Mirvac lifts profit, ups specialty sales

BirkenheadpointRetail landlord, Mirvac Group, has posted a lift in profit on the back of record residential sales volume.

The property developer’s profit rose 13 per cent in the year to June 30 compared to the previous corresponding period to $1.16 billion, driven by an improved values in its investment portfolio, particularly in Sydney and Melbourne, and stronger operational earnings.

Revenue from its core activities in property development and management decreased slightly to the previous year at $2.275 billion. The company made $2.32 billion in 2016.

Total revenue including the revaluation is $3.02 billion, down from $3.05 billion last year. Its share price rose 5¢ to close at $2.30 on Thursday.

Mirvac stated it expects its earnings growth to continue despite serious concerns about housing affordability in parts of the country.

Its operating earnings before interest and tax were up 17 per cent and it expects earnings to be six to eight per cent higher in 2017/2018, driven by yield from its investment portfolio, rental growth and returns from its development pipeline.

Within its retail portfolio, Mirvac achieved total sales productivity of $10,048 per square metre, in line with its target. It also increased specialty sales productivity to $9,864 per square metre.

During the period, Mirvac completed the $19m Flinders Gallery development at Birkenhead Point centre in Sydney.

The property firm has also entered an agreement with Payce Consolidated to acquire an interest in the proposed South Village Shopping Centre in Kirrawee, NSW.

Mirvac’s residential business delivered $302 million in earnings, an increase of 54 per cent, due to a record volume of lot settlements and gross margins above its target range.

The company’s office and industrial division contributed $319 million in earnings, down roughly 11 per cent as a result of asset sales made in the previous financial year, while retail delivered $156 million in earnings, up 33 per cent.

Mirvac shares gained five cents, or 2.2 per cent, to $2.30.

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