This article is from the Australian Property Journal archive
OVER the first quarter of the 2024 financial year, Mirvac (ASX: MGR) has continued to disposed assets, while its investment portfolio boasted strong occupancy and leasing activity despite subdued residential sales activity.
The first quarter saw Mirvac’s office portfolio occupancy reduced to 94.7%, with a WALE of 5.6-years, with 11,488sqm of NLA leased across 17 deals with a gross re-leasing spread of +4.1%.
At the same time, the industrial portfolio maintained high occupancy at 98.8% and a WALE of 6.6% with lease expiry of circa 3% over the remainder of the financial year.
In its industrial portfolio, Mirvac achieved gross leasing spreads of +15.9% across 9,754sqm across just two deals.
In the retail portfolio, Mirvac completed 68 leasing deals across 23,258sqm, while maintaining positive gross releasing spreads of +1.0% on renewals but -0.4% across all deals.
The BTR portfolio had a weaker portfolio occupancy of 78.4% across 805 operational apartments but was improved from 71.9% in FY23.
“Our investment portfolio continued to perform well over the first quarter, with high occupancy levels and good leasing activity across all sectors, and the quality enhanced by the completion of Switchyard, non-core asset sales, and increased exposure to living sectors,” said Campbell Hanan, CEO and managing director at Mirvac Group.
“It has been a busy start to the new financial year, with great progress made against our key strategic objectives. This includes executing on our asset disposal program, which supported the entry into a binding contract to jointly acquire the Serenitas land lease platform,”
“The transaction marks a significant first step into land lease communities and expands our residential customer offering in a deeply undersupplied market.
Mirvac progressed its circa $1.2 billion BTR pipeline, as well construction at its Aspect Industrial Estate, Kemps Creek and early works at its Harbourside mixed-use precinct and civil works at 55 Pitt Street, Sydney.
The group released over 490 lots and settled 192 residential sales across the quarter, with defaults low at 0.5%. With pre-sales increasing to circa $1.9 billion.
While also exchanging 262 lots, as owner-occupiers drove demand, alongside 45% upgraders or right-sizers and predominantly domestic buyers at 96%.
“Residential sales activity remained subdued for first-home buyers, however, leads and enquiry levels were elevated, most notably at our newly released apartment projects in Melbourne,” said Hanan.
“Upgrader and downsizers remained the most resilient and we saw a modest pickup in pre-sales to ~$1.9bn. A restricted supply outlook, our pipeline of shovel ready projects, and our strong brand and reputation, position us well to take advantage of the pickup in overseas migration currently underway over time.”
Mirvac has maintained operating EPS guidance of 14.0-14.3cpss and DPS guidance of 10.5cpss for FY24.
