Units in listed property investment vehicle, BWP Trust (ASX: BWP), drifted mostly sideways on Wednesday following the release of its full year results.
In the year to 30 June 2015, BWP reported a 13.7% increase in income, to $144.9 million, and a final distribution of 8.17 cents per unit, up 4% over last year's final payment. The final distribution takes the full year payment to 15.84 cents, up 7.7% year-over-year.
In addition to a healthy income and distribution result, BWP achieved a number of operational goals, including:
- The divestment of six non-core properties
- Acquisition of the Australind Bunnings Warehouse development site and newly constructed store
- Development of four Bunnings stores
- 20 market rent reviews, with an average 8.2% increase in annual rents
- Achieved like-for-like rental growth of 2.6%
- Replaced and extended all bank facilities, and reduced unused bank facilities by $45 million
- Lowered the average cost of debt
- Extended lease expiry to 6.6 years, with 100% occupancy
- Achieved a revaluation gain on the property portfolio of $108.5 million
- Increased net tangible assets to $2.24 per share, up 8.2%; and
- Reported gearing of 24.1% at June 30, down from 24.4% a year earlier
BWP said slow global growth and low official interest rates continued to drive demand for prime real estate – evident from its non-cash $108.5 million revaluation gain. However, the higher prices of real estate "may limit portfolio growth", the company said.
A lower inflationary environment also lessens BWP's ability to increase rental income since 58% of rents will be adjusted at the Consumer Price Index (CPI) throughout the year to 30 June 2016. A further 7% of rents will be subject to a rent review this year, while the remaining 35% are subject to fixed increases of 3% to 4%.
All else being equal, BWP said the Trust could expect the distribution per unit to be up approximately 5% in the coming year.
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