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“Not all retail assets are created equal”

Broadway shopping centreProperty firm Mirvac has posted a 2.5 per cent increase in earnings before interest and tax to $83 million in its half-year update.

Total sales productivity grew to $10,149 per square metre, and comparable specialty sales productivity increased to $10,034 per square metre, up from $9,864 on 30 June 2017.

Comparable moving annual turnover sales growth of 3.7 per cent and comparable specialty sales growth of 5.2 per cent.

“Our portfolio of urban assets continues to deliver solid performance in all key metrics, demonstrating the resilience of the right retail in the right markets,” said Susan MacDonald, Mirvac’s head of retail.

“70 per cent of our portfolio is now weighted to inner urban markets in the key cities on the east coast.”

Mirvac recorded foot traffic growth of 3.1 per cent on comparable centres during the half.

MacDonald said despite retail headwinds, the outlook remained positive for their assets.

“It has been another active period for the Mirvac retail business,” she said.

“Our portfolio of urban assets continues to deliver solid performance in all key metrics, demonstrating the resilience of the right retail in the right markets.

“In a rapidly changing retail landscape, our belief remains that not all retail assets are created equal.

“It is our view there will be a growing divergence in asset performance based on the fundamentals of markets and management. This has seen us introduce over 170 new retail brands to the portfolio in the past 18 months through strategic remixing and disciplined development.”

MacDonald said the property firm’s urban focus has continued with the acquisition of both East Village and South Village.

“Our developments are characterised by our unique ability to deliver small increases in area, but significant changes to the retail offer and centre positioning; the new premium precinct at Birkenhead Point, which we completed during the period, is a good example of this.”

During the half, Mirvac also 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 
completed the $19 million redevelopment of Birkenhead Point Outlet Centre, introducing a new premium precinct which includes Bally, Coach, Harrolds, Michael Kors and Peters of Kensington. The development was 100 per cent pre-leased on completion.

“We also have development plans across our national portfolio that will see centres including Kawana Shoppingworld, Toombul Shopping Centre and Cherrybrook Village further enhanced for their communities,” said MacDonald.

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