BWP Trust secures 80th Bunnings store
The directors of BWP Management Limited, the responsible entity for the BWP Trust have announced the acquisition of a completed Bunnings Warehouse in Maribyrnong, Melbourne, Victoria, from Bunnings Group Limited.
The number of Bunnings Warehouses owned by the trust is 80 and the total number of properties in the portfolio is 83.
In June 2001, the trust acquired 3.4 hectares of land for $7.1 million, on which a Bunnings Warehouse has since been developed and opened in mid-2013. The trust has been receiving rental income of 8% on the purchase price of the land since that time.
As part of the acquisition of the site, Bunnings was required to undertake remediation of contamination associated with the property, to the satisfaction of all relevant authorities, which has been achieved.
In agreeing to acquire the completed Bunnings Warehouse development, the Trust will pay Bunnings a development fee of $31.98 million, representing a total consideration of $39.075 million for the completed development, supported by an independent valuation at a 6.50% capitalisation rate.
Settlement of the development is expected to occur on 13 February 2015 for the property located at the corner of Williamson Road and Rosamond Road, adjacent to the Highpoint Shopping Centre, in the suburb of Maribyrnong, approximately eight kilometres north-west of the Melbourne central business district.
It is a Bunnings Warehouse with a total retail area of 17,551 square metres and approximately 407 car parking spaces on the site.
The commencing annual rental income of the property is $2.54 million, with Bunnings leasing the property for an initial fixed term of 12 years and a further five optional terms of six years each, at Bunnings’ election.
Under the lease, the rent increases by a fixed three% per annum. At the end of the initial term and at the exercise of each option by Bunnings the rent is subject to a market rent review, having regard to the rents paid at comparable properties. The market rent reviews for the property are subject to a 10% ‘cap and collar’, meaning that the rent cannot rise or fall by more than 10% of the preceding year’s rent.
Managing director, Michael Wedgwood, said the transaction provides a good opportunity to further enhance the quality of the trust’s property portfolio, by adding a very well located large format store, which we expect to meet Bunnings’ requirements in the area, for a number of years.
BWP Trust reported a 14.6% increase to $49.1 million in distributable profit for the first half.