Mirvac Re-fill Pot for New Investments
Mirvac announced this week that it was undertaking an $750M equity raising to support the delivery of the next generation of office, industrial, residential and mixed-use projects, to repay debt and replenish funding for its existing development pipeline, including;
Office: 383 La Trobe (MEL), 55 Pitt Street (SYD) and 75 George Street (PAR). Target unlevered IRR >12%
Industrial: Elizabeth Enterprise (SYD) and Kemps Creek (SYD). Target unlevered IRR >12%
Mixed-use & build to rent: Harbourside (SYD). Target unlevered IRR >14%. Sydney Olympic Park BTR (SYD). Target unlevered IRR >8%
Mirvac have also suggest that they are well advanced on multiple identified acquisitions with an estimated end value >$2 billion.
The $750 million fully underwritten institutional is at a fixed price of $2.97 per new Mirvac Security representing a 4.2% discount to the closing price of $3.10 per Mirvac Security on 28 May 2019. As part of the proceeds will be used initially to repay debt, the pro-forma gearing will decline to circa 19% and the pro-forma NTA expected to increase $0.03 to $2.47.
Mirvac also took the opportunity to update the market that despite the cooling of the housing markets, they expect to deliver the FY19 earnings of 17.1 cents per stapled security, representing growth of 4 per cent on FY18, being at the upper end of their previous guidance.
Mirvac's share price has performed well over the past 5 months compared to the rest of the AREIT index due to the diversified nature of their portfolio. They are currently up 38% over the past 12 months, compared to 11.9% for the index.
MGR Trading Chart vs ASX200 AREIT Blue - MGR, Purple ASX200 AREIT Last 12 months