Mirvac Calls Market Bottom, Moves on Build to Rent
Mirvac chief executive Susan Lloyd Hurwitz has called the housing market bottom at the company’s annual general meeting in Brisbane on Tuesday.
Lloyd-Hurwitz said the group expects the increase in residential enquiries to translate into sales in “due course”.
“We are now seeing clear signs of a housing market recovery, including an uptick in auction market activity, prices and turnover in the established market,” Lloyd-Hurwitz said.
Mirvac has already secured 86 per cent of its 2020 fiscal year earnings, leaving it well-positioned to take advantage of the housing market upswing.
“[We have] used the cycle to our advantage by capitalising on opportunities to restock our portfolio at the right time and in the right location,” Lloyd-Hurtwitz said.
Mirvac flagged plans to transform a 171-hectare former quarry into a 1700-lot housing estate in Melbourne’s east in June. The developer will partner with Boral, which currently owns a quarry and brickworks plant on the Wantirna South site 25-kilometres from Melbourne’s CBD.
Other projects in the works include a 350-lot estate in Milperra in Western Sydney along with a partnership with the Western Sydney University to redevelop its campus into a sustainable community.
The continued strength of the ASX-listed group’s $15 billion office and industrial business buffered its residential losses, growing it into the country’s second largest office manager.
“We saw a 26 per cent increase in operating EBIT during the 12 months, a 12 per cent increasing in net operating income and development earnings of $125 million,” Lloyd-Hurwitz said.
Mirvac currently has a $3.1 billion active office pipeline, including 80 Ann Street in Brisbane, the $1 billion Locomotive Workshops in South Eveleigh and the Olderfleet tower in Melbourne.
The developer is favoured to win the over-station Waterloo Quarter development project, on which it is bidding with joint venture partner John Holland.
Lloyd-Hurwitz said that Mirvac is also focused on further developing its build-to-rent pipeline over the next year.
The group’s first build-to-rent asset in Sydney Olympic Park will is due to complete in September next year, while it confirmed plans for a second built-to-rent project at the Queen Victoria Market in Melbourne.
Other institutional interest in the build-to-rent sector includes QSuper, which acquired a multifamily development in Washington DC, and Macquarie and Greystar’s plan to roll-out build-to-rent in the Asia Pacific region.
Last month, NAB pledged $2 billion in funding to support housing outside of the mainstream market including the provision of crisis accommodation, sustainable housing projects and build-to-rent.
