included the acquisition of an established Bunnings
Warehouse store, which was formerly a BBC Hardwarehouse, at Morley in
Western Australia.

The property was acquired in July 2005 for a total outlay of
$11.7 million.

Development of a new Bunnings Warehouse store at Vermont South in
Victoria was completed in August 2005 at a cost of $14.2 million, and the
Trust also completed the development of a showroom complex adjacent to an
existing Trust-owned Bunnings Warehouse store in Bayswater, Victoria,
during the year.

A $2.9 million upgrade of the existing Northland Bunnings
Warehouse store in Victoria was completed in August 2005, while other
upgrade works were commenced at Croydon in Victoria, Cairns and Lismore
but were not completed during the financial year.

In February the Trust purchased for $3.5 million a one-hectare
parcel of land adjacent to an existing Trust owned Bunnings Warehouse
property at Fyshwick in the ACT.

The acquisition is to allow for future expansion of the existing
Bunnings Warehouse property.

Capital expenditure on acquisitions, developments and upgrades
during the year amounted to $33.8 million.

The property activity undertaken during the year has enhanced or
is expected to enhance in the future the value and geographic
diversification of the Trust's portfolio.

At June 30 the average lease expiry profile of the Trust's
portfolio was 8.9 years.

As required by the newly introduced Australian Equivalents to
International Financial Reporting Standards (AIFRS) the entire Trust
portfolio was revalued at December 31 and again at June 30.

The value of the portfolio increased to $721.1 million, following
net revaluation gains of $37.2 million and $33.8 million capital
expenditure during the year.

This represents a 10.9 per cent increase on the AIFRS-adjusted
fair value at June 30, 2005, and contributed to an increase in the
underlying net tangible asset backing of the Trust's units from $1.54 per
unit to $1.67 per unit for the 12 months to June 30.

ENDS