As we covered here earlier, one ASX 200 real estate stock is falling heavily today following the release of its full year results.
The good news is that not all real estate stocks are tumbling. One is even outperforming the ASX 200 today after investors responded positively to its results.
That company is BWP Trust (ASX: BWP), which is the largest owner of Bunnings Warehouse properties in Australia.
Its shares are up 2.5% to $3.62 in afternoon trade.
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ASX 200 real estate stock higher on strong results
- Revenue up 10.3% to $174.5 million
- Profit before fair value movements up 5% to $119.3 million
- Profit up 391% to $180.2 million
- Total dividends flat at 18.29 cents per share
What happened in FY 2024?
Let's firstly address the elephant in the room. How did BWP deliver a 10.3% increase in revenue to $174.5 million but a 391% jump in profit to $180.2 million?
Well, the latter includes gains in fair value of investment properties and derivatives of $61 million for the year. Whereas a year earlier, BWP recorded losses in fair value of $76.9 million.
Going back to the ASX 200 real estate stock's revenue for FY 2024. It rose 10.3% thanks partly to like-for-like rental growth of 4.2%. This was supported by the NPR, Broadmeadows Homemaker Centre, and Southport Showrooms acquisitions.
FY 2025 looks set to also get a big boost from acquisitions. In June, BWP completed its $540 million all-scrip acquisition of Newmark Property REIT. Management notes that the deal provides the company with nine high quality properties. It also provides a platform for income and capital growth, consistent with BWP's objective of providing unitholders with a secure and growing income stream and long-term capital growth.
Speaking of income, BWP kept its dividends flat at 18.29 cents per share in FY 2024. However, its shares have already traded ex-dividend for its final payout. It will be paid to eligible shareholders at the end of the month.
Outlook
Management appears cautiously optimistic on its prospects in FY 2025. It said:
The quality of the Group's property investment portfolio, with its large, prominently located sites, with good accessibility and adjacency to other retail and community facilities, means that these are expected to continue to be preferred locations for retailing or provide potential longer-term alternative uses.
In this context, BWP remains well positioned with rental income comprising largely the Wesfarmers Group (82 per cent), other national large format retail, automotive and self-storage businesses (15 per cent) and Commonwealth and Queensland Governments (one per cent).
The ASX 200 real estate stock also advised shareholders to expect a small dividend increase in FY 2025.
Subject to no major disruption of the Australian economy or material change in market conditions, BWP expects to increase its dividend by 2% year on year.
