This article is from the Australian Property Journal archive
MIRVAC flew past its residential settlements target and recorded its highest sales numbers in the 2021 financial year, but its operating profit dipped by 9% to $550 million, while it is backing the vaccine targets to be met and underpin business conditions.
The developer also saw statutory profit surge 61% to $901 million, driven by revaluation gains, while funds from operations fell from $610 million to $565 million.
Earnings per security of 14.0c came in ahead of its guidance of 13.7c per stapled security.
Total distributions of $390 million represented a 9% increase in distributions per security to 9.9c.
“While FY21 has been characterised by extended lockdowns and restrictions, vaccine supply is improving and vaccine coverage is increasing daily. I am confident this, along with other mechanisms such as a vaccine passport and Rapid Antigen Testing, will enable Australia to open up again safely, providing a pathway towards recovery in FY22,” CEO and managing director, Susan Lloyd-Hurwitz said.
Mirvac provided operating earnings per security guidance of at least 15.0 cpss for FY22, an increase of at least 7.1%, and distribution guidance of 10.2 cpss, providing growth of 3%.
“Our full-year guidance is based on the assumption that business conditions will normalise in the last quarter of CY21 when vaccination targets are expected to be met.”
Mirvac’s 3,375 residential sales during the year was its highest residential sales result since FY16, while settlements of 2,526 lots comfortably exceeding guidance of about 2,200 lots.
“Our commitment to being shovel ready, and the depth and diversity of our development pipeline, meant we were able to release product in response to heightened demand,” Lloyd-Hurwitz said.
Its residential division recorded operating EBIT of $168 million, down by 25% driven by a greater contribution from master-planned community projects in FY21, compared to FY20 which benefited from record level apartment settlements.
Flagship projects launched during the year included Quay at Waterfront, Brisbane (71% pre-sold), Green Square, Sydney (52%), and George’s Cove, Sydney (93% of released lots sold).
The residential pipeline was extended to $15.7 billion with 26,569 lots. New acquisitions were made at Waverley, Sydney, and Smiths Lane and 699 Park Street, Melbourne.
Consolidated division delivers
It launched what it called the “integrated investment portfolio”, a new division consolidating its office, industrial, retail and build-to-rent teams. Investment property revaluations provided an uplift of $274 million, driven by strong demand for
industrial property – which saw a 13.1% net increase – and long WALE office assets, up by 3.8% net.
Assets under management increased to $25 billion, leading to a 7% increase in asset and funds management earnings of $30 million. The portfolio saw some 144,000 sqm leased across 342 deals, and an occupancy of 97.4% and weighted average lease expiry of 5.6 years. The cash collection rate was 98%.
Its first build-to-rent project, LIV Indigo at Sydney Olympic Park, which is 80% leased, and extended the build-to-rent pipeline to about 1,860 apartments, with an estimated end value of $1.4 billion.
Mirvac has been a leader in the nation’s fledgling built-to-rent sector, also having projects at Melbourne’s Queen Victoria Market and in its CBD and in the northern suburb of Brunswick, as well as in Brisbane’s Newstead.
The group’s development pipeline increases to $28 billion across mixed use, office, industrial, residential and build to rent, offering future value and optionality.
“The value generated by our commercial pipeline continues to accelerate, with the group recognising profit from our Olderfleet, 477 Collins Street, Melbourne, South Eveleigh, Sydney and 80 Ann Street, Brisbane developments throughout the year,” Lloyd-Hurwitz said.
Mirvac and co-owner M&G Real Estate announced yesterday the signing of KPMG Australia to its 80 Ann Street building in the Brisbane CBD. The firm has committed to over 6,600 sqm across three levels of the tower, which will be tech-savvy and 100% carbon neutral in operation once complete.
Mirvac’s operating cashflow was up 41% to $635 million. It maintained liquidity of $867 million in cash and committed undrawn bank facilities.
