BWP Trust (BWP) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for holding, and welcome to the BWP Trust 2023 Full Year Results 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 so at this time. I would now like to hand the call over to Managing Director of BWP Trust, Mr. Michael Wedgwood.

Good morning, everyone, and thanks for dialing into our full year results webcast. Before we start, I'd like to acknowledge that this meeting is being held on the Traditional Lands of the Whadjuk people of the Noongar Nation. I'd like to pay my respects to Elders past, present and emerging. BWP trust acknowledges the traditional owners of country throughout Australia. We've released to the ASX this morning our full year results announcement, our 2023 annual report and the presentation slides, which we'll go through now before we take questions at the end. Andrew Ross, our Head of Property; and David Hawkins, our Head of Finance, are also here on the call and will be available to answer any specific questions at the end of the presentation. So we start on Slide 6, which is the full year results at a glance and that summarizes some of the outcomes from the last 12 months. Total income for the year ended 30 June 2023 was $158 million, about 3% ahead of the prior comparable period. Portfolio rental growth represented the majority of that increase with income from completed developments during the year and losses of income from vacancies, while properties are being repositioned pretty much offsetting each other for the year. Distributable profit for the full year was about $114 million, slightly below the prior corresponding period. Included approximately $3.9 million in capital profits compared to $2.8 million in the previous corresponding period. During the year, we had higher management fees payable because our valuations were high throughout the year and adjusted at year-end. That and higher funding -- debt funding costs were the main contributors as to why the capital profits released was a bit higher during the year. Full year distribution, $0.1829 per unit, is in line with the prior corresponding period. NTA reduced about 3% from the prior corresponding period and that's reflecting -- or mainly reflecting changes in property valuations at year-end, which we'll talk more about. The Trust property portfolio generated 5% like-for-like rental growth on an annualized basis and that was as a result of increased quarterly CPI over the 12-month period and the fact that about half of our leases are CPI-linked and the other half are fixed. Portfolio cap rate increased at 30th of June 2023 to 5.38%, and that was up from 5.05% at December and a similar level at 30th of June 2022. So that resulted in a $77 million decrease in our property -- our portfolio valuation at year-end. Portfolio of WALE at year-end was 3.5 years. That's slightly lower than what it was at the half. And when as we normally comment on that, we are there because of our portfolio, a lot of the properties are in option periods with Bunnings, or some are getting towards the end of their first term. So you just, by definition, you end up in this place. And we don't believe it in itself reflects the underlying risk in the portfolio because of the structure of typical Bunnings leases. 10 market rent reviews were completed during the year and talk a little bit more about those -- 9 of them were Bunnings Warehouse properties. There were 3 options on Bunnings Warehouse properties exercised for the year at Balcatta, Artarmon and Belrose. At the year-end, there's 73 properties in the portfolio and about 97% occupancy. Gearing was about 16% and cost of debt at 30th of June, about 4%. At year-end, our hedge cover is about 57%. And we have put in some hedging in the last 6 months and we're continuing to watch that. But at the moment, there's no benefit for us putting in more hedging, given where swap rates are at. If we turn now to Slide 7, and I won't go through this in a lot of detail. I think it's all on the slide. We don't have Scope 1 emissions. We reported Net Zero Scope 2 emissions. And we're actually just in the process now of finalizing our Scope 3 emissions inventory and when that's finalized, we'll talk more about that. We're continuing to buy green energy where appropriate and also to install more solar on our properties and also improve the energy efficiency of lighting on our properties and where appropriate, replacing our air conditioning as well. So that's putting us in a fairly good position when it comes to emissions, given that most emissions are for the account of our tenants. If we now turn to Slide 9, and I won't really talk to Slide 9, 10 or 11, which just summarize our financials. We can take specific questions. The only comment I'd make is our other expenses relative to last year are up a bit and that's mainly due to increased land tax. There wasn't really anything else that was driving that increase in cost. So if we now turn to Slide 13. And on that slide, you can see that we've shown our like-for-like rental growth of 5%, which is quite a bit higher than it's been for a number of years, as you can see at the bottom of that chart and that really reflects the inflation that's flowed through on a number of our leases during the year. On Slide 14, we show the outcomes of the 9 Bunnings market rent reviews that were finalized during the period. The overall outcome of those reviews was a 2% increase. For Hawthorn, Coburg, Pakenham, Caroline Springs and Frankston, all those market rent reviews were all determined by independent valuers. The others were negotiated based on the available market evidence for each of those properties. As we've said a number of times, I mean we don't look at individual property outcomes as an indicator of where the whole portfolio is at. As it has been for a while, we think the portfolio rent is fairly close to market and we get variations with individual stores. But overall, it's fairly consistent. On Slide 15, we've just shown the breakdown of our lease covenants. 85% of our rent comes from the Wesfarmers Group, and that's obviously mainly Bunnings, but also Officeworks. 3% is from the Commonwealth and Queensland governments with the Commonwealth government has rented our Morley property and our Wollongong property and the Queensland government is renting our Cairns property. And the -- although, pretty much the rest of the rent comes from national retailers and some automotive groups and one of the storage business. There's only a very small percentage of rent that's from other than national businesses. On Slide 16, as we've shown for a number of years, we have again shown the cap rate trends. And as we said at the half year, there hasn't been any transactions in the first 6 months, and it was the same in the second 6 months. So there was new -- no new, I guess, evidence to show on that slide. Bunnings Collingwood did transact in July 2023. And as far as we're aware the actual details of that sale still haven't been disclosed. So we're not 100% sure where that -- so that property, I guess, had some specific attributes of serving in a city. So it has quite good zoning for longer-term redevelopment, but Bunnings does have a number of years of options on that property. So probably could be expected to be there for a while, but we expect that it traded on a fairly tight cap rate. Slide 17 is a slide regarding our June 2023 property revaluations. And I've already mentioned the cap rate movement. There were 12 independent valuations as part of that process and 61 internal valuations. Cap rates on 2 properties tightened, cap rates on 65 of the properties increased and cap rates on 6 properties stayed the same. Of the properties that increased, I mean, generally, they were between 25 basis points and 100 basis points increases. And typically, regional properties showed more cap rate expansion in a number of our metro properties. The 2 properties where the cap rates tightened were Hervey Bay, which we're in the process of repositioning that property. And so that was independently valued. So the independent valuation took that into account. Now the CapEx hasn't yet been spent on that property. And the other one was Joondalup, which has just had an option exercised on that property. On Slide 18, we've actually shown the results of the independent valuations and you can see the movements in cap rates on that slide and that's sort of indicative of what's happened across the rest of the portfolio. And I mean, we can talk more about this in the questions if necessary. But I guess, in that time when there's not a lot of new market evidence, the valuers have obviously taken into account the increased cost of funding for buyers. And any other evidence that they may have as where buyers' expectations are at, but we're comfortable where the portfolio valuation is for the moment, based on the information that's been taken into account. If we now turn to Slide 20, we just show on that slide, I guess, what we consider our core properties in the portfolio at the moment. And generally, what's not in the area in properties that are being repositioned or what we know Bunnings is about to vacate the property. On Slide 21, as we normally do, we show the lease expiry profile for the core portfolio. And as it's been coming for a few years, there is a couple of years when there are a number of expiries coming up. And as we've explained before, they're linked to historical portfolio acquisition. So you get a number in the same period. And again, we don't view current lease expiries as being a good indicator of risk. It's very much based on individual properties and what's going on with the individual properties. So on Slide 22 and 23, we have shown the core properties that are coming to the end of our current lease in the next 3 years. We're not aware of any pending vacancies on that list that we haven't otherwise already disclosed. We have shown those properties that are getting to the end of their first term and will be entering their first option. And we've also shown the properties, which will be starting their second option. So on average, Bunnings typically stays at a property a lot longer than the initial term and generally longer than the first or second term or certainly, that's sort of what we've experienced over time. So I guess, at the moment, given some of those properties are still a way off getting to the point where Bunnings needs to indicate what it's doing, we're as confident as we can be about Bunnings ongoing occupancy at those properties. On Slide 24, 25 and 26, we've just again included the details of stores being upgraded. We have shown those details previously, so I'm not going to go back through them unless you can ask questions. Coburg is expected to be completed this month. Lismore construction is underway and will be completed early in 2024, and we would expect Dubbo to be completed in late 2024. That would be construction matters and stuff. I think a builder has been appointed but construction hasn't yet started. So if we then go to Slide 28, and that's our current, I guess, list of properties that we're working through where Bunnings is all either vacated or given some indication that it may vacate at the end of the current lease term. For Port Kennedy, we've -- we have now have a development approval to reposition that as a large-format center and pre-leasing of that property is underway. We do have some tenants signed up, but we're still working on a few more before we commit to the CapEx on that property. Belmont North, we're looking at a few things on that property at the moment. So that's -- I mean, it's got good zoning and we're just working through what's the best outcome for that property. Hervey Bay, we do have development approval for a large-format center. We've got that property 100% pre-committed. And we're just finalizing the construction costs at the moment and expect to appoint a builder hopefully this month. Noarlunga is new to the list. That's Bunnings property in Adelaide. Bunnings has very recently advised the intention not to exercise any further options in that property and it's going to relocate to another property nearby. So the current lease expires in September '24. With -- I mean, we're just in the initial processes at the moment of working out what the best use of that property is. It has a quite flexible zoning. I mean it's been quite a strong or quite a -- this -- it's got a strong, I guess, commercial area. So we're just working through what we'll do with that property. Albany is leased to Bunnings until October next year, and it's -- I mean Bunnings has actually moved out, but they put Tool Kit Depot in there for the moment. So we're still working at what we'll do with that property longer term. Fountain Gate, Bunnings current lease is until February 2025. They are looking to build a new store in the same precinct. Fountain Gate property is one of our original properties and probably one of the better located properties in our portfolio. It's the opposite the Westfield shopping center at Fountain Gate has very good visibility, very good access and very flexible zoning, allowing mixed-use development. So -- and as an area and as a commercial area, it's evolved a lot in the recent years. So we're going through a master planning process at the moment before we decide exactly what we do with that property. And that's on the assumption that Bunnings will move at the end of its current lease. Northland, that's leased to Bunnings until August 2025. On that property, again, very well located. We are looking at medium- and longer-term uses for that property, which could include, hopefully, at some point, a change in zoning. So we're just continuing to work through that to work out what the best outcome. Wagga is leased to Bunnings until March 2026. We're aware Bunnings has another site. But as far as we're aware, they haven't started construction on that site. But from our point of view, with our property, that part of Wagga is a pretty strong commercial area. Wagga is very robust regional city. So we would expect to get a fairly good solution on that property, and we're just sort of working away on that until we understand exactly what Bunnings is going to do. The one property that's not on that slide anymore, it was on half year is Wollongong. We've actually leased that property for 5 years to the Commonwealth government, which has been a great outcome because it hasn't required any capital expenditure from our or any required capital expenditure for us. That's an incredibly well-located property. Just very on the outskirts of the CBD and Wollongong has good zoning. So we're looking at the longer term for that property at the moment. And that -- as part of that, we're looking to lodge a DA for mixed-use development on that site. And we are actually also running expressions of interest campaign in the market at the moment for a potential sale of that property if it makes commercial sense. So we're sort of looking at all outcomes for that property because it is one that we think has great potential, either under BWP's ownership or some of those ownership if this value is right from our perspective. Slide 30, we just show our current debt facilities in Slide 31. We just show the debt maturity profile graphically. I've talked about hedging upfront. We feel comfortable with our hedging at the moment. So if there's any other questions on that, we'll take them at the end. So the last slide is the outlook slide on Slide 33. I mean, from a rent point of view, we feel like we're positioned pretty well at the moment. We, as I said earlier, 85% of our rent from Wesfarmers and 3% from governments and 11% from all very substantial national businesses. So operationally, we think the portfolio is in good shape. While there hasn't been any -- or not certainly not very many Bunnings transactions, certainly from what we understand, there's still underlying demand for Bunnings properties if they come up for sale. So even though there's certainly more movement in some other property sectors, we're still fairly comfortable that there is -- continues to be underlying demand for Bunnings properties. So I think that will continue to support the underlying valuations of them over time, we believe. We've shown on that slide, the rent reviews coming up this year. As it has been for a little while, our primary focus is really on our existing properties and that is filling vacancies, progressing upgrades where we can, extending leases and obviously doing the market rent reviews as they come up. And as it has been for a while, that still has been where we can create more value than we have been able to, by buying properties on at times pretty tight yields. But that being said, we're continuing to look for properties that we think we can create value from. And I'd say we're sort of in the very early stages of starting to see some more interesting opportunities starting to look like they're coming to market. So hopefully, we will see more of that this financial year. So to finish this slide in terms of our distribution for 2024, I mean unless there's something major happens in the economy outside of our control, we do expect the distribution to be similar to what we've paid this year and we can use capital profits, if necessary to support that distribution. So that's all on presentation. So I'll hand back to the call organizer, and we'll take whatever questions that you have.

[Operator Instructions] First question comes from Lou with Jarden.

A few questions from me, if I may. I mean, just your -- in your outlook statement, you kind of said that Trust will be active in assessment actioning any opportunities to grow the portfolio, slightly different language from previously. Can you just talk about? Do you feel that with cap rates moving up that there will be or there could be more opportunities now than maybe a year ago or 2 years ago?

Well, Lou, thanks for the question, and Andrew can comment on this as well. I mean, I think -- I mean, we were certainly in a period when the I think the weight of money was sort of driving outcomes. And I mean it's still, I guess, a bit hard to get a very clear read on what will happen in the near-term future. But I mean, we're just starting to see a bit more risk priced into a few things that you're seeing coming to market. And I guess the comments are made off the back of that saying, well, I guess, when that starts to happen, we may see some other better opportunities than we've seen for a while. But Andrew, you comment on that as well.

Yes. So Lou, we are seeing some opportunities and BWP is looking at a couple just at the moment. And so, yes, I guess, the focus is on seeing whether or not we can acquire some properties and the ones we're looking at are joining our current Bunnings-owned properties. So it kind of just makes sense for us to have a serious consideration for those opportunities.

And then if I can follow up on Page 14 with your market rent reviews. There's quite a few in the plus 10, minus 10 mark, which I imagine is linked to your caps and collars on the -- so I just want to get some sense of if there weren't those caps and collars, if the increases and declines would have been significantly different.

Yes, they were. And Lou, if you have a look at the footnotes that I've put down on the bottom of the table, you'll see the Coburg determination came in at a 13.4% increase in the passing rent. And so that was capped to 10%. The Pakenham market rent reviews independently determined that close to 22% increase in the rent. And so that was capped at 10%. And similarly, at Caroline Springs, it was close to 14%, where it was capped by the 10%.

Sorry, I didn't see that footnote actually. So apologies for that. And then final question from me. Just on the timing of your 3 current vacancies. Are you currently expecting any rent from these in the next 12 to 24 months or not?

So Port Kennedy, look, we think it will probably take up to 12 months for us to develop that site. So it's closer to 12 to 15 months for no rent. Belmont North, yes, look, we haven't found a way forward on that one just yet. So I don't think it will be in the next 12 months. But just I'm sure we're looking at all our options there, Lou. And one of those options is re-leasing the existing property as it is. So if we were to redevelop it, the time period of getting rent is going to be longer, but if we can release it right now and we just closed a leasing campaign on that one, and we're considering our options there. So we may lease the existing building in the next month or 2 or we may not. The third one, Hervey Bay. So we've reached an agreement in principle around moving forward with that one. We've got DA. It's probably going to come online mid-2024.

Your next question comes from Simon Chan with Morgan Stanley.

Michael, the first question I've got for you. In the outlook slide, I noticed there are a few unresolved market rent reviews, which is fine, but there's 2 from FY '22. Can you talk a bit about what's holding those up because it's an awfully long time to be still in negotiations?

It's Andrew here. I'll jump in there. What we tend to do is we follow the market rent review sequentially in date order. And those 2, we have not progressed because their results are a function of previously agreed or previously determined numbers. So Frankston, which we resolved in this half, talks to and provide evidence for the market rent review at Scoresby. And similarly, the Caroline Springs results assist with working out the value for Craigieburn. So Craigieburn and Scoresby are the 2 long-dated ones. And we are in advanced discussions with Bunnings on Scoresby, which could result in a negotiated outcome. The Craigieburn has been sent to determination. So that will be completed in this half.

The other question I got, just how should we think about your average cost of debt for FY '24? You've given us some hedging numbers there. My back of the envelope suggests about 4.3%, 4.4%. Would that be close to what you guys have in your budget?

That's based on the current spot rates, Simon, that's probably pretty close to where you think things will go once again, it's all subject to where the markets go to price in the next couple of months.

And the final question I've got, it's a relation question on noncore assets or what you call alternate use. It looks like you guys have been making pretty good progress. Michael, you talked about Hervey Bay, pretty much just needed a point to build there in Port Kennedy, got an approval. What's the end game there for this bucket of assets? Is it developed to hold so that becomes a core asset again? Or ultimately, you guys will look to just turf these assets once construction contracts are locked in, tenants are locked in, et cetera?

Yes, Simon. Look, I mean, I guess, it always depends. I mean, there are some pretty good properties on that list. And I guess, we're sort of at a point where we don't really want to sell any property unless it makes really good commercial sense to do so. So if there's something like Hervey Bay, once it's done, that would be very salable. But equally, it's actually going to be quite a strong large-format center, which we probably want to keep in the portfolio. So I think the way we approach it when we are aware that our properties need to be repositioned, I mean, we tend to look at various options about what -- what's the best use and what we can actually do in that location. But it does often include -- we asked the question of whether we either should be selling it now or after repositioning or just to keep it. So yes, look, long-winded answer to your question. I think most of those properties, we prefer to keep them in the portfolio will depend for some of them what is the ultimate end use and whether that still fits within the BWP portfolio. But yes, on average, we'd probably like to keep most of them.

Your next question comes from Tom Bodor with UBS.

Michael, I just had a question about the Bunnings upgrades. The leases there seem to be on the 3 that you've got in the presentation around your CPI but capped to 2.5%. Is that going to be your standard new lease going forward? Do you think we're spending money? Or is it sort of down to the asset?

Yes. Tom, no, I think your second comment was the correct one in that it's very much, I guess, on a site-by-site basis. And from our point of view, take things into account, I guess, the value outcome relative to what the other options were or are -- if we don't upgrade the store and Bunnings chooses to leave. But certainly, in our minds, those outcomes on those properties were very specific to those properties. So they don't -- at this point, that doesn't reflect what we think would happen across the rest of the portfolio.

Also just a question around the Bunnings rollout of the Tool Kit Depot. Is that something you expect to sort of see on some of your sites to be complementary with the Bunnings offering? Or is it pretty separate to the Bunnings strategy?

Yes. Look, I mean, we've certainly -- well, as I mentioned, they are currently in one of our properties out in WA. But we certainly do talk to them on other properties, particularly those that sort of have a Bunnings and some other large-format retail space. So -- and from time to time, we have discussed on some locations, whether that could be included with the Bunnings on a location. So again, I wouldn't say it's -- yes, certainly, it's not something that we would expect a major rollout of, but there certainly will be some locations where I think it would be of interest to -- for Bunnings to potentially co-locate one or both of those brands with its Bunnings store.

And just a final one. The capital profits to support the distribution, like how comfortable are you, like how far would you be prepared to sort of do that? Is there a limit where at some point, you're sort of less comfortable? Or is it something you're just trying to get that distribution flat sort of for the foreseeable future?

Yes. Look, I think the way to sort of answer the question is, I mean, we're always modeling forward. Well, we have owned a rolling sort of 5-year forecast and that sort of guides us in terms of a lot of decisions we're making because typically, with property, you need to have a slightly longer time frame. Otherwise, you're not going to see what's -- what the impacts are going to be. And we're comfortable with that strategy at the moment, looking forward, and it's really based on what goes on in the portfolio during the year. But you do get a lot of movement even in our portfolio, you're getting a lot of movement during the year based on the timing of upgrades and timing of repositioning so that because they affect the -- or each one can affect the rental income by $2 million or $3 million. So it's sort of -- it is quite variable during the year, but we are comfortable continuing to do that as required.

So is it fair to say you would aim to not be sort of consistently doing it, say, over your 5-year period or you'd at least aim to get back to not requiring it at the end of your forecast window?

Yes. I mean we're -- well, I mean, certainly, our portfolio rent, I mean, as you saw in the slides, I mean that's growing. And at the moment, I guess we're in this period where our valuations remain high, so therefore, our management fee remains high. And at the same time, we're in a rising or have been in a rising interest rate environment. So it's sort of -- I guess, it's been some specific circumstances in this last year that have resulted in a bit more capital profit being required. But I guess we wouldn't necessarily expect the same situation going forward in that regard, the rest of it. Yes, the rest of it is really timing of a store or property repositioning through that affected.

And yes, all the best for the next chapter in your journey.

Yes. Thanks very much, Tom.

Your next question comes from Richard Jones with JPMorgan.

Michael, I want to reiterate all the well wishes for you moving forward.

Thank you.

Yes, good. Thanks for the comments on the CPI reviews and I understand your answer to Tom's question, but just interested, I guess, in whether a 2.5% cap on CPI reviews is something that you'll do moving forward?

Well, I guess -- I mean, there's 2 aspects of that. I mean one, I mean, at the moment, and typically, a new Bunnings property is sold with those lease terms in place. So that's sort of Bunnings current standard, if you like. So if you're wanting to buy a new property, you really have to buy it with those terms in place. Now, the Bunnings lease terms do evolve over time, depending on what they see the issues they want to deal with. But in terms of the rest of our portfolio, I mean, typically, we're looking to retain the lease terms that we currently have. So that remains our preference. And as I said earlier, with those properties, the details are on the slide. They are very specific sort of outcomes for those properties. And I mean, 2 of them are regional properties. So we were looking at what was the best outcome for those very specific properties in doing an upgrade. And we were for those properties, prepared to do it on those terms because we -- overall, we thought that was the better outcome at those properties. But it's certainly not our preference to change our lease terms to those sort of terms.

Maybe you can clarify why you did it with Coburg? It was a nominal amount that you spent yet you still put the cap in on the new lease, which seems much more advantageous for the tenant than you guys?

Yes. Yes, look, on that one, there wasn't -- I think it was just, I guess, part of the overall agreement on that property. I mean, even though that one is obviously a metro property. Yes, it was just the circumstances at the time. And again, it did make sense to do it on that basis for that property.

Okay. Can you clarify how many of the CPI reviews have this 2.5% cap in them now?

Do you know that one, Andrew?

I don't think we call out another one in there.

No.

These are the first 3.

Richard, we haven't purchased a property with it in the lease. So these are the only ones we've done, the rest are uncapped CPI or 3% fixed.

Other than Hawthorn that's got a 7% cap on the CPI.

Yes.

And then just if I look at the market rent reviews, the independent valuer results were much stronger than the negotiated ones. So Coburg, Pakenham, Caroline Springs, all up 10%, Frankston up 6%, Hawthorn, down 2%. But if we look at the agreed ones, you've got Wagga, flat, Dubbo, down 10%, Geraldton, down 3% and Greenacre, down 3%. Just interested in your thoughts on the significant disparity between those?

Yes. Well, with the independent, so with the ones that went to determination, we felt the rents were much stronger than the 10%. So that's why we've taken it to determination. In relation to the negotiated ones, we didn't have that level of confidence and it was a potential that they could have gone below what we actually agreed. So we looked at the risk of that, looked at the evidence and felt that we should negotiate outcomes.

So 3 of those 4 that you mentioned, Richard, are regional stores and Greenacre was probably a function of the starting rent. Was it Andrew?

Yes, correct.

So even in metro areas, they can have different starting rents and then whatever else is going on around, then you can get that adjustment at the market rent review and Pakenham is probably was an example of that were started at a relatively lower starting rent. So there was a catch-up.

Your next question comes from Edward Day with Moelis Australia.

Michael, congratulations on the retirement. Just a couple of quick ones for me. Just on your lease expiry profile, obviously, FY '26 and '27 step up a little bit. Can you just run through the mechanisms of those options? And firstly, are there market rent reviews associated with all of those expiries? And within the lease, is there any scope for the terms of the lease to change in that extended option period?

To the last point, no. No, they're all existing leases. So the lease terms stay the same. They all have a market rent review at the end of the current period. Some of those properties coming up have a 10-year option and that was like a historical transaction that was done a number of years ago with Bunnings where there was a lease extension at the time and a 10-year option added on a number of properties. So there's quite a few -- I mean, some of those have already started coming up like Balcatta in WA has just had a 10-year option exercised and first Southport on the Gold Coast. And you can see on those 2 tables, which ones relate to that. But yes, no, they're all coming to the end of the current lease term, and they've all got options, either 10- or 5-year options and they're all, I think, require a market rent review. Yes. Yes. They do. I mean sometimes on newer leases, you -- well, on Bunnings current lease terms, they have -- tend to have a market rent review every 12 years, but they have options every 6 years. So that is a change in their standard lease terms. But I think we don't have any of those coming up here now.

The one thing that I would add is that the properties that have got 10-year options like Southport, Tuggeranong, Cannon Hill, another one in Mile End and Morayfield, they have a market rent review on the exercise of the option, but they also have a market rent review in 5 years' time mid that option period.

And then just with works to be done at some of those repositioning assets. Are you able to give an indication of the CapEx you're planning on deploying in FY '24?

Yes, we're just getting to that slide to talk through that.

So Port Kennedy could be up to $15 million. Hervey Bay, maybe around $20 million. That's probably only 2 for FY '24 at this stage. The rest will be in FY '25 or later. And we haven't reached a way forward on each of those. So I'd be reluctant to give you any sort of numbers on that. Thanks.

Thank you. There are no further questions at this time. I'll now hand back to Michael Wedgwood for closing remarks.

Okay. Thank you. Thanks, everybody, for participating in the call. I think we've seem to have been very early in the cycle this year. There seems to be a bit of a gap until the next report. But thanks for participating in the call. And obviously, if there's any follow-up questions, we're happy to for you to call and we'll deal with them if you have them. So other than that, I hope the rest of the reporting season goes well for everybody. So we'll end the call on that note.

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