Mirvac affirms guidance amid sluggish retail spending

Broadway shopping centreMirvac has reaffirmed its earnings guidance despite experiencing below average retail sales growth across its shopping centre portfolio in the third quarter.

In an operational update provided to the market for the third quarter of fiscal 18 yesterday the landlord said it was confident that full year earnings would be between 15.3 and 15.6 cents per stapled security.

Moving annual turnover in its retail centres increased by 3.5 per cent during the quarter, below long-term averages, while comparable specialty sales growth was 4.5 per cent.

“In a challenging and rapidly changing retail environment, our results demonstrate that not all retail is created equal. Our exposure to affluent and densely populated urban areas, with deep employment, will support a continued solid performance in a subdued market,” Mirvac chief executive and managing director Susan Lloyd-Hurwitz said.

Mirvac’s occupancy rate was 99.3 per cent at the end of the quarter, down 0.1 per cent from the end of December.

Occupancy costs increased slightly to 15.5 per cent during the quarter, within which 58 leasing deals across around 15,700 square meters were finalized – leasing spreads were positive.

Category by category mini-majors booked the strongest comparable moving annual turnover growth, up 7.2 per cent.

Contraction in the other retail category worsened from its 3 per cent decline in the first half, down 8 per cent.

Discount department stores saw comparable moving annual turnover growth of 5.6 per cent, up from the first-half rate, while specialty stores weakened slightly, up 4.5 per cent.

By specialty category food retail was flat and leisure fell into decline, with comparable moving annual turnover growth down 2.1 per cent.

Mobile phones and food catering booked the strongest growth, up 10.5 per cent and 11 per cent; respectively.

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