BWP Group, the AUD 3.96 billion large-format retail property trust anchored by Bunnings, reported a 4.5% year-over-year rise in funds from operations (FFO) to AUD 140.9 million for the fiscal year ended June 30, 2026. Net tangible assets per security increased 3.3% to AUD 4.11, while the portfolio’s weighted average capitalization rate compressed 15 basis points to 5.25% over the 12 months.
The trust’s net fair value gain totaled AUD 371.4 million for the year, including AUD 115.6 million in the second half. Management expenses continued to decline, with the management expense ratio falling to 0.34% from 0.66% in FY2020, reflecting the internalization of management. Gearing decreased to 18.5% from 21.6% a year earlier, though the weighted average cost of debt rose to 4.6% from 4.4%, with average borrowings increasing 17.6% to AUD 940.7 million.
Portfolio occupancy stood at 98.4% at June 30, 2026, with 100% occupancy across non-development assets. Like-for-like rental growth reached 3.0% for the year, supported by CPI-linked reviews on 43% of income, fixed reviews on 52%, and market reviews on 5%. The weighted average lease expiry (WALE) extended to 7.3 years following 62 Bunnings lease resets and extensions during the period. Large-format retail market rent reviews for lease options commencing in FY26 averaged a 9.3% increase, while leasing spreads across 14 tenancy negotiations averaged 23.6%.
BWP completed AUD 300 million in 5-year bond issuance in October 2025 and a AUD 228 million fully underwritten entitlement offer in May 2026. The trust also executed AUD 120 million in divestments, including the sale of Chadstone Homeplus Homemaker Centre for AUD 86 million, Morley for AUD 19.5 million, and Port Kennedy for AUD 14.3 million. Acquisitions included HomeCenter Morayfield in Queensland for AUD 48 million and Sunbury Lifestyle Centre in Victoria for AUD 25.2 million.
Major development projects remain on track for FY27 completion, including Fountain Gate in Victoria, Noarlunga in South Australia, and Pakenham in Victoria. Capital expenditure guidance for FY27 ranges between AUD 55 million and AUD 65 million, excluding divestment proceeds, with distributions expected to rise 3% to AUD 0.20 per security. The payout ratio is guided at 104% of FFO, within the target range of 90% to 110%. The weighted average cost of debt is forecast to rise to between 5.0% and 5.3% in FY27, while the management expense ratio is expected to stabilize near 36 basis points.
The stock rose 0.67% to AUD 3.78 following the results, within a 52-week range of AUD 3.51 to AUD 4.12. BWP maintains a low volatility profile with a beta of 0.55.
