Full Year 2026 BWP Trust Earnings Call

August 19, 2026

Speaker #1: Ladies and gentlemen, thank you for holding, and welcome to the BWP Full Year Results Investor Briefing. Your lines will be muted during the briefing.

Operator 2: Ladies and gentlemen, thank you for holding, and welcome to the BWP full year results investor briefing. Your lines will be muted during the briefing. However, you will have an opportunity to ask questions immediately afterwards, and instructions will be provided on how to do this at that time. I would now like to hand the call over to the Managing Director of BWP, Mr. Mark Scatena. Please go ahead.

Operator: Ladies and gentlemen, thank you for holding, and welcome to the BWP Full Year Results Investor Briefing. Your lines will be muted during the briefing. However, you will have an opportunity to ask questions immediately afterwards, and instructions will be provided on how to do this at that time. I would now like to hand the call over to the Managing Director of BWP, Mr. Mark Scatena. Please go ahead.

Speaker #1: However, you will have an opportunity to ask questions immediately afterwards, and instructions will be provided on how to do this at that time.

Speaker #1: I would now like to hand the call over to the Managing Director of BWP, Mr. Mark Scardina. Please go ahead.

Speaker #2: Thank you. Good morning, everyone. Thanks so much for joining us, and we appreciate that many of you have had a really busy morning, particularly given the volume of reporting.

Mark Scatena: Thank you. Good morning, everyone. Thanks so much for joining us. We appreciate that many of you have had a really busy morning, particularly given the volume of reporting, so thank you for joining. My name's Mark Scatena. I am the managing director of BWP Group, and I am joining you from Perth. With me today is Andrew Ross, BWP's Head of Property, and David Hawkins, BWP's Chief Financial Officer. Today, we are very pleased to announce BWP's results for the full year ending 30 June 2026. Turning to slide 2. To commence today, we acknowledge the traditional owners of country throughout Australia and their continuing connection to lands and waterways upon which we depend. We pay our respects to their elders, past and present. Turning to slide 4 and the FY26 overview.

Mark Scatena: Thank you. Good morning, everyone. Thanks so much for joining us. We appreciate that many of you have had a really busy morning, particularly given the volume of reporting, so thank you for joining. My name's Mark Scatena. I am the Managing Director of BWP Group, and I am joining you from Perth. With me today is Andrew Ross, BWP's Head of Property, and David Hawkins, BWP's Chief Financial Officer. Today, we are very pleased to announce BWP's results for the full year ending 30 June 2026. Turning to slide 2. To commence today, we acknowledge the traditional owners of country throughout Australia and their continuing connection to lands and waterways upon which we depend. We pay our respects to their elders, past and present. Turning to slide 4 and the FY26 overview.

Speaker #2: So, thank you for joining us. My name is Mark Scatina, I'm the Managing Director of BWP Group, and I'm joining you from Perth.

Speaker #2: With me today is Andrew Ross, BWP Head of Property, and David Hawkins, BWP Chief Financial Officer. Today, we're very pleased to announce BWP's results for the full year ending 30 June 2026.

Speaker #2: Turning to slide two to commence today, we acknowledge the Traditional Owners of Country throughout Australia and their continuing connection to lands and waterways upon which we depend.

Speaker #2: We pay our respects to their elders, past and present. Turning to slide four and the FY26 overview, this was an important year for BWP, with delivery across a number of key reset activities that have strengthened income security and provided a platform for income and capital growth over the long term. During the year, BWP completed the internalisation transaction and continued to advance the transition to an internalised model, which included 62 Bunnings leases being reset and extended, as well as store expansion.

Mark Scatena: The year was an important one for BWP, with delivery across a number of key reset activities that have strengthened income security and provided a platform for income and capital growth over the long term. During the year, BWP completed the internalization transaction and continued to advance the transition to an internalized model, which included 62 Bunnings leases being reset and extended, store expansion CapEx for Bunnings' portfolio of AUD 56 million of development capital, and Bunnings store upgrade support, with BWP committed to funding AUD 15 million of network upgrades. Operationally during the year, large format retail, or LFR, made an increased contribution with positive leasing spreads achieved. Portfolio renewal was completed through divestment activity and major repurposing projects were advanced. Turning to slide 5 and an overview of financial and capital management.

Speaker #2: Capital expenditure for the Bunnings portfolio was $56 million of development capital and Bunnings store upgrades. Support with BWP committed to funding $15 million of network upgrades operationally during the year.

Speaker #2: Large format retail, or LFR, made an increased contribution with positive leasing spreads achieved on portfolio renewal. Renewal was completed through divestment activity and major repurposing projects were advanced. Turning to slide five and an overview of financial and capital management.

Speaker #2: The result for the 2026 financial year reflects earnings growth supported by rental growth positive LFR leasing outcomes , lower costs of doing business post Internalisation portfolio valuation growth , including the benefits of an increased weighted average lease expiry post the Internalisation and lease reset and a balance sheet reset to support BWP development and growth pipeline Funds from operations or FFO were $140.9 million , up 4.5% on FY 25 , supported by a lower management expense ratio , reflecting the benefits of the internalised management structure reduced to 0.34% from 0.66% in FY 25 and increased rental income , which more than offset an increase in borrowing costs .

Mark Scatena: The result for the 2026 financial year reflects earnings growth supported by rental growth, positive LFR leasing outcomes, lower costs of doing business post-internalization, portfolio valuation growth, including the benefits of an increased weighted average lease expiry post the internalization and lease reset, and a balance sheet reset to support BWP's development and growth pipeline. Funds from operations, or FFO, were AUD 140.9 million, up 4.5% on FY25, supported by a lower management expense ratio reflecting the benefits of the internalized management structure, reduced to 0.34% from 0.66% in FY25, and increased rental income, which more than offset an increase in borrowing costs. BWP's portfolio value increased AUD 257 million during the year, with a weighted average capitalization rate firming 15 basis points to 5.25%. NTA increased 3.3% or 13 cents to AUD 4.11 per security at 30 June 2026.

Speaker #2: BWP portfolio value increased by $257 million during the year, with a weighted average capitalisation rate firming 15 basis points to 5.25%, and NTA increased 3.3%, or $0.13, to $4.11 per security at 30 June 2026.

Speaker #2: The balance sheet reset was also an important focus during the year , and this included the $300 million , five year bond issuance completed in October 2025 , and the $228 million fully underwritten entitlement offer completed in May 2026 .

Mark Scatena: The balance sheet reset was also an important focus during the year, and this included the AUD 300 million five-year bond issuance completed in October 2025 and the AUD 228 million fully underwritten entitlement offer completed in May 2026. These reset activities have strengthened financial flexibility and provided capacity to fund BWP's development and growth pipeline. Gearing at 30 June 2026 was 18.5%, compared with 21.6% at 30 June 2025. Turning to slide 6 and operational execution. Income security was strengthened through the Bunnings lease reset and extension, with portfolio occupancy remaining very high and portfolio WALE increasing to 7.3 years. Income growth was supported by like-to-like rental growth of 3%, positive LFR leasing spread outcomes, and the addition of HomeCentre Morayfield during the year. Portfolio renewal continued, with the completed divestments of Chadstone, Port Kennedy and Morley generating cumulative gross proceeds 18.6% above pre-divestment valuations.

Speaker #2: These reset activities have strengthened financial flexibility and provided capacity to fund BWP development and growth. Pipeline gearing at 30 June 2026 was 18.5%, compared with 21.6% at 30 June 2025.

Speaker #2: Turning to slide six, operational execution in income security was strengthened through the Bunnings lease reset and extension, with portfolio occupancy remaining very high and the portfolio WALE increasing to 7.3 years.

Speaker #2: Income growth was supported by like for like rental growth of 3% positive LFR leasing spread outcomes and the addition of home home centre Morayfield during the year portfolio renewal continued with the completed divestments of Chadstone , Port Kennedy and Morley generating cumulative gross proceeds 18.6% above pre divestment valuations .

Speaker #2: Major repurposing and development activity also continued across portfolio assets , including Fountain Gate and Aldinga . Midland and Broadmeadows , with the completion of these projects extended expected in FY 27 .

Mark Scatena: Major repurposing and development activity also continued across portfolio assets, including Fountain Gate, Noarlunga, Midland and Broadmeadows, with the completion of these projects expected in FY27. Turning now to slides 8 through 10. Slide 8 details BWP's refreshed strategy and how the group aims to deliver returns to security holders to execute its objective of providing security holders with a secure and growing income stream and capital growth over the long term. Slide 9 illustrates the important reset period of reset across calendar years 2024 to 2026 and the activities completed to improve recurrent income, secure the Bunnings covenant, lower the cost structure, improve alignment with security holders, and reset the balance sheet to enable a platform for growth.

Speaker #2: Turning now to slides eight through ten . Slide eight details BWP refreshed strategy and how the group aims to deliver returns to security holders to execute its objective of providing security holders with a secure and growing income stream and capital growth over the long term Slide nine illustrates the important reset period of reset reset across calendar year 2024 to 2026 , and the activities completed to improve recurrent income , secure the Bunnings Covenant , lower the cost structure , improve alignment with security holders and reset the balance sheet to enable a platform for growth .

Speaker #2: And as shown on slide ten , this reset period has been characterised by portfolio growth , increased net asset backing , growth , capital expenditure , deployment and increased contribution from LFR , reduced balance sheet leverage and growth in both FFO and distributions Turning to slide 12 and tenant income mix and lease expiry .

Mark Scatena: As shown on slide 10, this reset period has been characterized by portfolio growth, increased net asset backing, growth capital expenditure deployment, and increased contribution from LFR, reduced balance sheet leverage, and growth in both FFO and distributions. Turning to slide 12 and tenant income mix and lease expiry. BWP's covenant mix remains strong, with approximately 96% of income derived from Wesfarmers and national retailers. The Bunnings lease reset has materially extended portfolio WALE to 7.3 years. Occupancy was 98.4% at 30 June 2026, with the decrease largely reflecting assets being redeveloped, including Fountain Gate and Noarlunga. Importantly, non-development assets were 100% occupied. Turning to slide 13, and rental income growth and tenant composition. Like-for-like rental growth for the year was 3.0%, reflecting the balanced structure of the lease portfolio, with income reviewed across CPI-linked leases, fixed reviews, and market rent reviews.

Speaker #2: BWP covenant mix remains strong with approximately 90.96% of income derived from Wesfarmers and national retailers. The Bunnings Lease Reset has materially extended the portfolio.

Speaker #2: Wale to 7.3 years occupancy was 98.4% at 30th June 2026 , with a decrease largely reflecting assets being redeveloped , including Fountain Gate and no longer importantly , Non-development assets were 100% occupied Turning to slide 13 and rental income growth and tenant composition like for like rental growth for the year was 3.0% , reflecting the balance structure of the lease portfolio with income reviewed across CPI linked leases .

Speaker #2: Fixed reviews and market rent reviews for FY26, with CPI reviews applied to 43% of the portfolio income, delivered an average increase of 3.1% across all leases.

Mark Scatena: For FY26, CPI reviews applied to 43% of the portfolio income and delivered an average increase of 3.1% across all leases. Fixed reviews applied to 52% of portfolio income and delivered an average increase of 3.0%. Market rent reviews applied to 5% of the portfolio income, with an average increase of 1.8% across all leases. The large format retail component is an increasingly important contributor to portfolio rent, with LFR market rent reviews for lease options commencing in the financial year resolved in an average increase of 9.3%. In relation to Bunnings, four market rent reviews were finalized during the year, with a variance to passing rent negative of 0.7%. Mile End in South Australia remains the outstanding market rent review post the lease reset and is currently in determination. Turning to slide 14 and large format retail leasing outcomes.

Speaker #2: Fixed reviews apply to 52.5% of portfolio income and delivered an average increase of 3.0%. Market rent reviews applied to 5% of the portfolio income, with an average increase of 1.8% across all leases.

Speaker #2: A large format retail component is an increasingly important contributor to portfolio rent. With LFR market rent reviews for lease options commencing in the financial year, resolved in an average increase of 9.3% in relation to Bunnings for market rent, reviews were finalised during the year with a variance to passing rent negative of 0.7%.

Speaker #2: Mile End in South Australia remains the outstanding market rent review post the lease reset and is currently in determination. Turning to slide 14 and large format retail leasing outcomes, LFR leasing outcomes were strong during the year, with leasing spreads across the 14 LFR tenancy negotiations completed during the year averaging an increase of 23.6%.

Mark Scatena: LFR leasing outcomes were strong during the year, with leasing spreads across the 14 LFR tenancy negotiations completed during the year, averaging an increase of 23.6%. These positive results reflect the quality of the respective locations, current market conditions, and the strength of tenant demand for LFR space. Importantly, these leasing outcomes were achieved with minimal incentives, with LFR renewal incentives remaining low. The LFR market remains characterized by favorable fundamentals, including strong population growth, an undersupply of lettable space, and continued tenant demand from national retailers, and provides a favorable backdrop for further leasing activity in the near term. As previously discussed, LFR affords BWP an attractive pathway for income growth, including the completion of repurposing activities of former Bunnings Warehouse properties, expanding lettable area on surplus land, or acquiring assets that complement the existing portfolio. Turning to slide 15 and capitalization rate movements.

Speaker #2: Lease positive results reflect the quality of the respective locations, current market conditions, and the strength of tenant demand for LFR space. Importantly, these leasing outcomes were achieved with minimal incentives.

Speaker #2: With LFR renewal incentives remaining low, the LFR market remains characterised by favourable fundamentals, including strong population growth and undersupply of lettable space, and continued tenant demand from national retailers, and provides a favourable backdrop for further leasing activity in the near term.

Speaker #2: And , as previously discussed , L4 , LFR affords BWP an attractive pathway for income growth , including the completion of repurposing activities of former Bunnings Warehouse properties , expanding lettable area on surplus land or acquiring assets that complement the existing portfolio .

Speaker #2: Turning to slide 15 and capitalisation rate movements, the portfolio weighted average capitalisation rate at 30 June 2026 was 5.25%, representing a two basis point compression over the half and a 15 basis point compression over the 12 months to 30 June 2026.

Mark Scatena: The portfolio weighted average capitalization rate at 30 June 2026 was 5.25%, representing a two-basis point compression over the half and a 15-basis point compression over the 12 months to 30 June 2026. These movements reflect the longer portfolio WALE following the Bunnings lease reset, firmer market capitalization rates from market transaction activity, and value creation through asset repurposing advanced across the portfolio. At 30 June 2026, the 80 portfolio properties were valued at approximately AUD 4 billion, with 12 independent valuations completed in the H2 and 16 independent valuations completed in the H1. The portfolio recorded a net fair value gain of AUD 115.6 million for the H2 and AUD 371.4 million for the full 12 months. The standalone Bunnings Warehouse cap rate was 4.96%, compared with 5.06% at 30 June 2025. Market transaction activity over the last 12 months also reflected continued investor appetite for Bunnings Warehouses.

Speaker #2: These movements reflect the longer portfolio whale following the Bunnings lease reset. Firmer market capitalisation rates from market transaction activity and value creation through asset repurposing advanced across the portfolio. At 30 June 2026, the 80 portfolio properties were valued at approximately $4 billion, with 12 independent valuations completed in the second half and 16 independent valuations completed in the first half.

Speaker #2: The portfolio recorded a net fair value gain of $115.6 million for the second half, and $371.4 million for the full 12 months.

Speaker #2: The standalone Bunnings Warehouse cap rate was 4.96%, compared with 5.06% at 30 June 2025. Market transaction activity over the last 12 months also reflected continued investor appetite for Bunnings Warehouses.

Speaker #2: Turning to slide 16 and the portfolio valuation uplift , the portfolio , the portfolio value increased to 3.96 $1.8 billion at 30th June 2026 , which was $257 million above 30th June 2025 .

Mark Scatena: Turning to slide 16 and the portfolio valuation uplift. The portfolio value increased to AUD 3.961.8 billion at 30 June 2026, which was AUD 257 million above 30 June 2025. The uplift was largely driven by a combination of accretive development activity, increased income, and capitalization rate compression, partly offset by net divestment activity. Importantly, on an estimate at completion basis and net of book value and development costs, the contributions from Fountain Gate, Noarlunga, and Midland during the year were AUD 28.1 million, AUD 18.1 million, and AUD 2.9 million respectively, demonstrating value creation and long-term portfolio growth through BWP's repurposing activities. Turning to slide 17 and the pipeline of accretive capital commitments. BWP has a pipeline of approximately AUD 120 million of upcoming capital commitments to be deployed across the portfolio, comprising asset repurposing, Bunnings expansions, and portfolio upgrades.

Speaker #2: The uplift was largely driven by a combination of accretive development activity , increased income and capitalisation , rate compression , partly offset by net divestment activity Importantly , on an on an estimate at completion basis , a net book value and development costs , the contributions from Fountain Gate nor Lunga and Midland during the year were 2120 $8.1 million , $18.1 million and $2.9 million , respectively , demonstrating value creation and the long term portfolio growth through Bwp's repurposing activities Turning to slide 17 .

Speaker #2: In the pipeline of accretive capital commitments , BWP has a pipeline of approximately $120 million of upcoming capital commitments to be deployed across the portfolio , comprising asset repurposing Bunnings expansions and portfolio upgrades specific to supporting the store network , improvements of our largest tenant , Bunnings at Pakenham in Victoria , around $8 million remains to be funded , with surplus land acquired for $3.2 million and construction commenced in April 2026 .

Mark Scatena: Specific to supporting the store network improvements of our largest tenant, Bunnings, at Pakenham in Victoria, around AUD 8 million remains to be funded, with surplus land acquired for AUD 3.2 million and construction commenced in April 2026. This capital will be rentalized at 6.5% with a new 10-year lease on completion, which is expected in March 2027. For the Bunnings expansions included within the lease reset and internalization transaction, Maitland and Balcatta expansions are expected to commence during FY27, subject to relevant approvals and documentation. Maitland is expected to commence in early 2027 with a 15-month program, and Balcatta is expected to commence in mid-2027 with a 12-month program. Both will be rentalized at a five-year swap plus 200 basis points. Turning to slide 18 and the development project update.

Speaker #2: This capital will be realised at 6.5% , with a new ten year lease on completion , which is expected in March 2027 . For the Bunnings expansions included within the lease reset and Internalisation transaction .

Speaker #2: Maitland and Balcatta expansions are expected to commence during FY 27 , subject to relevant approvals and documentation . Maitland is expected to commence in early 2027 with a 15 month program and Balcatta is expected to commence in mid 2027 with a 12 month program .

Speaker #2: Both will be randomized at a five year swap , plus 200 basis points . Turning to slide 18 and the development project update , these important projects reflect the value creation opportunity from repurposing former Bunnings warehouses into LFR centres and expanding lettable area on surplus land at Fountain Gate , we've expanded to an Llfr centre , a 14,089m² with a project 100% pre-leased to tenants , including BCF rebel , Supercheap Auto , Macpac , Officeworks , Planet Fitness , Red cross and Grilled fountain .

Mark Scatena: These important projects reflect the value creation opportunity from repurposing former Bunnings warehouses into LFR centers and expanding lettable area on surplus land. At Fountain Gate, we have expanded to an LFR center of 14,089 square meters with a project 100% pre-leased to tenants including BCF, Rebel, Supercheap Auto, Macpac, Officeworks, Planet Fitness, Red Cross, and Grill'd. Fountain Gate's estimated fully leased post-development valuation is approximately AUD 94 million, and the estimated yield on development spend is approximately 15%. At Noarlunga, this LFR centre of 11,357 square meters is 78% pre-leased to The Good Guys, BCF, Freedom, and Planet Fitness. The estimated fully leased post-development valuation is approximately AUD 57 million, and the estimated yield on development spend is approximately 12%. Across these projects, including Broadmeadows and Midland, the returns remain attractive and demonstrate BWP's ability to create value through active portfolio management, repurposing capability, and disciplined capital allocation.

Speaker #2: Gates . Estimated fully leased post development evaluation is approximately $94 million , and the estimated yield on development spend is approximately 15% at no longer this LFR centre of 11,357m² is 78% , Pre-leased to the good guys , BCF Freedom and Planet Fitness .

Speaker #2: The estimated fully leased, post-development valuation is approximately $57 million, and the estimated yield on development spend is approximately 12%. This is across these projects, including Broadmeadows and Midland.

Speaker #2: The returns remain attractive and demonstrate BWP s ability to create value through active portfolio management , repurposing capability and disciplined capital allocation Turning to slide 19 and portfolio renewal , BWP continued to renew the portfolio following evaluation of the highest and best use of individual assets , with evaluations including the consideration of development , repurposing and divestment options and outcomes during FY 26 .

Mark Scatena: Turning to slide 19 and portfolio renewal. BWP continued to renew the portfolio following evaluation of the highest and best use of individual assets, with evaluations including the consideration of development, repurposing, and divestment options and outcomes. During FY26, three divestments were completed. Chadstone Homeplus Homemaker Centre in Victoria was sold in June 2026 to an unrelated third party for AUD 86 million. The realized internal rate of return of 15.2% demonstrates the value creation above the original purchase price of AUD 72.5 million via the Newmark Property REIT acquisition in 2024. Morley in Western Australia was sold on 1 December 2025 to an unrelated third party for AUD 19.5 million, AUD 12.5 million above the 30 June 2025 fair value, with the divestment realizing an internal rate of return of 10.2%.

Speaker #2: Three divestments were completed. Chadstone Home Plus Homemaker Centre in Victoria was sold in June 2026 to an unrelated third party for $86 million.

Speaker #2: The realized internal rate of return of 15.2% demonstrates the value creation above the original purchase price of $72.5 million via the NPR acquisition in 2024. Morley, in Western Australia, was sold on the 1st of December 2025 to an unrelated third party for $19.5 million, which is $12.5 million above the 30 June 2025 fair value.

Speaker #2: With the investment realising an internal rate of return of 10.2%, Port Kennedy in Western Australia was sold on the 23rd of January 2026 to an unrelated third party for $14.3 million, which compares to the 30 June 2025 fair value of $10 million.

Mark Scatena: Port Kennedy in Western Australia was sold on 23 January 2026 to an unrelated third party for AUD 14.3 million, which compares to the 30 June 2025 fair value of AUD 10 million. The realized internal rate of return was 5.8%. Looking ahead, Bunnings has confirmed its exit from the Geraldton site, with BWP evaluating a potential divestment during FY27. Turning to slide 20 and LFR acquisitions supporting income growth. The acquisitions of HomeCentre Morayfield and Sunbury Lifestyle Centre reflect the addressable market opportunity in large format retail. It is a material market with strong rates of asset churn or transaction activity and an undersupply of lettable area. HomeCentre Morayfield in Queensland was acquired in November 2025 from an unrelated third party. The purchase price was AUD 48 million plus costs, representing a cap rate of 5.75%.

Speaker #2: The realised internal rate of return was 5.8% . Looking ahead , Bunnings has confirmed its exit from the Geraldton site , with BWP evaluating evaluating a potential divestment during FY 27 .

Speaker #2: Turning to slide 20, LFR acquisitions are supporting income growth. The acquisitions of Home Centre Morayfield and Sunbury Lifestyle Centre reflect the addressable market opportunity in large format retail.

Speaker #2: It is a material market with strong rates of asset churn or transaction activity and an undersupply of lettable area . Homemaker , sorry Home Centre , Morayfield in Queensland was acquired in November 2025 from an unrelated third party .

Speaker #2: The purchase price was $48 million plus costs , representing a cap rate of 5.75% . The centre has 12,086m² of lettable area and is 100% leased to tenants , including Amart Nick Scali , Supercheap Auto , Salvation Army , Pillowtalk and Sydney Tools Home Centre .

Mark Scatena: The center has 12,086 square meters of lettable area and is 100% leased to tenants including Amart Furniture, Nick Scali, Supercheap Auto, The Salvation Army, Pillow Talk, and Sydney Tools. HomeCentre Morayfield is expected to benefit from income growth prospects over time and the identification of incremental income opportunities that optimize asset performance and site utilization. Sunbury Lifestyle Centre in Victoria was acquired in August 2026 from an unrelated third party at a purchase price of AUD 25.2 million plus costs, representing a cap rate of 6%. The center has 5,554 square meters of lettable area and is 100% leased, including The Good Guys, Repco, Total Tools, and PETstock. Our focus for Sunbury will be on near-term income growth and tenant mix opportunities. These acquisitions are consistent with BWP's disciplined approach to growth.

Speaker #2: Morayfield is expected to benefit from income growth prospects over time, and the identification of incremental income opportunities that optimise asset performance and site utilisation.

Speaker #2: Sunbury Lifestyle Centre in Victoria was acquired in August 2026 from an unrelated third party at a purchase price of $25.2 million, plus costs, representing a cap rate of 6%.

Speaker #2: The centre has 5,554 m² of lettable area and is 100% leased, including The Good Guys, Repco, Total Tools, and Petstock.

Speaker #2: Our focus for Sunbury will be on near-term income growth and tenant mix opportunities. These acquisitions are consistent with BWP's disciplined approach to growth.

Speaker #2: They complement the existing portfolio of Bunnings warehouses and LFR assets, and provide exposure to income growth opportunities over time. Turning to slide 12 and sustainability.

Mark Scatena: They complement the existing portfolio of Bunnings warehouses and LFR assets and provide exposure to income growth opportunities over time. Turning to slide 12 and sustainability. Turning to slide 21 and sustainability. BWP's sustainability focus during FY26 included preparation for mandatory climate-related disclosures from FY27 and progressing practical decarbonization initiatives across our portfolio. Gross scope 2 market-based emissions reduced by 19.6% from 148 tonnes of carbon dioxide equivalent in FY25 to 119 tonnes in FY26. BWP achieved a net scope 2 market-based emissions position of zero through the surrender of 149 Australian carbon credit units. Estimated emissions avoided through on-site solar generation increased by 19.2% from 1,381 tonnes of carbon dioxide equivalent in FY25 to 1,645 tonnes in FY26. Solar power installations are now in place at 69% of sites owned at 30 June 2026, compared with 61% in FY25.

Speaker #2: Turning to slide 21 and sustainability . BWP sustainability focus during FY 26 included preparation for mandatory climate related disclosures from FY 27 and progressing practical decarbonisation initiatives across our portfolio .

Speaker #2: Growth scope two market-based emissions reduced by 19.6%, from 148 tonnes of carbon dioxide equivalent in FY25 to 119 tonnes in FY26.

Speaker #2: BWP achieved a net scope two market based emissions position of zero through the surrender of 149 Australian Carbon credit units . Estimated emissions avoided through on site solar generation increased by 19.2% from 1381 tonnes of carbon dioxide equivalent in FY 25 to 1645 tonnes in FY 26 .

Speaker #2: Solar power installations are now in place at 69% of sites owned at 30th June 2026 , compared with 61% in FY 25 . Rainwater recycling is in place at 90% of all sites , compared with 89% in FY 25 .

Mark Scatena: Rainwater recycling is in place at 90% of all sites, compared with 89% in FY25. LED lighting has been installed at 100% of sites in at least one car park, nursery trading area, canopy trading area, or the main store. The focus remains on practical initiatives that are relevant to BWP's portfolio while continuing to prepare for the commencement of mandatory climate-related reporting. Turning to slide 22 and capital management. Average borrowings for the period were AUD 940.7 million, up 17.6% on the prior corresponding period, largely due to debt drawn to fund the management internalization. The weighted average cost of debt for FY26 was 4.6%, compared with 4.4% in FY25, and borrowing costs for the period were AUD 42.7 million, up 22.0%. At 30 June 2026, BWP had an A- stable rating from S&P and an A3 stable rating from Moody's.

Speaker #2: LED lighting has been installed at 100% of sites in at least one car park, nursery trading area, canopy trading area, or the main store.

Speaker #2: The focus remains on practical initiatives that are relevant to BWP portfolio . While continuing to prepare for the commencement of mandatory climate related reporting Turning to slide 22 and Capital Management , average borrowings for the period were $940.7 million , up 17.6% on the prior corresponding period , largely due to debt drawn to fund the management Internalisation .

Speaker #2: The weighted average cost of debt for FY 26 was 4.6% , compared with 4.4% in FY 25 and borrowing costs for the period were $42.7 million , up 22.0% at 30th June 2026 .

Speaker #2: BWP had an A minus stable rating from S&P and an A3 stable rating from Moody's . Hedging cover was 59.3% , with a weighted average rate of 4.01% , including margins and a weighted average term to maturity of 3.5 years .

Mark Scatena: Hedging cover was 59.3%, with a weighted average rate of 4.01%, including margins, and a weighted average term to maturity of 3.5 years for these hedging instruments. Interest cover was 4.2 times, compared with 4.8 times in FY25, and gearing was lower at 18.5%, compared with 21.6% in FY25. Debt covenants remain well covered. Current available debt capacity is approximately AUD 450 million. The balance sheet reset has included both debt diversification and equity-raising activities, comprising the AUD 300 million fixed bond completed in October 2025 at a fixed rate of 4.55%, and also the AUD 328 million fully underwritten entitlement offer completed in May 2026, both of which increased capacity to fund BWP's development and growth pipeline. Turning to slide 24 and the FY27 outlook. Operational execution remains a key focus.

Speaker #2: For these hedging instruments , interest cover was 4.2 times , compared with 4.8 times in FY 25 , and gearing was lower at 18.5% compared with 21.6% in FY 25 .

Speaker #2: Debt covenants remain well covered Current available debt capacity is approximately $450 million . The balance sheet reset has included both debt diversification and equity raising activities , comprising the $300 million fixed bond completed in October 2025 at a fixed rate of 4.55% , and also the $328 million fully underwritten entitlement offer completed in May 2026 , both of which increased capacity to fund BWP development and growth .

Speaker #2: Pipeline Turning to slide 24 and the FY 27 outlook operational execution remains a key focus in FY 27 . BWP will seek further positive leasing spread outcomes within the LFR portfolio .

Mark Scatena: In FY27, BWP will seek further positive leasing spread outcomes within the LFR portfolio, continue to focus on optimizing the cost of capital, and further advance the operational elements of the management internalization, including information technology and human resources. In FY27, leases subject to market rent review represent only 4% of base rent, with CPI reviews to apply to approximately 45% of base rent, and the balance of 51% to be reviewed to fixed increases of 2% to 4%. Effective capital deployment remains a key focus, including the completion of the repurposing projects at Fountain Gate and Noarlunga, expansion projects at Midland and Broadmeadows, and progressing expansions to support Bunnings at Pakenham, Maitland, and Balcatta. BWP will also continue to seek acquisitions that complement the portfolio, including Bunnings warehouses and LFR assets.

Speaker #2: Continue to focus on optimizing the cost of capital, and further advance the operational elements of the management internalisation, including information technology and human resources.

Speaker #2: In FY27, leases subject to market rent review represent only 4% of base rent, with CPI reviews to apply to approximately 45% of base rent, and the balance of 51% to be reviewed to fixed increases of 2% to 4%.

Speaker #2: Effective capital deployment remains a key focus, including the completion of the repurposing projects at Fountain Gate and Aldinga, expansion projects at Midland and Broadmeadows, and progressing expansions to support Bunnings at Pakenham, Maitland, and Balcatta.

Speaker #2: BWP will also continue to seek acquisitions that complement the portfolio , including Bunnings Warehouses and LFR assets . Elevated levels of capital expenditure are expected to continue in FY 27 , reflecting the significant repurposing and expansion activity with capital expenditure expected to be between $55 million and $65 million , excluding divestment proceeds , BWP provides distribution guidance for FY 27 of 20.0 $0.00 per security , representing approximately 3% growth on FY 26 .

Mark Scatena: Elevated levels of CapEx are expected to continue in FY27, reflecting the significant repurposing and expansion activity, with CapEx expected to be between AUD 55 million and AUD 65 million, excluding divestment proceeds. BWP provides distribution guidance for FY27 of AUD 0.20 per security, representing approximately 3% growth on FY26. FFO in FY27 will be improved by like-for-like rental growth, leasing spreads, contributions from repurposing activities and acquisitions, and reduced interest expense post the May 2026 equity raising. This improvement will be moderated by reduced income from recent property divestments. The FFO guidance reflects an expected payout ratio of approximately 104% of FFO, within BWP's target distribution payout ratio of 90% to 110% of FFO. Distributions are expected to utilize recent profits on sale of investment properties to offset reductions in rent resulting from recent divestments.

Speaker #2: FFO and FY 27 will be improved by a like for like rental growth , leasing spreads , contributions from repurposing activities and acquisitions , and reduced interest expense .

Speaker #2: Post the May 2026 equity raising, this improvement will be moderated by reduced income from recent property divestments. The FFO guidance reflects an expected payout ratio of approximately 104% of FFO, within BWP's target distribution ratio of 90 to 110% of FFO. Distributions are expected to utilise recent profits on sale of investment properties to offset reductions in rent resulting from recent divestments, with approximately $57 million of capital profits on sale recorded over the three years to 30 June 2026.

Mark Scatena: With approximately AUD 57 million of capital profits on sale recorded over the three years to 30 June 2026. As always, guidance is subject to no major disruption to the Australian economy or material change in market conditions. Overall, FY27 will see BWP leverage the reset of recent years, focusing on the completion of major repurposing projects, progressing Bunnings expansions, leveraging the lower cost structure post-internalization, and maintaining balance sheet flexibility to support future growth. That concludes my prepared remarks, and I will now hand back to the moderator to facilitate any questions, where Andrew, David, and I are available. Thank you.

Speaker #2: As always , guidance is subject to no major disruption to the Australian economy or material change in market conditions . Overall , FY 27 will see BWP leverage the reset of recent years , focusing on the completion of major refurbishing projects , progressing Bunnings expansions , leveraging the lower cost structure post internalisation and maintaining balance sheet flexibility to support future growth .

Speaker #2: And that concludes my my prepared remarks . And I'll now hand back to the moderator to facilitate any questions or . Andrew , David and I are available .

Speaker #2: Thank you .

Speaker #1: Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced.

Operator 2: Thanks. Thank you. If you would wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two, and if you are on a speaker phone, please pick up the handset to ask your question. Your first question comes from Cody Shield from UBS. Please go ahead.

Operator: Thanks. Thank you. If you would wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two, and if you are on a speaker phone, please pick up the handset to ask your question. Your first question comes from Cody Shield from UBS. Please go ahead.

Speaker #1: If you wish to cancel your request, please press star two. And if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Cody Shield from UBS.

Speaker #1: Please go ahead

Speaker #3: Good morning Mark , David and Andrew . Thanks for the time . Just first question on no longer So 78% Pre-leased there unchanged from the half .

Cody Shield: Good morning, Mark, David, and Andrew. Thanks for the time. Just first question on Noarlunga. So 78% pre-leased there, unchanged from the half. How are conversations going on that one? Is that on track to be fully leased by completion?

Speaker #3: How are conversations going on that one? Is that on track to be fully let by completion?

Speaker #2: Yes, it is. And we're in very advanced negotiations for the last remaining tenancy, so that the 22% is actually only one single tenancy of about 2,000 m².

Andrew Ross: Yes, it is. We are in very advanced negotiations for the last remaining tenancy. The 22% is actually only one single tenancy of about 2,000 square meters.

Speaker #3: Okay . Got it . And then just on development projects , more broadly , look , it's been a good story for the business .

Cody Shield: Okay, got it. Then just on development projects more broadly. Look, it has been a good story for the business. You do have a number of those completing through 2027, though. So, how are you thinking about additional opportunities across the book into the medium-term? Is there a run rate that you would like to hit there?

Speaker #3: You do have a number of those completing through '27, though. So how are you thinking about additional opportunities across the book, you know, into the medium term? Is there a run rate that you'd like to hit there?

Speaker #2: Thanks , Cody . Yes , we do like these projects . And as we've demonstrated , you know , they are good deployments of capital .

Mark Scatena: Thanks, Cody. Yes, we do like these projects. As we have demonstrated, they are good deployments of capital. We do not have as many of those moving forward as you would expect post the lease reset. So we do have some assets that we are currently expanding. Broadmeadows, of course, we have called out post an acquisition of adjacent land. Northland is an asset that we have. It is vacant at the moment, going through planning processes as it relates to that asset. So we are very focused on that. That probably is a more medium-term opportunity, Cody. Of course, deploying capital into Bunnings expansions and supporting its network expansion and optimization is a really strong focus. Of course, we called out Pakenham, Maitland, Balcatta as three key projects that we are very much focused on.

Speaker #2: We don't have as many of those moving forward as you'd expect post the lease reset. So, we do have some assets that we're currently expanding—Broadmeadows, for example.

Speaker #2: Of course , we've we've called out post an acquisition of adjacent land . Northland is an asset that we have vacant at the moment , going through planning processes as it relates to to that asset .

Speaker #2: So we're very we're very focused on that . That probably is a more medium term opportunity . Cody . And of course , deploying capital into Bunnings expansions and supporting its network expansion and optimization is a really strong focus .

Speaker #2: And of course , we've called out Pakenham , Maitland , Balcatta as three key projects that we're very much focused on . And , you know , we hope over time , if we can be a good capital provider for those prospects that in time we can do more of those with Bunnings

Mark Scatena: And we hope over time, if we can be a good capital provider for those prospects, that in time we can do more of those with Bunnings.

Speaker #3: Got it. And then maybe just a last one on the hedging levels. So, looking a little bit further out, I mean, you're hedging a touch light.

Cody Shield: Got it. And then maybe just the last one on the hedging level. If look a little bit further out, I mean, your hedging's a touch light. Are you kind of taking a view on the rate trajectory there? Or happy to be a little bit under-hedged? How are you thinking about that?

Speaker #3: Are you kind of taking a view on the rate trajectory there, or are you happy to be a little bit unhedged?

Speaker #3: How are you thinking about that?

Speaker #2: Do you want to take that on, Dave?

Mark Scatena: Do you want to take that one, Dave?

Speaker #4: Yes . Sorry , sorry . I just we we revisit our hedging at every board meeting . We're looking at things on a regular basis .

David Hawkins: Yeah, sorry. We revisit our hedging at every board meeting. We're looking at things on a regular basis. Our aim is probably to turn some of our bank debt into MTNs, and we'll probably look at doing future MTNs as part of our hedging strategy.

Speaker #4: Our aim is probably to turn some of our bank debt into MTNs, and we'll probably look at doing future MTNs as part of our hedging strategy.

Speaker #3: Okay. Got it. Thanks, guys.

Cody Shield: Okay, got it. Thanks, guys.

Speaker #1: Thank you. Your next question comes from Howard Penny from Citi. Please go ahead.

Operator 2: Thank you. Your next question comes from Howard Penny from Citi. Please go ahead.

Operator: Thank you. Your next question comes from Howard Penny from Citi. Please go ahead.

Speaker #5: Thank you, and congrats on the results. I just have a similar question, just on acquisitions. I see that on the acquisition front, you've been more active on the LVR, LFR side.

Howard Penny: Thank you, and congrats on the results. It is a similar question just on acquisitions. I see that on the acquisition front, you are being more active on the LFR side. But if I look at the cap rates that you are buying at, say 5.75% and 6%, which is broadly in line with some of the deals in Bunnings warehouses recently. My main question is, what differentiates those LFR acquisitions from what you could have alternatively bought just in traditional Bunnings assets in the market?

Speaker #5: But if I look at the cap rates that you're buying at 5.75 and 6% , which which is broadly in line with some of the deals in Bunnings warehouses recently , my main question is what differentiates those LFR acquisitions from what you could have alternatively bought just in traditional Bunnings assets in the market

Speaker #2: Thanks , Howard . I'll just talk to LFR first . Yes . You know , I think we've we've communicated most certainly at the half in some of the addressable market context .

Mark Scatena: Thanks, Howard. I will just talk to LFR first. Yes, I think we have communicated most certainly at the half in some of the addressable market context we gave, that we like the LFR market, and I think the two examples, the two acquisitions, HomeCentre Morayfield and Sunbury Lifestyle Centre, we have called out that we think over time there is curation, there are leasing spread opportunities. So that income growth that sits in, I suppose that acquired portfolio is strong and would be stronger relative to a Bunnings asset, for example, where we understand the lease structures that sit and the income growth that sits within that. So, we are very comfortable with the purchasing of those assets. We most certainly are active in regards to due diligence as it relates to other LFR assets across the country.

Speaker #2: We have that that we like the market . And I think the two examples , the two acquisitions , Morayfield and Sunbury . We have called out that we think over time there is curation .

Speaker #2: There are leasing spread opportunities . So that income growth that sits in , I suppose , that acquired portfolio is strong . And and would be stronger relative to a Bunnings asset , for example , where we understand the lease structures that sit and the income growth that sits within that .

Speaker #2: So we're very comfortable with the purchasing of those assets . We most certainly are active in regards to due diligence as it relates to other LFR assets across the country , and , you know , we're hopeful at the time that that we can convert some of those opportunities , assuming pricing is appropriate and we can get the incremental return rate that we desire as it relates to Bunnings , we seldom see Bunnings transacted .

Mark Scatena: We are hopeful over time that we can convert some of those opportunities, assuming pricing is appropriate and we can get the incremental return rate that we desire. As it relates to Bunnings, we seldom see Bunnings transacted, I think, Howard, at a comparable rate to perhaps the two examples that we have acquired in Sunbury and obviously Morayfield. That blended rate between 5.75% and 6%, I think you will see, Howard, on our slide 15. I think you can see there where transactions have been in Bunnings standalone cap rates. I think, if you just take an average really over the last 2 years, it is a number closer to 5, Howard. So good metropolitan Bunnings, highly desirable, highly sought after. We have spoken at length that it is competitive in regards to different sources of capital for those Bunnings assets.

Speaker #2: I think Howard at a comparable rate to perhaps the two examples that we have acquired in Sunbury, and obviously more that blended rate between 5.75 and 6.

Speaker #2: I think you will see how it is on our slide 15. I think you can see there where transactions have been and Bunnings standalone cap rates.

Speaker #2: And so I think, you know, if you just take an average really over the last two years, it's a number closer to five.

Speaker #2: Howard so good Metropolitan Bunnings highly desirable , highly sought after . We've we've spoken at length that it's competitive in regards to different sources of capital for those Bunnings assets and you know I think there is still very much a differential between LFR and Bunnings .

Mark Scatena: I think there is still very much a differential between LFR and Bunnings standalone warehouse cap rates.

Speaker #2: Standalone warehouse cap rates .

Speaker #5: Thank you . And just my second question . Post the capital raise a lot of the discussion in the market was around what BWP is going to do with the capital and what is the likely , you know , what are the likely potential acquisitions , etc.

Howard Penny: Thank you. Just my second question. Post the capital raise, a lot of the discussion in the market was around what BWP is going to do with the capital and what are the likely potential acquisitions, et cetera. I can see, of course, the capital commitments are part of that as well as the acquisitions, but the gearing is still very low. So can we expect a lot more activity and maybe some bigger deals potentially happening in the future?

Speaker #5: And I can see, of course, the capital commitments are part of that, as well as the acquisitions. But the gearing is still very low.

Speaker #5: So can we expect a lot more activity and maybe some bigger deals potentially happening in the future?

Mark Scatena: Obviously, Howard, if you think about how we guided during the communication in May, at the time of the raising. We guided that on a pro forma basis post essentially at the time, both underway, commenced and planned activities, that we would see gearing sitting just above 20%. If we deployed that AUD 163 million of capital, I think we have given an update in this pack that we have got 120 of that to continue to spend, not deployed. So we still see post that expansion activity, that repurposing activity and some of that upgrade work, that will be sitting in the low end of the range, Howard, and anything over and above inorganically, for example, Sunbury, would send us a little higher into the range. So, difficulty to guide, of course, on inorganic activity, Howard.

Speaker #2: Obviously, how do you think about how we guided during the communication in May? At the time of the raising, we guided that on a pro forma basis.

Speaker #2: Post essentially, at the time both underway, commenced and planned activities, we would see gearing sitting just above 20% if we deployed that $163 million of capital.

Speaker #2: I think we've given an update in this pack that we've got 120 of that to , to , to continue to spend , not deployed .

Speaker #2: So we still see both that expansion activity, that repurposing activity, and some of that upgrade work that will be sitting in the low end of the range.

Speaker #2: Howard . And anything over and above in organically , for example , Sunbury would would send us a little higher into the range .

Speaker #2: So difficult to give a guide , of course , on inorganic activity . Howard . But post the expansion deployment of capital , we'll be sitting at the low end .

Mark Scatena: But post the expansion deployment of capital, we will be sitting at the low end, all things being equal, and anything inorganically would set that perhaps higher, depending, of course, how we fund it, Howard.

Speaker #2: All things being equal , and anything Inorganically would set that perhaps higher , depending , of course , how we fund it , how it .

Speaker #5: Thank you very much, and congrats once again.

Howard Penny: Thank you very much, and congrats once again.

Speaker #1: Thank you. Your next question comes from Simon Chan from Morgan Stanley. Please go ahead.

Operator 2: Thank you. Your next question comes from Simon Chan from Morgan Stanley. Please go ahead.

Operator: Thank you. Your next question comes from Simon Chan from Morgan Stanley. Please go ahead.

Speaker #6: Good day guys . Hope you're well . Hey , Mark , just want to get some comments from you on LFR . The leasing spreads .

Simon Chan: Good day, guys. Hope you are well. Hey, Mark, just wanted to get some comments from you on LFR. The leasing spreads there were obviously very good. I really just have two questions. One, are there some funnies in there which has inflated the numbers? And two, can you talk a bit about the WALE of your LFR portfolio? Just interested to see if there is some upside in the near term, if similar leasing spreads can be crystallized over the next year or two.

Speaker #6: There were obviously very good . I really just have two questions . One , are they any some funnies in there , which is , you know , inflated the numbers .

Speaker #6: And two , can you talk a bit about the whale of your LFR portfolio ? Just interested to see , you know , if there's some upside in the near term , if these if similar leasing spreads can be crystallised over over the next year or two .

Speaker #2: I think Simon . Yeah . LFR , yes , I think the way to answer the . 23% is , you know , every asset , every location within an asset has its own characteristics .

Mark Scatena: Oh, thanks, Simon. LFR, yes. I think the way to answer the 23% is every asset, every location within an asset has its own characteristics. I think that cohort of those 14 negotiations that we called out had some favorable elements, so I wouldn't be assuming that that is run rate. I think we said that for those LFR leases that would commence in 2026, the subset of that they were just north of 9%. We are confident, and I think we said this at the time, Simon, of one competence that we absolutely have, and Andrew and the team have evolved over many years, is understanding a market rent review lease reset negotiation.

Speaker #2: And I think that cohort of those 14 negotiations that we called out, I think had some favourable elements. And so I wouldn't be assuming that that is run rate.

Speaker #2: I think we said that for those LFR leases , that that that would commence in 26 , the subset of that that they were about just north of 9% .

Speaker #2: You know , we are confident . And I think we said this at the time , Simon , of , you know , what one competence that we absolutely have , and Andrew and the team have evolved over many years is understanding a market rent review kind of lease reset negotiation .

Speaker #2: And I think we might have said during the internalization discussions, with many on the call, that we would hope to deploy some of that capability into the LFR part of the portfolio.

Mark Scatena: I think we might have said during the internalization discussions with many on the call that we would hope to deploy some of that capability into the LFR part of the portfolio. Hopefully that rate of spread reflects some of that capability. 23% is a strong outcome, but again, I think every asset is very different. Every asset has its own relativities. I'll let Andrew perhaps comment on the WALE or anything else in regards to expected spreads.

Speaker #2: Hopefully , that that rate of spread reflects some of that capability . I , you know , 23% is a strong outcome . But again , I think every asset is very different .

Speaker #2: Every asset has its own own . Owen . Owen Relativities . But I'll let Andrew perhaps comment on the whale or anything else in regards to expected spreads .

Speaker #2: Yeah . So Simon , we're we're about 20 to 25% through this program of , you know , going through the , the LFR portfolio and negotiating either at lease renewal or mid-term market rent reviews , most of them are lease renewal or , and , or options .

Andrew Ross: Yeah. Simon, we're about 20% to 25% through this program of going through the LFR portfolio and negotiating either at lease renewal or midterm market rent reviews. Most of them are lease renewal and/or options. It is a strong result. As Mark said, it's site specific. I've always said this about Bunnings Warehouse market reviews as well. What I would say is there's definitely been a step change in the market rental across Australia for large format retail. It's been a function of the cost through COVID to develop new supply, where tenants have had to pay higher rentals for developers and owners like ourselves to develop new product. Moving forward, I envisage it will be. I'm definitely forecasting well more than CPI increases across our existing portfolio.

Speaker #2: And so it is a strong result . And as Mark said , it's site specific . And I've , I've always said this about Bunnings warehouse market reviews as well .

Speaker #2: But what I would say is there's definitely been a step change in the market rental across Australia for large format retail and and , and it's been a function of the the cost through Covid to develop new supply where tenants have had to pay higher rentals for developers and owners like ourselves to , to develop new product .

Speaker #2: So it , it moving forward , I envisage it will be Well , I'm definitely forecasting . Well more than CPI increases across our existing portfolio .

Andrew Ross: Our current WALE on the LFR portfolio is about 6.5 years. We see opportunity in FY27 and FY28 to get some good rent reversion from those leasing spreads and at minimal incentives. I think it's important to call out the 0.6 of 1% in terms of incentives for the existing portfolio. You've got to look at both of them hand in hand.

Speaker #2: And and I and , and our current whale on the LFR portfolio is about six and a half years . But we see opportunity in FY 27 and FY 28 to to get it's a good rent reversion from those leasing spreads and at minimal incentives .

Speaker #2: So, I think it's important to call out the point: six-tenths of one percent in terms of incentives for the existing portfolio.

Speaker #2: So you've got to look at both of them hand in hand.

Speaker #6: I assume the 0.6% is a little bit assisted by... They're all renewals, rather than new leases. Would that be fair? Andrew?

Simon Chan: I assume that the 0.6% is a little bit assisted by, they are all renewals rather than new leases. Would that be fair, Andrew?

Speaker #2: Absolutely . They are . Well , well , no no no no , they are existing properties . So it's not the those incentives don't include the development that fountain gate are no longer .

Andrew Ross: Absolutely. They are. Well, no, they are existing properties, so those incentives do not include the developments at Fountain Gate and Noarlunga. They sit just under 2%, but they are not like for like existing portfolio incentives.

Speaker #2: They sit just under 2%. But they're not like-for-like existing portfolio incentives.

Speaker #6: Yeah that's fair . That's all I got this morning guys . Thanks , mate . See you soon . Cheers .

Simon Chan: Yeah, that is fair. That is all I got this morning, guys. Thanks, mate. See you soon. Cheers.

Speaker #2: Thanks .

Andrew Ross: Thanks, Alan.

Mark Scatena: Thanks, Alan.

Speaker #1: Thank you. Your next question comes from Richard Jones from JP Morgan. Please go ahead.

Operator 2: Thank you. Your next question comes from Richard Jones from J.P. Morgan. Please go ahead.

Operator: Thank you. Your next question comes from Richard Jones from JPMorgan. Please go ahead.

Speaker #7: Hi . Good afternoon . It's now Mark . Just interested in in your FY 27 guidance . You've got dividend growth of 3% .

Richard Jones: Good afternoon, it's now. Mark, just interested in your FY27 guidance. You have dividend growth of 3%. The payout ratio looks like it's going from 100 to 104. So, it implies FFO is not moving. Just wondering if you can just talk us through the main moving parts.

Speaker #7: The payout ratio looks like it's going from 100 to 104, so it implies FFO is not moving. Just wondering if you can talk us through the main moving parts, yeah?

Mark Scatena: Yeah. Thanks, Richard.

Speaker #7: Implied guidance .

Richard Jones: in that implied guidance.

Speaker #2: Yeah . Sorry . Sorry , Richard . Yes . So so I think the best way of probably framing this and this is to some degree , why when we gave guidance on payout in the last 12 months , we gave that range between 90 and 110 .

Mark Scatena: Yeah. Sorry, Richard. Yes. I think the best way of probably framing this, and this is to some degree why when we gave guidance on payout in the last 12 months, we gave that range between 90% and 110% at that time. For example, we had repurposing activity and we had likely divestment activity. I think if you essentially add back the lost income from divestments in 2027, of which Chadstone is a very significant contributor there, you broadly would arrive at a normalized kind of FFO in line with distributions. I would simply guide that some lost income is a headwind to FFO in 2027.

Speaker #2: At that time , for example , we had repurposing activity and we had likely investment activity . And I think if you essentially add back the lost income from divestments in 27 , of which Chadstone is a very significant contributor , there , you broadly would arrive at a normalised kind of FFO in line with distributions .

Speaker #2: So I would simply guide that some lost income is a headwind to FFO in '27.

Speaker #7: Okay. And so, just moving forward, when would you anticipate FFO and DPS will align?

Richard Jones: Okay. So just moving forward, when would you anticipate FFO and DPS will align?

Speaker #2: Yeah . I mean , we again , probably difficult to give guidance beyond , but we expect unit FFO growth in FY 28 .

Mark Scatena: Yeah. Again, probably difficult to give guidance beyond, but we expect unit FFO growth in FY28.

Speaker #7: Okay. The MMR at 34 points annualized, is that a stabilized number?

Richard Jones: Okay. The MER at 34 points annualized, is that a stabilized number?

David Hawkins: It's rude to say it here. It's likely to be by around 36 basis points going forward. There's some additional costs this year in regards to having AGMs, REM reports, and adding a couple additional team members with incentives as well.

Speaker #4: It's rich. It's likely to be probably around 36 basis points going forward. There's some additional costs this year in regards to having AGM reports and adding a couple of additional team members with incentives as well.

Speaker #7: Thank you , David . And then just just in terms of Portfolio movements , you're flagging Geraldton as a potential divestment . Are there other assets on and and balancing that , do you think you'd be a net buyer in 27 or is it just a CapEx offsetting the sales essentially

Richard Jones: Thank you, David. Just in terms of portfolio movements, you're flagging Geraldton as a potential divestment. Are there other assets gone on and balancing that, do you think you'd be a net buyer in FY27 or is it just a CapEx offsetting the sales essentially?

Mark Scatena: Yeah, Richard, we flagged Geraldton, clearly we've called that out. So that will be a process we'll complete and review. We don't have clearly in the near term pipeline any other divestments at this point that we would flag. Yes, anything inorganic in terms of accretive investments would perhaps offset that divestment.

Speaker #2: Yeah . Richard . I mean , we flagged Geraldton clearly . We've called that out . So that will be a process . We'll will complete and review .

Speaker #2: And then we don't have Clearly in the near term pipeline any other divestments at this point that we would flag . So yes , anything in organic in terms of accretive investments would perhaps offset offset that divestment

Speaker #7: Okay, thanks, Mark. No problem.

Richard Jones: Okay. Thanks, Mark. That's all from me.

Mark Scatena: No probs.

Speaker #1: Thank you. Your next question comes from Tom Bodett from Jarden. Please go ahead.

Operator 2: Thank you. Your next question comes from Tom Bodor from Jarden. Please go ahead.

Operator: Thank you. Your next question comes from Tom Bodor from Jarden. Please go ahead.

Speaker #7: Good morning Mark . Andrew . David , just one from me . You've got a outrage . That sort of 90 to 110% range .

Tom Bodor: Good morning, Mark, Andrew, David. Just one from me. You have got a payout range in that sort of 90% to 110% range. Where do you see that settling long term once we get through all these sort of moving parts around divestments and repurposing?

Speaker #7: Where do you see that settling long term, once we get through all these sort of moving parts around divestments and repurposing?

Speaker #2: Yeah . Tom . I suppose , you know , we've we've we've given the range and it's something we , we , we , we will operate within , of course , you know , the guidance we give is guidance ahead 12 months , but we would hope over time .

Mark Scatena: Yeah, Tom, I suppose we have given the range and it is something we will operate within, of course. The guidance we give is guidance ahead 12 months, but we would hope over time, Tom, that we are in the midpoint, towards the midpoint of that range, of course.

Speaker #2: Tom, we're at the midpoint, towards the midpoint of that range, of course.

Speaker #7: Okay. So there's no intention to hold back any FFO through the cycle to cover maintenance and leasing CapEx.

Tom Bodor: Okay, there is no intention to hold back any FFO through cycle to cover maintenance and leasing CapEx?

Speaker #2: No , no

Mark Scatena: No.

Tom Bodor: Okay, thanks.

Speaker #7: Thanks

Speaker #1: Thank you. Your next question comes from Callum Brahma from Macquarie. Please go ahead.

Operator 2: Thank you. Your next question comes from Callum Brahma from Macquarie. Please go ahead.

Operator: Thank you. Your next question comes from Callum Bramah from Macquarie. Please go ahead.

Speaker #8: Good morning. I just had a couple of questions. I was just looking at slide 27, which talks about the contracted rent escalations.

Callum Brahma: Morning. I just had a couple of questions. I was just looking at slide 27, which talks to the contracted rent escalations. I just wondered, looking at 27, you have the 4% expiries that you flagged, or not expiries, those that are exposed to market reviews. Are you able to just give me an idea of what your expectations are there or things we need to be thinking about on that? And where is that number when we look into 2028 and 2029?

Callum Bramah: Morning. I just had a couple of questions. I was just looking at slide 27, which talks to the contracted rent escalations. I just wondered, looking at 27, you have the 4% expiries that you flagged, or not expiries, those that are exposed to market reviews. Are you able to just give me an idea of what your expectations are there or things we need to be thinking about on that? And where is that number when we look into 2028 and 2029?

Speaker #8: I just wondered looking at 27 you've got the 4% expiries that you flagged that are not expiries that those that are exposed to market reviews , are you able to just give me an idea of what your expectations are there , or things we need to be thinking about on , on that ?

Speaker #8: And where is that number? When we look into 28 and 29?

Speaker #2: Yeah , sure . Well , obviously that 4% is pretty much just the LFR component of the portfolio , given we've done the lease reset for all the Bunnings warehouses and the first lease expiry , excluding Geraldton , of course , is is another 4 or 5 years away .

Andrew Ross: Well, obviously that 4% is pretty much just the LFR component of the portfolio, given we have done the lease reset for all the Bunnings Warehouses. The first lease expiry, excluding Geraldton, of course, is another 4 or 5 years away. FY28 is fairly consistent with that 4% of the total portfolio, and you will actually find over the next 4 years it is about the same each year, so 4% to 5% maximum.

Speaker #2: So, FY28 is fairly consistent with that 4% of the total portfolio. And you'll actually find over the next four years, it's about the same each year.

Speaker #2: So, 4% to 4.5% maximum.

Speaker #8: Okay . And I think going to . Simon's question earlier is , is the , the LFR market reviews that you achieved this period indicative of , of what we should expect or that is unusually high ?

Callum Brahma: Okay, and I think going to Simon's question earlier, is the LFR market reviews that you achieved this period indicative of what we should expect, or that is unusually high?

Callum Bramah: Okay, and I think going to Simon's question earlier, is the LFR market reviews that you achieved this period indicative of what we should expect, or that is unusually high?

Speaker #2: Look , I don't think you should expect 23% across the rest of the portfolio , but as I kind of said to Simon , we're we're forecasting well north of CPI .

Andrew Ross: Look, I do not think you should expect 23% across the rest of the portfolio. As I kind of said to Simon, we are forecasting well north of CPI, and that is because we have actually seen a marked change in the market rents across our entire portfolio. It is not site specific or state specific to Queensland or New South Wales. It is across the board.

Speaker #2: And that's because we've actually seen a marked change in the market rents across our entire portfolio. So it's not site-specific or state-specific to Queensland or New South Wales.

Speaker #2: It's across the board

Speaker #8: Okay . And maybe just a couple of other ones . The CapEx , I think this year , 55 to 65 million , is that what we should expect on a go forward rough run rate and the kind of yield on cost that you would expect to achieve on that CapEx spend

Callum Brahma: Okay. Maybe just a couple other ones, Stu. The CapEx, I think this year, AUD 55 to 65 million. Is that what we should expect on a go forward rough run rate and the kind of yield on cost that you would expect to achieve on that CapEx spend?

Callum Bramah: Okay. Maybe just a couple other ones, Stu. The CapEx, I think this year, AUD 55 to 65 million. Is that what we should expect on a go forward rough run rate and the kind of yield on cost that you would expect to achieve on that CapEx spend?

Speaker #2: Do you want me to take that, or—

Mark Scatena: Dave, do you want me to take that or, Cameron?

Speaker #4: I mean , this is probably the FY 27 is probably higher going forward . You'll only have what the Bunnings upgrades and redevelopments .

David Hawkins: I mean, this year's probably, FY27 is probably higher going forward. You'll only have what the Bunnings upgrades and redevelopments and then staying business CapEx, which we don't get a return on, obviously, it probably range between AUD 8 million to AUD 13 million going forward a year.

Speaker #4: And then staying business CapEx will probably which we don't get a return on . Obviously , it will range between 8 to $13 million going forward a year .

Speaker #8: Okay . And then .

Callum Brahma: Okay. And then

Callum Bramah: Okay. And then

Mark Scatena: Callum, in regards to yield on incremental cost, I think we've guided pretty strongly on slide 18 to that project spend portfolio, and I think if you then take Bunnings expansions, we've called out the five-year swap plus 200 basis points, so that gives you a good guide to the yield on that cost. So I'd probably kind of use those two elements to forecast that.

Speaker #2: In regards to your yield on incremental cost , I think , you know , we've guided pretty strongly on slide 18 to , you know , that project spend portfolio .

Speaker #2: And I think if you then take a Bunnings expansion, you know, we've called out the five-year swap plus 200 basis points.

Speaker #2: So that gives you a good guide to the yield on that cost . So I'd probably kind of use those to , two elements to , to forecast that .

Speaker #8: Yeah. Perfect, thank you. And then just on the weighted average cost of debt, I just wondered what your expectation was of where that's going in '27.

Callum Brahma: Yeah, perfect. Thank you. Just on weighted average cost of debt, I just wondered what your expectation was of where that is going in 2027. I think it was 4.6 in 2026. While you are just talking about that cost of debt, you alluded to, I think, maybe what form of debt you are going to seek when you have the refinancings come up in 2028, 2029. Is there maybe margin saving opportunities, and where you see your spot cost of debt?

Callum Bramah: Yeah, perfect. Thank you. Just on weighted average cost of debt, I just wondered what your expectation was of where that is going in 2027. I think it was 4.6 in 2026. While you are just talking about that cost of debt, you alluded to, I think, maybe what form of debt you are going to seek when you have the refinancings come up in 2028, 2029. Is there maybe margin saving opportunities, and where you see your spot cost of debt?

Speaker #8: I think it was 4.6 in 26 . And what you just sort of talking about that cost of debt you alluded to , I think , you know , maybe what form of debt you're going to seek when you have the refinancings come up in 28 , 29 , is there maybe margin saving opportunities and where you see your spot , cost of debt

Speaker #4: Yeah . So , so we're forecasting based on the current current kind of swap rate of 4.8% . Our cost of debt for the year , FY 27 is likely to be between that 5% to about 5.3% , subject to obviously any RBA decisions and movements in the swap rates in margin compression , we've always very kind of tightly priced our margins , our margins .

David Hawkins: Yeah. So we are forecasting based on the current swap rate of 4.8%. Our cost of debt for FY27 is likely to be in between that 5% to about 5.3%, subject to obviously any RBA decisions and movements in swap rates. In margin oppression, we have always very tightly priced our margins. So there is not a large amount of wiggle room that we can see at the moment. If you take, for instance, our October 2025 issue, we issued a five-year bond at 105 basis points, and I think that is relative to where the market is at the moment.

Speaker #4: So there's not a large amount of wiggle room that we can see at the moment . You know , if you take , for instance , our October 25th issue , we issued a five year bond at 105 basis points .

Speaker #4: And I think that's relative to where the market is at the moment.

Speaker #8: Yeah, fantastic. Thank you so much for the colour—appreciate it.

Callum Brahma: Yeah. Fantastic. Thank you so much for the color. Appreciate it.

Callum Bramah: Yeah. Fantastic. Thank you so much for the color. Appreciate it.

Speaker #1: Thank you. Once again, to ask a question, please press star one. Your next question comes from Clare McHugh from Green Street.

Operator 2: Thank you. Once again, to ask a question, please press star 1. Your next question comes from Claire McHugh from Green Street. Please go ahead.

Operator: Thank you. Once again, to ask a question, please press star 1. Your next question comes from Claire McKew from Green Street. Please go ahead.

Speaker #1: Please go ahead

Speaker #9: Hi team . Just a follow up on the dividend question . So I'm just curious . Obviously the payout ratios around 104% of FFO .

Claire McHugh: Hi, team. Just to follow up on the dividend question. I am just curious, obviously the payout ratio is around 104% of FFO, but then if we overlay your CapEx, TI is obviously pretty modest, but then there is also some recurring maintenance CapEx that will naturally come through. I am just thinking about what is the reluctance to reset your dividend, especially when your dividend yield is like a low 5%, your marginal debt cost is higher, so shareholders are now funding a dividend with debt at a higher cost, which is in theory all else equal dilutive. I am just wondering what is the reluctance to just reset it a bit lower and to bring in that recurring CapEx profile into the equation.

Claire McKew: Hi, team. Just to follow up on the dividend question. I am just curious, obviously the payout ratio is around 104% of FFO, but then if we overlay your CapEx, TI is obviously pretty modest, but then there is also some recurring maintenance CapEx that will naturally come through. I am just thinking about what is the reluctance to reset your dividend, especially when your dividend yield is like a low 5%, your marginal debt cost is higher, so shareholders are now funding a dividend with debt at a higher cost, which is in theory all else equal dilutive. I am just wondering what is the reluctance to just reset it a bit lower and to bring in that recurring CapEx profile into the equation.

Speaker #9: But then, if we overlay your CapEx—or T is obviously pretty modest—but then there's also some recurring maintenance CapEx that will naturally come through.

Speaker #9: So I'm just thinking about, like, what's the reluctance to reset your dividend, especially when your dividend yield is, like, a low five and your marginal debt cost is higher?

Speaker #9: So, shareholders are now funding a dividend with debt at a higher cost. So, which is, in theory, all else equal, dilutive.

Speaker #9: So I'm just wondering what your what what's the reluctance to just reset it a bit lower and to , to bring in , you know , that recurring CapEx profile into the equation .

Speaker #2: Yeah . Thanks , Clare . Look , I think as I kind of responded to , Tom , you know , we have an intent here to have a payout ratio range to accommodate some portfolio change as much as anything .

Mark Scatena: Thanks, Claire. Look, I think, as I responded to Tom, we have an intent here to have a payout ratio range to accommodate some portfolio change as much as anything. That repurposing activity will contribute to that this year. Clearly, we have some divestment cycling that is also a headwind in 2027. As I mentioned to Tom, we expect FFO growth on a unit basis. Clearly the contributions from repurposing will manifest more fully through 2027 to 2028. Yeah, Claire, I suppose we think about this over the medium term and we do not really have any intent to reset the payout ratio. As I said, we have a guide. Of course, we would aim over time to ensure that the dividend is covered with free funds.

Speaker #2: And that repurposing activity will contribute to that this year. Clearly, we have some divestment cycling that is also a headwind in '27.

Speaker #2: So , you know , as I mentioned to Tom , we expect FFO growth on a unit basis And clearly the contributions from repurposing will will manifest more fully through 2017 to 28 .

Speaker #2: So yeah , I suppose we think about this over the medium term and we don't really have any intent to , to , to reset the payout ratio .

Speaker #2: And , you know , as I said , we have a guide . And of course , we would aim over time to ensure that the dividend is covered with , with free funds .

Speaker #9: Okay . And then just as you're just on the CapEx question , I know you don't disclose AFFO , but you know , what sort of a run rate , you know , on that , you kind of give a bit of color on , but just what sort of a run rate are you spending on ?

Claire McHugh: Okay. Then just on the CapEx question, I know you do not disclose AFFO, but what sort of a run rate on TIs that you give a bit of color on, but just what sort of a run rate are you spending on recurring structural CapEx? Things like, obviously your lease is a net lease, but it is not everything. On some of the structural repairs that you still have ownership of, what sort of a run rate is that at? I think it was AUD 4 or AUD 5 million or so.

Claire McKew: Okay. Then just on the CapEx question, I know you do not disclose AFFO, but what sort of a run rate on TIs that you give a bit of color on, but just what sort of a run rate are you spending on recurring structural CapEx? Things like, obviously your lease is a net lease, but it is not everything. On some of the structural repairs that you still have ownership of, what sort of a run rate is that at? I think it was AUD 4 or AUD 5 million or so.

Speaker #9: You know , recurring structural CapEx ? So things like obviously leases and net lease , but it's not everything . So on some of the structural repairs that you still have ownership of , what sort of a run rate is that at ?

Speaker #9: I think it was , of , you know , 4 or 5 million or so .

Speaker #2: Do you want to take that one or I'll take that . So so yes , we we would say kind of within that CapEx range that we'd be spending somewhere between probably 10 to 20 and probably around $15 million on recurrent spend .

Mark Scatena: Dave, do you want to take that one or Claire, I will take that. Claire, yes. We would say within that CapEx range, that we would be spending somewhere between probably AUD 10 to AUD 20 and probably around AUD 15 million on recurrent spend.

Speaker #7: Yeah .

Claire McHugh: Yeah. Okay, thanks.

Claire McKew: Yeah. Okay, thanks.

Speaker #9: Okay . Thanks

Speaker #1: Thank you. There are no further questions at this time. I'll now hand back to Mark Scatena for any closing remarks.

Operator 2: Thank you. There are no further questions at this time. I will now hand back to Mark Scatena for any closing remarks.

Operator: Thank you. There are no further questions at this time. I will now hand back to Mark Scatena for any closing remarks.

Speaker #2: Thank you very much , everyone , and I appreciate everyone joining us . We look forward to speaking to you over the coming days , seeing many of you in the week of the 7th of September , and encourage anyone on the call who was in Perth to attend our first AGM for many , many years on the 29th of October , which I think is a Thursday .

Mark Scatena: Thank you very much everyone, and I appreciate everyone joining us. We look forward to speaking to you over the coming days, seeing many of you in the week of 7 September, and encourage anyone on the call who is in Perth to attend our first AGM for many, many years, on 29 October, which I think is a Thursday. So we would be delighted to welcome you to the AGM. Have a lovely day. Thank you.

Speaker #2: So we'd be delighted to welcome you to the AGM. Have a lovely day. Thank you.

Operator 2: That does conclude our conference for today. Thank you for participating. You may now disconnect.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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