A Quick look on Mirvac’ s quarterly report for 3Q FY2019

  • Apr 30, 2019 AEST
  • Team Kalkine
A Quick look on Mirvac’ s quarterly report for 3Q FY2019

Real Estate company Mirvac Group (ASX: MGR) today provided an operational update for the quarter ended 31 March 2019, i.e. 3Q FY2019.

The Group has completed ~78,500 square metres3 of office leasing activity as at the end of the quarter with the positive leasing spreads of 14.3%. The company’s investment portfolio has outperformed during the year on the back of favourable office market conditions, thereby enabling the company to remain on track to deliver on its full-year earnings and distribution guidance.

CEO & Managing Director of Mirvac, Susan Lloyd Hurwitz, said “Mirvac’s office business continues to show significant strength. The company’s high exposure to Sydney and Melbourne has placed it to capitalise on the buoyant office markets’ rising rents and the lowest vacancy rates for three decades.”

Mirvac holds an active office development of $3.1 billion, of which 90% is pre-committed as per the company’s information. Further, the occupancy stood at 97.9% during the quarter with a WALE of 6.5 years.

The Industrial division of the company witnessed a sustained demand in Sydney while maintaining the occupancy at high-levels, i.e., 99.7% with a WALE of 7.8 years. The leasing activity of about 81,700 square metres was completed as at the end of the March 2019 quarter.

The Group has achieved comparable specialty sales growth of 2.6% and solid comparable moving annual turnover sales growth of 2.3% in the retail division.

The management advised that the company aims to offer the right retail in the right market so that it could meet the evolving trends among consumers and investors, driving growth in the value of the portfolio.

During the quarter Mirvac also progressed its asset management initiatives including continued construction works at Toombul, Brisbane, at Orion Springfield Central, QLD as well as at Birkenhead Point, NSW. It has also executed 286 leasing deals across  ~43,300 square metres, with leasing spreads remaining positive.

Ms Lloyd Hurwitz said that the diversified business model of the company and its asset creation capability had enabled the company to sustain the high-quality recurring earnings in the time of down trending housing market.

Mirvac further maintained a high level of residential pre-sales at $2.0 billion with 1,290 residential lots settled as at 31 March 2019 in line to achieve the target of over 2,500 settlements for FY19.

Ms Lloyd-Hurwitz commented looking forward, the group’s residential earnings in Fiscal 2020 are anticipated to benefit from substantial apartment project completions, namely The Eastbourne, St Leonards Square and Marrick & Co.

The company expects to achieve 3% to 4% growth in Fiscal 2019’s earnings.

MGR stock price declined by 1.049% to last trade at $2.830 on 30 April 2019. The price to earnings multiple stood at 8.310x with a market capitalisation of $10.46 billion.

Over the past 12 months, the stock has witnessed a positive price change of 27.68% including an upsurge of 19.17% in the past three months.


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