BWP Trust (ASX: BWP) has executed an unconditional contract to sell the Chadstone Homeplus Homemaker Centre in Victoria for $86.025 million, representing a 1.1% premium to the property’s fair value of $85.1 million as at 31 December 2025. The sale to a wholly owned subsidiary of Centuria Capital Group demonstrates BWP’s ability to exit assets above book value in current market conditions.
The transaction is scheduled to settle in June 2026, with proceeds to be applied initially to reduce drawn debt. The extended settlement timeline preserves BWP’s distribution guidance for FY2026, providing income-focused investors with continued visibility on returns whilst the trust strengthens its balance sheet position.
The divestment follows a public sales campaign that attracted compelling offers from several national investors. This competitive interest reflects both the quality of the underlying asset and BWP’s success in enhancing the property’s investment characteristics through active lease management prior to sale.
Asset management delivers 15.21% internal rate of return since acquisition
The Chadstone sale demonstrates BWP’s value creation capability through strategic asset management. The trust acquired the property in 2024 as part of the $72.5 million Newmark portfolio acquisition, and has since secured a Bunnings lease extension to 31 July 2030 that enhanced the asset’s appeal to potential buyers.
The sale price of $86.025 million represents a realised internal rate of return of 15.21% since acquisition. This performance metric captures both rental income received and capital appreciation achieved during BWP’s ownership period.
| Metric | Value |
|---|---|
| Original acquisition price (2024) | $72.5 million |
| Sale price (2026) | $86.025 million |
| Realised IRR | 15.21% |
| Bunnings lease extended to | 31 July 2030 |
The transaction illustrates how BWP extracts value through active lease management before divestment, a capability that can be applied across the broader portfolio. By securing the Bunnings lease extension prior to marketing the property, management improved both the weighted average lease expiry profile and the attractiveness to institutional buyers seeking secure income streams.
What is weighted average lease expiry and why does it matter?
Weighted average lease expiry (WALE) measures the average time remaining across all leases in a property or portfolio, weighted by the rental income each lease generates. A longer WALE indicates more secure future income and typically commands higher valuations from investors.
When BWP extended the Bunnings lease at Chadstone to July 2030, it increased the property’s WALE and reduced near-term re-leasing risk for any potential buyer. Properties with longer remaining lease terms require less active management and carry lower vacancy risk, making them more valuable in the market.
For REIT investors, a trust’s ability to proactively extend leases before asset sales signals strong tenant relationships and effective asset management. This capability translates to better exit prices and higher returns on invested capital.
Portfolio renewal strategy in action
Managing Director Mark Scatena positioned the divestment as part of BWP’s strategic focus on portfolio renewal, emphasising the trust’s ability to actively enhance asset values before selling.
Management Commentary
“The transaction demonstrates BWP’s ability to leverage its asset management capability by extending the property’s weighted average lease expiry to maximise asset value,” said Mark Scatena, Managing Director.
The sale process, which attracted several national investors, validates both the property’s quality and BWP’s strategic timing. By undertaking an extensive review following the Bunnings lease extension, management was able to test market appetite at what it deemed an optimal point in the asset’s lifecycle.
This approach contrasts with passive portfolio management strategies where assets are held indefinitely regardless of relative value or strategic fit. BWP’s willingness to divest properties that have achieved their value creation potential allows capital to be recycled into opportunities with stronger growth prospects.
The competitive tension generated during the sales campaign resulted in the 1.1% premium to book value, demonstrating that active portfolio management can deliver tangible value outcomes even in uncertain market conditions.
FY2026 distribution guidance maintained
The extended settlement timeline to June 2026 ensures the Chadstone property continues to contribute rental income throughout most of the current financial year. Key aspects of the transaction structure include:
- Settlement: June 2026
- Proceeds application: Debt reduction
- FY2026 distribution guidance: Maintained
The decision to apply sale proceeds to reduce drawn debt improves BWP’s balance sheet flexibility whilst preserving the trust’s capacity to fund future growth opportunities. Lower debt levels also reduce financing costs and provide a buffer against potential interest rate movements.
For income-focused investors, the maintained distribution guidance removes uncertainty around near-term returns. The trust’s ability to execute portfolio renewal activities without compromising distributions demonstrates financial discipline and effective capital management.
What comes next for BWP
Following announcement of the Chadstone Homeplus property sale, the trust’s immediate priorities centre on completing the transaction and deploying proceeds strategically:
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Settlement completion in June 2026 with transfer of ownership to Centuria Capital Group subsidiary
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Debt reduction using sale proceeds to strengthen balance sheet position
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Ongoing portfolio review to identify further renewal opportunities
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Continued active management of remaining Bunnings-anchored properties to maximise tenant retention and lease extension opportunities
The transaction reinforces BWP’s active approach to portfolio management, where assets are continuously assessed for their strategic fit and value creation potential. Investors can expect management to maintain this disciplined approach to capital allocation, divesting properties that have achieved their objectives whilst identifying new opportunities aligned with the trust’s core Bunnings-focused strategy.
The trust’s ability to achieve a premium to book value in the current real estate environment demonstrates that quality retail properties with secure tenant covenants remain attractive to institutional buyers seeking stable income streams.
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