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Landlord’s specialty retailers resilient despite ‘challenging conditions’

Mirvac-owned Birkhenhead Point centre was fully-leased upon completion of its $19 million redevelopment

Property group Mirvac’s half-year profit has fallen eight per cent to $465 million, due to lower gains on revaluation of its property investment portfolio and the timing of residential lot settlements.

Revenue for the six months to December 31 slid 28 per cent to $984 million, and the company declared an unfranked final dividend of 5.0 cents per share, up from 4.9 cents a year ago.

Chief executive Susan Lloyd-Hurwitz says she remains confident the company will be able to deliver its full-year guidance for operating earnings growth of between six and eight per cent.

Mirvac’s retail portfolio remains strong, with occupancy levels maintained at 99.4 per cent, with total sales productivity growing to $10,149 per square metre, and comparable specialty sales productivity increased to $10,034 per square metre, up from $9,864 at 30 June 2017.

Comparable moving annual turnover sales growth of 3.7 per cent and comparable specialty sales growth of 5.2 per cent was recorded by the retail landlord.

During the period, increased its ownership in East Village, Zetland and the proposed South Village Shopping Centre, Kirrawee to 100 per cent in Sydney and completed the sale of a 50 per cent interest in Kawana Shoppingworld on the Sunshine Coast, QLD to ISPT for a total consideration of $186 million, based on a capitalisation rate of 5.50 per cent; and

“While conditions in the retail sector remain challenging, our urban focus, along with a high exposure to health, tourism and education markets, and a focus on experience-based retailers, ensures our portfolio remains relevant and resilient,” said Lloyd-Hurwitz.

“The strategic positioning of our portfolio is reflected in the strong metrics we’ve maintained in the first-half of the year; our specialty sales growth of 5.2 per cent, for example, is well ahead of our peers.”

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