This article is from the Australian Property Journal archive
IN the face of ongoing global turbulence, Mirvac Group (ASX: MGR) has reaffirmed its guidance for growth in FY22, thanks to steady sales activity, managing construction delays and supply chain risks, and locking in trade costs across its $29 billion pipeline.
In its 3Q22 operational update, Mirvac has reported 2,332 residential sales in the FYTD and 518 over the quarter, with pre-sale increasing to around $1.6 billion from $1.0 billion in 3Q21 FYTD.
1,645 residential lots were settled over the year, with 342 throughout the quarter, with more 2,500 lots expected to settle in FY22.
247 leasing deals were completed across circa 75,600sqm in the group’s Integrated Investment Portfolio (IIP), which also maintained its high occupancy at 97.1%, up from 97% in 1H22.
“Mirvac’s integrated and diversified model continued to deliver strong results over the third quarter of FY22, despite headwinds from the ongoing impacts of COVID-19 and extreme wet weather across the east coast of Australia in March,” said Susan Lloyd-Hurwitz, CEO and managing director of Mirvac.
The IIP’s cash collection improved to 94%, up from 92% in 1H22 and down only marginally from 3Q21’s 95%.
Cash collection increased across all sectors for the quarter, with office at 98% from 97% in 1H22, industrial at 100% from 99% and retail at 87% from 78%.
The portfolio’s WALE was largely maintained at 5.5 years, compared to 5.6 years at the previous quarter and in 3Q21.
“The quarter saw solid sales activity across our residential masterplanned communities business, further progress across our commercial and mixed use development pipeline, and a pick up in the recovery in operating conditions as markets re-open. Cash collections continue to improve, and we expect this to gather pace in the fourth quarter, buoyed by the reopening of domestic and international borders,” said Lloyd-Hurwitz.
In the group’s circa $29 billion development pipeline, the 80 Ann Street project in Brisbane is now around 97% pre-committed and the not yet underway Aspect Kemps Creek is 63% pre-committed, while the recently commenced $277 million Switchyard development in Auburn is 40% pre-committed.
“We have managed construction delays and supply chain risks, with trade costs associated with 100% of development projects for FY22 and 75% for FY23 are already locked in. Progress across our ~$29bn development pipeline included the commencement of construction at Switchyard Industrial Estate in Sydney, nearing practical completion at 80 Ann Street, Brisbane, and the successful launch of three new apartment projects,” added Lloyd-Hurwitz.
For FY22, Mirvac reaffirmed its operating EPS guidance of at least 15.0cpss, which represents an increase of at least 7.1% in earnings and a distribution guidance of 10.2cpss, representing DPS growth of 3%.
“Our experience, scale, and internal integrated design and construction capability, combined with a forward-planning approach, continues to be a key competitive advantage in the execution of our pipeline, creating value and growth for our securityholders over the coming years,” concluded Lloyd-Hurwitz.
