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Mirvac Q3 Update - On track with Resi Conditions Improving

October 22, 2019

 

Mirvac released their 3rd Quarter operational update with signs that the business is performing well in the current climate. 

 

Residential

Mirvac believe ave passed the bottom of the residential cycle with clear signs of improvement in the Sydney and Melbourne established housing markets with lifts in loan approvals consistent with the upturn in auction market activity, prices and turnover.

 

Mirvac’s CEO and Managing Director, Susan LloydHurwitz, said "we have seen an uptick in enquiries, and we expect this to translate to sales volumes in due course." 

 

Mirvac settled 613 residential lots last quarter and on track to achieve over 2,500 settlements for FY20. Defaults remain below 2 per cent

 

Office & Industrial

In the Office & Industrial markets, favourable market conditions and the sustained demand for high quality space in the Sydney and Melbourne CBDs and fringe locations has driven occupancy higher. Office occupancy lifted to 98.4 per cent (98.2 per cent at 30 June 2019) and industrial occupancy hit 99.7 per cent 5 with a WALE of 7.5 years

 

The Sydney and Melbourne markets continue to show positive fundamentals, including population growth, low unemployment and record levels of infrastructure spend. Mirvac's preference for young, low capex, smart, efficient assets, strategically located in Sydney and Melbourne, continues to drive value for securityholders.

 

Retail

In the Retail sector, Mirvac's centres recorded solid comparable moving annual turnover sales growth of 2.6 per cent and comparable specialty sales growth of 2.0 per cent. The business is watching the gen Ys and Zs who by 2024, will overtake baby-boomers and gen Xs in numbers to become the most dominant group in the country. The newer generations spend move in very different ways to previous generations.

 

Outlook

Mirvac has re-affirmed operating EPS guidance of between 17.6 to 17.8 cpss for FY20, which represents an increase in earnings of between 3 to 4 per cent, and distribution guidance of 12.2 cpss, which represents DPS growth of 5 per cent.

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