What makes a rent cheque dependable: a long lease, a strong tenant, or many small ones? BWP Group and Waypoint REIT offer contrasting answers, and both leaned on Lease renewals in their latest results to show it.

BWP Group (ASX:BWP) collects about 67 per cent of its rent from Bunnings, part of Wesfarmers. Waypoint REIT (ASX:WPR) collects 94.1 per cent from fuel retailer Viva Energy. For both S&P/ASX 200 trusts, rental security depends less on property markets than on one tenant's commitment to its sites, which is why lease terms, renewal outcomes and Debt settings matter so much.

Two landlords, two anchor tenants

BWP is a stapled group, combining units in BWP Trust with shares in BWP Property Group Ltd, and completed the internalisation of its management in August 2025. It owns large format retail property, mostly standalone Bunnings Warehouse stores, and valued its 80 properties at $3,961.8 million at 30 June 2026.

Waypoint is also stapled, combining Waypoint REIT Limited and Waypoint REIT Trust, and is led by managing director Hadyn Stephens. It owns fuel and convenience sites: 394 properties valued at $2,862.7 million at 30 June 2026, with 343 leased to Viva Energy.

The two use different financial years. BWP reports to 30 June, while Waypoint's financial year matches the calendar year, so its latest numbers cover the half-year to 30 June 2026.

BWP's reset year lengthened its leases

BWP released its FY26 results on 19 August 2026. Funds from operations (FFO), a measure of underlying Earnings that excludes revaluations, rose 4.5 per cent to $140.9 million, or 19.29 cents per security, up 2.1 per cent. Distributions totalled 19.41 cents, up 4.1 per cent, and statutory net profit was $408.4 million, helped by a $257.0 million valuation increase.

The key rental-security change was lease length. According to the investor briefing presentation, 62 Bunnings leases were extended or reset during FY26, lifting weighted average lease expiry (WALE), the average time remaining on leases weighted by income, to 7.3 years from 4.5 years.

National tenants provide 96.3 per cent of income, occupancy was 98.4 per cent and like-for-like rent grew 3.0 per cent. Rent reviews were 52 per cent fixed, 43 per cent CPI-linked and 5 per cent market reviews. Where BWP re-leased non-Bunnings large format tenancies, 14 deals achieved average spreads of 23.6 per cent.

Net tangible assets (NTA), Book Value per security after debt, rose to $4.11. Gearing, debt as a share of total tangible assets, fell to 18.5 per cent from 21.6 per cent. During the year BWP bought HomeCentre Morayfield for $48.0 million and Sunbury Lifestyle Centre for $25.2 million, and sold assets including Morley, Port Kennedy and Chadstone.

Waypoint's renewals and the 2027 test

Waypoint released its 1H26 results presentation on 27 August 2026. Distributable earnings were 8.59 cents per security, up 3.4 per cent, and distributions were 8.50 cents. Statutory net profit, which includes valuation movements, was $65.8 million, compared with $137.1 million a year earlier.

Occupancy was 99.9 per cent by income, WALE was 5.9 years and the weighted average rent review was 3.0 per cent, assuming 3 per cent inflation. Most leases are triple-net, meaning the tenant pays outgoings such as rates, insurance and maintenance.

Renewals are Waypoint's main evidence of rental security. Of 28 leases expiring in 2026, representing about 4 per cent of rent, Options were exercised or terms extended on 26, a 97.2 per cent retention rate by passing rent, with rents on renewal 10.3 per cent higher.

The next test is larger: 33 fuel and convenience leases, about 7 per cent of income, expire in 2027. They include 28 original leases from the 2016 IPO, due in August 2027, for which a landlord-initiated process was to commence shortly.

NTA was $2.92, gearing was 32.4 per cent and 90 per cent of debt was hedged. In June 2026 Waypoint issued $250 million of six-year medium-term notes, extending its weighted average debt Maturity to 3.8 years. Guidance for calendar 2026 is distributable earnings of 17.14 cents, up 3.0 per cent, with a 100 per cent payout, and Waypoint has declared a September-quarter distribution of 4.32 cents, payable on 30 November 2026.

Big boxes versus many forecourts

Concentration looks different once portfolio granularity is considered. By our calculation, BWP's average property is worth about $49.5 million ($3,961.8m ÷ 80), while Waypoint's is about $7.3 million ($2,862.7m ÷ 394).

That means a single vacancy hurts BWP far more, but Waypoint's exposure to one operator is higher. Both portfolios' income relies on one customer's long-term view of physical stores: hardware and home improvement for Bunnings, fuel and convenience for Viva.

On book value, by our calculation BWP's FY26 distribution equals 4.7 per cent of NTA (19.41c ÷ $4.11), while Waypoint's calendar 2026 guidance equals 5.9 per cent (17.14c ÷ $2.92). The gap matches the valuation yields: weighted average Capitalisation rates of 5.25 per cent for BWP and 5.71 per cent for Waypoint.

Risks that could undermine rental security

For Waypoint, its presentation cites scenarios in which electric vehicles make up 14 to 35 per cent of the fleet by 2035, alongside declining tobacco sales. Both could change how Viva values individual sites at renewal.

For BWP, FY27 distribution guidance of 20.00 cents implies a payout of about 104 per cent of FFO, which management said is supported by recent profits on sale. Profits on sale are not recurring income, so sustaining that payout depends on further disposals or FFO growth.

Interest costs matter too. BWP's weighted average cost of debt rose to 4.6 per cent with 59.3 per cent hedged, and it has $300 million of debt maturing in FY28. Waypoint's cost was 4.7 per cent, with a weighted average hedge maturity of 2.5 years.

Internalisation has narrowed a cost gap. BWP's management expense ratio, annual operating costs as a share of assets, fell to 0.34 per cent from 0.66 per cent, close to Waypoint's annualised 0.31 per cent.

Dates and data to watch

BWP holds its Annual General Meeting on 29 October 2026 in Perth. For Waypoint, outcomes of the August 2027 IPO lease process will be the clearest signal of Viva's commitment.

Both remain S&P/ASX 200 members, according to iShares IOZ holdings dated 24 September 2026.