t Limited, resetting and extending the Bunnings lease portfolio and committing a collective $86 million for store expansion network upgrades.  According to independent expert Deloitte Corporate Finance, the proposal is fair and reasonable and in the best interests of unitholders not associated with Wesfarmers. Under the proposal, BWP would pay $142.6 million to Wesfarmers to internalise BWP Management, the Wesfarmers-owned entity that has overseen the trust since its 1998 listing. The shift would bring BWP in line with a growing number of Australian real estate investment trusts (REITs) that have adopted internal management models in recent years.  According to a 2013 study by Jamie Yong and Abhay Singh from Edith Cowan University, presented at the Pacific Rim Real Estate Society Conference, internally managed REITs tend to have greater control over their operations and engage in a wider set of activities, which may lead to better alignment between management and unitholder interests. According to BWP, the move aims to “reduce long-term operating costs, unlock strategic flexibility and become independently governed,” shifting from an externally managed model to one led by its own board and management team.  This model may foster stronger alignment between REIT management and investor interests, enabling clearer governance and more agile decision-making. By internalising key functions, BWP can reduce conflicts of interest and respond more effectively to market and shareholder needs, enhancing transparency and long-term value creation. Lease extensions signal confidence in Bunnings The proposal would also see BWP reset and extend 62 Bunnings leases, significantly boosting the portfolio’s average lease length from an estimated 4.4 years to 8 years, and Bunnings-specific leases from 4.6 to 9.5 years. The new terms include multiple long option periods and regular market rent reviews capped at 10 per cent. This longer lease certainty is expected to increase property values, with an estimated uplift of nearly $50 million due to improved capitalisation rates. These changes reinforce the trust’s long-standing relationship with its cornerstone tenant, which accounts for the vast majority of rental income. The move marks a significant vote of confidence in big-box retail and the strength of the Bunnings format. Of the capital upgrades investment across the portfolio, $56 million would be directed toward expansions at five Bunnings stores, which would be rentalised at premium rates. BWP and Bunnings have each committed to fund $15 million, totalling $30 million, to refurbish ageing stores, with that investment not subject to rental uplift. The investment aligns with broader post-Covid trends in retail property, where modernisation and experience-led formats are key to performance and asset longevity. The upgrades also reflect a viable strategy that enhances long-term returns while deepening collaboration with Bunnings. A growing trend BWP’s move to internalise management reflects a growing trend among retail landlords seeking greater control and agility in a dynamic market.  Zelman Ainsworth from Ainsworth Property told Inside Retail this strategy is both smart and timely.  “We’re seeing a real resurgence in investor interest, particularly in large-format retail. Vacancy rates are sitting below 2 per cent in most metro areas, and there’s a clear shortage of quality space,” he said. “Retailers are competing hard for good locations, and there’s been a noticeable uptick in planning applications for large format retail refurbishments and redevelopments over the past 12 to 18 months,” he added.  Ainsworth noted that this shift signals a broader realisation among landlords about the benefits of tighter portfolio control. “With market sentiment strong and institutional buyers circling again, now’s the time to reposition, remix and reinvest. We’re seeing groups like HomeCo and Haben do just that – and BWP is now in a better position to follow suit.” He added that gaining independence from Wesfarmers offers BWP valuable flexibility to evolve its retail centres in new ways.  “Whether that’s intensifying sites, improving amenity, or introducing new uses like wellness, childcare or last-mile logistics alongside retail. All in all, it’s a timely move that aligns well with the market’s current direction.” Wesfarmers stays close, but in a new role While BWP would be stepping away from Wesfarmers’ formal oversight if shareholders approve its proposal on July 28, ties between the two entities would remain intact.  BWP and Wesfarmers have signed a five-year cooperation and services agreement to govern their transitional relationship and Wesfarmers’ holding in BWP will increase from 22.3 per cent to 23.5 per cent as part of the proposed transaction. A transitional collaborative advisory and services agreement (CASA) will facilitate knowledge transfer and continuity. Wesfarmers will also retain the right to nominate a director to the BWP board, provided it holds at least a 15 per cent stake. According to BWP Trust’s June 27 presentation, the relationship is “positive and collaborative”, with both parties aligned in the shared interest of maintaining Bunnings’ performance across the trust’s portfolio. The road ahead for BWP In an ASX announcement, Tony Howarth, BWP Trust chair, stated, “For the past 27 years BWP has remained committed to its original investment proposition by focusing on well-located, geographically-diverse large format retail properties with long-term leases to quality tenants.  “This quality portfolio, with rent underpinned by Bunnings, has ensured that BWP investors have enjoyed since listing a secure, growing income stream and capital growth.” With a refreshed governance model, extended Bunnings leases and a multimillion-dollar investment pipeline, BWP is doubling down on its core strengths while future-proofing its portfolio in an evolving physical retail landscape.