Mirvac Group · ASX:MGR
Mirvac — FY2011 Earnings Presentation
99 slides from Mirvac's earnings presentation, August 2011
Slide 1: By Mirvac
bymirvac Arp y
Slide 2: Contents
contents mirvac group > Two core divisions > Capital position FY11 results research additional information By Mirvac page 1
Slide 3: Mirvac Group
mirvac group 8 Chifley square, sydney, nsw By Mirvac page 2
Slide 4: Mirvac's Vision
MIRVAC’s VISION Sustainable model delivers across business cycles Defensive Active core upside $1.9bn 2 $5.9bn 1 1) By book value, including assets under development and indirect investments. 2) Development Division total inventory, investments and loans in associates and JVs. By Mirvac page 3
Slide 5: Mirvac's Strategy
MIRVAC’s strategy Investment — MPT 80% Development 20% Target average asset unlevered Target average project unlevered IRR of >11% IRR of >18% > Focus on high quality office > Focus on large, masterplanned and retail assets or infill: > Condos > Internal portfolio management: > Land projects > Secto
Slide 6: Mirvac Group
MIRVAC GROUP Founded in 1972, listed in 1987, Stapled in 1999 Office – 57.0% 2 Mirvac Property Trust – MPT retail – 30.2% 2 Invested capital – $5,898m 1 other – 12.8% 3 Condos – 50.7% Residential $1,559m development 82.5% land – 49.3% Invested capital – industrial – 78.3% $1,890m 4 Commercial $331m
Slide 7: Mirvac Group
Si m Su on nH Pr 0 un op 5.0 15.0 10.0 er 35.0 25.0 30.0 20.0 gK ty By Mirvac ai Gr Pr ou Mi op er p ts t ies ub L ish td iE . 2) As at 31 July 2011. 1) As at 30 June 2011. Un sta iba te il - Co We Ro stf da iel m 40.0 Market Cap (US$bn) 2 dG co ro Eq up uit (# yR 5) es ide Pu nt bli ial cS to ra Pr
Slide 8: Two Core Divisions
two core divisions 10–20 Bond Street, Sydney, NSW By Mirvac page 7
Slide 9: Investment – MPT
INVESTMENT – MPT Mirvac’s competitive advantage – integrated model development LEASING & PROPERTY Facilities Investment ACQUISITION capability MARKETING MANAGEMENT MANAGEMENT MANAGEMENT High visibility & income security underpins Group earnings Geographic diversification 4: Invested capital – $5,898
Slide 10: Investment – MPT
investment – MPT High quality office portfolio with current strategic overweight > 88.8% of MPT now Premium or A Grade 1 > 87.3% of FY12 rent review contracts fixed or CPI > Modern portfolio with 58.8% of portfolio under 5 years old > MPT has the 3rd largest A-REIT office portfolio 2 MPT office port
Slide 11: Linking MPT and Development
linking mpt and development Mirvac’s two core divisions have a Mirvac’s history as a commercial developer strong relationship 345 George St, Egis Tower, 45 Clarence St, 40 Miller St, Sydney Chatswood Sydney North Sydney NLA: 21,191 sqm NLA: 15,180 sqm NLA: 32,200 sqm NLA: 12,665 sqm investment — MPT
Slide 12: Mirvac's Development Division
MIRVAC’S DEVELOPMENT DIVISION Mirvac’s competitive advantage in integrated model sales & ACQUISITION design development construction marketing > Local > Specialists in > Project > Control process > Local market relationships product type management > Flexibility knowledge > Knowledge of > Control pr
Slide 13: Mirvac's Development Division: Our Markets
mirvac’s development division Our Markets Sector Description Sub-market Example developments Residential Land subdivision > First home buyers > Small lots in middle and outer > 2nd/3rd home buyers ring locations > Investor > Typical price range: > Housing $375K — $1m > Land $170k – $300k HARCREST pa
Slide 14: Mirvac's Development Division
mirvac’s development division 21,557 lots under control. A variety of capital efficient structures: Wholesale Definition Capital relationships with small number of investors for development, with development delivery by Mirvac provided for fees and share in equity profits relationships Benefits Impr
Slide 15: Development pipeline delivers diversification and visibility
development pipeline delivers diversification and visability Profit recognition profile 1 FY12 FY13 FY14 FY15 FY16 Project Stage Ownership Project status key Settlements have commenced Under construction Active Marketing Planning Under negotiation Commercial projects Currently marketing part share s
Slide 16: Mirvac's Pre-Sales Track Record
MIRVAC’S PRE-SALES TRACK RECORD Historically high level of pre-sales 84.7% of pre-sales contracts were exchanged within one year Pre-sales — Historic 10yr profile Age of pre-sales contracts $1.2bn > 2yrs 2.4% $1.0 1 - 2yrs 12.9% < 1yr 84.7% $0.8 $0.6 $0.4 $0.2 $0.0 FY02 FY03 FY04 FY05 FY06 FY07 FY08
Slide 17: Mirvac's Development Model
MIRVAC’S DEVELOPMENT MODEL > Balanced model of Condos and Land: — The lumpy nature of Condos earnings can be offset by the more stable earnings profile of Land — Land development has shorter lead times and volumes can be accelerated or deferred based on market conditions > Condos average 18 months c
Slide 18: Return to normalised performance by 2014
return to normalised performance by 2014 “On strategy” projects and new acquisitions will deliver improved performance Profile of margin segments $1.4bn Average Margin 18-22% $1.2 Harold Park Hamilton $1.0 Yarra Towers Chatswood, ERA Average Margin 15%-20% $0.8 Jane Brook Gainsborough Greens Forecas
Slide 19: Capital Position
capital position 23 furzer Street, phillip, act By Mirvac page 18
Slide 20: Capital Position
capital position Maintaining a strong capital position > Refinanced $2.1bn in facilities and extended Drawn debt maturity profile 6 debt maturity profile $700m FY11 FY10 1 $600m Balance sheet gearing 2 26.3% 26.8% Covenant gearing 3 39.1% 34.0% $500m Look-through gearing 28.0% 29.1% ICR 4 >4.0x >3.5
Slide 21: Capital Position: Self Funding Model
capital position Mirvac has a self funding model Net Sources Uses of cash of cash FY12 position — Positive forecast — Distribution — Positive cash flow operating cash flow after interest — Maintenance capex — Approximately — Active commercial $200m forecast developments MPT asset sales + Funding Hea
Slide 22: FY11 Results
FY11 results 275 kent st, sydney nsw By Mirvac page 21
Slide 23: FY11 Key Achievements
FY11 key achievements Group > Achieved FY11 operating EPS guidance delivering 13.7% growth > Increased distribution by 2.5% > Refinanced $2.1bn in facilities and extended debt maturity profile Investment Division – MPT > Achieved 4.1% like-for-like NOI growth > Increased occupancy to 98.1% 1 from 97
Slide 24: Financial Highlights
financial highlights 1 FY11 ($m) FY10 ($m) % change Total operating EBIT 2 436.4 293.0 48.9% > Less net interest (92.0) (29.8) 208.7% > Add tax benefit 14.4 14.8 (2.7%) Operating profit attributable to Group securityholders 3 358.5 275.3 30.2% Statutory profit attributable to Group securityholders 1
Slide 25: Group Overhead Costs
group overhead costs Overhead cost reduction is an on-going focus for management Current cost base is scalable FY11 ($m) FY10 ($m) % change Employee benefit expense 1 90.2 111.4 (19.0%) Selling and marketing expenses 1 26.4 15.3 72.5% Other expenses 1 60.2 74.8 (19.5%) Total expense 1 176.8 201.5 (1
Slide 26: Investment Division – MPT
investment division – MPT High quality portfolio with strong performance MPT Achievements FY11 > Delivered 4.1% like-for-like NOI growth > Increased occupancy to 98.1% 1 from 97.6% 1 (FY10) > 2.2% 2 net valuation uplift for FY11 > Improved portfolio quality via $236.8m in disposals of non-core asset
Slide 27: Portfolio Highlights – Office
portfolio highlights – office Strategic office overweight position delivers results > Strong FY11 like-for-like NOI growth of 4.2% > 2.8% 1 net valuation uplift for FY11 > Increased occupancy from 97.5% 2 (FY10) to 97.8% 2 > Leased 7.0% or 41,516sqm of portfolio 3 > 10–20 Bond Street reached 81.0% 4
Slide 28: Portfolio Highlights – Retail
portfolio highlights – retail Non-discretionary focused assets proving resilient Retail category by annualised base rent 6 Food mini majors 3% > Strong FY11 like-for-like NOI growth of 4.3% Food majors 15% Food retail 7% > Increased occupancy to 99.0% 1 from Food catering 12% Non food majors 11% 97.
Slide 29: Development – FY11 Activity
development — fy11 activity Development Division on track for 2014 Target Achievement 1,700 residential lots to settle Delivered 1,724 lots Improve gross margin Increased to 14.2% (FY10: 11.4%) 1 Improve residential development EBIT Achieved a 46.8% increase on FY10 Englobo non-core sales program On
Slide 30: Development Division – FY12 Outlook
development division – FY12 outlook Pre-sales delivers forward visibility and de-risking > Strong position of $980.3m 1 in exchanged pre-sales contracts, a 22.2% increase over FY10 > 55.8% of forecast FY12 development revenue secured by exchanged pre-sales contracts FY12 major development EBIT contr
Slide 31: Summary and Guidance
summary and Guidance artist impression of harold park, nsw By Mirvac page 30
Slide 32: Development Drivers to 2014
development drivers to 2014 Execution forecast to deliver increased ROIC by 2014 FY11 FY12 FY13 FY14 Acquisitions: > Harold Park, NSW Acquisitions of “on strategy” Fast track projects due for completion 10-12% > Eastern Golf Course, VIC projects Non-core asset sales: > Park Precinct Waterfront, QLD
Slide 33: Summary
SUMMARY Overweight office position is delivering results High quality MPT portfolio provides stable performance Development Division leverages commercial expertise Strong pre-sales de-risk future earnings Residential brand expansion captures condo demand Robust capital position Defensive Active core
Slide 34: Guidance
GUIDANCE Guidance FY12 Forecast Group operating profits $360 – $363m 1 Forecast operating EPS 10.5 – 10.6cpss 1 Forecast DPS 8.2 – 8.4cpss Forecast weighted average securities 3,427m 1) Subject to change based on strategic review of hotel division. By Mirvac page 33
Slide 35: Research
research Waterline, Bullimba caption QLD tba By Mirvac page 34
Slide 36: Residential Development – Strategic Positioning
residential development – strategic positioning Expanding Mirvac’s brand into mid price At least 50% of government planning point delivers a larger purchaser base targets are for infill developments Average price of Mirvac’s condos 1 Mirvac’s 39 years of experience in condos 100% captures structural
Slide 37: Trend Towards Multi-Dwellings
trend towards MULTI-DWELLINGS Demand for multi-dwellings has significantly increased Households, dwelling structure, by country of birth and year of arrival 1 Migrant households 2 Year of arrival 1 2003 to 2008 Prior to 2003 Dwelling structure Separate house 46% 76% Semi-detached/row or terrace hous
Slide 38: Australia vs US Home Loan – Market Comparison
Austra lia vs. us home loan – market comparison Australia United States Unemployment ~5% ~10% Non-recourse lending No Yes Variable vs. fixed 85% / 15% 15% / 85% Adjustable rate loans Nil / minimal Widespread Mortgage delinquencies (30+ days) ~1.0% ~3.5% Sub-prime (% of market) 0% ~36% (At Peak – 200
Slide 39: Mirvac Buyer Profile
MIRVAC BUYER PROFILE Mirvac buyer profile Housing finance: market shares Repeat buyer Mirvac’s FY11 settlements Investor 80% > 69.9% upgraders/empty nesters and investors First home buyer 70% > Mirvac average price: 60% — House $689,000 1 50% — Land $245,000 2 40% 30% — Condos $1,758,000 3 20% 10% B
Slide 40: Commercial Property Spread
COMMERCIAL PROPERTY SPREAD The spread between office cap rates and 5yr bonds is 286 basis points; 163 basis points above the long run average. This indicates the prospect for cap rate compression in the Australian office sector. 9.50% 8.00% 6.50% 5.00% 3.50% Current spreads 2.00% 286bps 0.50% -1.00%
Slide 41: Additional Information
ADDITIONAL INFORMATION 23 August 2011 By Mirvac page 40
Slide 42: Contents
contents FINANCIAL RESULTS DEVELOPMENT / continued 42 FY11 STATUTORY TO OPERATING NPAT RECONCILIATION 73 DEVELOPMENT HISTORICAL INFORMATION (FY07–FY11) 43 FY10 STATUTORY TO OPERATING NPAT RECONCILIATION 74 PROVISIONS 44 FY11 OPERATING SEGMENT 75 COMBINING HIGH + LOW DENSITY PROJECTS 45 FY10 OPERATIN
Slide 43: FY11 Statutory to Operating NPAT Reconciliation
FY11 STATUTORY TO OPERATING NPAT RECONCILIATION Investment Hotel Investment MPT Management Management Development Unallocated Elimination Tax Total Year ended 30 June 2011 $m $m $m $m $m $m $m $m Profit/(loss) after tax before NCI 451.6 7.9 (9.8) (262.2) (98.5) (10.0) 103.6 182.6 Less NCI — — — — —
Slide 44: FY10 Statutory to Operating NPAT Reconciliation
FY10 STATUTORY TO OPERATING NPAT RECONCILIATION Investment Hotel Investment MPT Management Management Development Unallocated Elimination Tax Total Year ended 30 June 2010 $m $m $m $m $m $m $m $m Profit/(loss) after tax before NCI 306.4 (10.8) (0.1) 19.6 (81.6) (3.9) 7.8 237.4 Less NCI (1.4) — — — —
Slide 45: FY11 Operating Segment
FY11 OPERATING SEGMENT Investment Hotel Investment MPT Management Management Development Unallocated Elimination Totals Year ended June 2011 $m $m $m $m $m $m $m Revenue Investment properties rental revenue 528.1 — 4.6 — — (3.4) 529.3 Hotel operating revenue — 159.7 — — — (0.2) 159.5 Investment mana
Slide 46: FY10 Operating Segment
FY10 OPERATING SEGMENT Investment Hotel Investment MPT Management Management Development Unallocated Elimination Totals Year ended June 2010 $m $m $m $m $m $m $m Revenue Investment properties rental revenue 400.2 — 7.0 1.0 — (5.0) 403.2 Hotel operating revenue — 146.9 — — — (0.1) 146.8 Investment ma
Slide 47: Finance Costs – Note 5
finance costs – note 5 statutory financial statement FY11 ($m) FY10 ($m) Interest and finance charges paid/payable net of provision release 169.5 110.8 Amount capitalised (88.7) (80.6) Interest capitalised in current and prior periods expensed in this period net of provision release 39.8 25.9 Borrow
Slide 48: MPT Operating Profit
MPT operating profit Detailed breakdown of MPT operating EBIT FY11 ($m) FY10 ($m) Net property income 1 Office 224.5 126.0 Retail 125.9 120.6 Industrial 30.5 26.6 Hotels 1.9 2.1 Carparks 6.8 6.4 Total net property income 389.6 281.7 Investment income 2 26.2 22.9 Other income Other income 2.7 2.9 2.7
Slide 49: FY11 Contributions to Growth
FY11 CONTRIBUTIONS TO GROWTH FY10 to FY11 segmented operating EBIT growth $35.4m ($0.8m) $4.9m $436.4m $107.6m $0.1m ($3.8m) $293.0m FY10 Investment Hotel Investment Development Unallocated Elimination FY11 Management Management FY10 to FY11 segmented operating NPAT growth $0.9m $9.5m ($0.4m) $358.5
Slide 50: Liquidity Profile
liquidity profile As at 30 June 2011 Facility limits ($m) Drawn amount ($m) Available liquidity ($m) Non recourse fund debt $28.0 $28.0 $0.0 CMBS $505.0 $505.0 $0.0 Bank facilities $47.5 $47.5 $0.0 Facilities rolling post June 2012 $2,818.0 $2,297.9 $520.1 Total $3,398.5 $2,878.4 $520.1 Cash on hand
Slide 51: Debt and Hedging Profile
DEBT AND HEDGING PROFILE Hedging and fixed interest profile FY11 Debt sources 1 SYNDICATED LOAN & BANK FACILITIES 59.3% 2,000 $m MTN 17.9% USPP 21.6% 6.29% OTHER 1.2% 1,500 6.06% 5.93% 5.80% 5.86% 1,000 5.71% 5.74% 5.74% 500 0 30 Jun 11 30 Jun 12 30 Jun 13 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30
Slide 52: Investment – MPT
investment – MPT 10-20 bond street, sydney, nsw By Mirvac page 51
Slide 53: Commercial Market Outlook
commercial MARKET OUTLOOK Office Weighting Management The improvement in the labour market and white collar employment in particular has increased the forecast demand for office space. The vacancy rate for office space has fallen, albeit erratically, since the middle 57.0% 1 of 2009, with the prefer
Slide 54: MPT Portfolio Snapshot
MPT portfolio snapshot FY11 FY10 MPT — lease expiry profile by area Properties owned 1 68 77 60% NLA 1,308,850 sqm 1,488,924 sqm 52% Book Value 2 $5,898.0m $5,787.7m 50 WACR 7.55% 7.74% 40 Net property income $389.6m $281.7m Like for like NOI growth 4.1% 3.7% 30 Maintenance capex $22.9m $17.2m 20 Ca
Slide 55: Top Ten Tenants by Income
top ten tenants by income Office Retail Rank Tenant Percentage 1 S&P rating Rank Tenant Percentage 2 S&P rating 1 Westpac — St George 21.4% AA 1 Wesfarmers — Coles 12.4% A- 2 Government 16.8% AAA 2 Woolworths 11.6% A- 3 Woolworths 7.6% A- 3 The Reject Shop 1.2% None 4 Fairfax Media Limited 4.0% BB+
Slide 56: MPT Weighted Average Cap Rate
MPT WEIGHTED AVERAGE CAP RATE 9% 8 7.88% 7.74% 7.55% 7.56% 1 7.55%1 7 7.01% 6.55% 6 5 4 3 2 1 0 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 1) Excludes 10–20 Bond Street, Sydney, NSW. By Mirvac page 55
Slide 57: Office Snapshot
OFFICE SNAPSHOT FY11 FY10 Office lease expiry profile by area Properties owned 28 31 60% 55% NLA 596,392 sqm 655,077 sqm 50 Book value $3,226.4m $3,252.1m 40 WACR 7.49% 7.64% Net property income $224.5m $126.0m 30 Like for Like NOI Growth 4.2% 4.0% 20 Maintenance capex $9.1m $8.5m 14% Cash tenant in
Slide 58: Office Metrics
office metrics Book value June 2011 Occupancy 1 Average passing No of assets $m June 2011 gross rent $ per sqm NSW 13 2,138.2 99.1% 558.1 North Sydney 2 263.0 99.3% 659.1 Sydney Fringe 2 286.0 100.0% 556.4 Sydney CBD 5 1,042.6 98.3% 710.5 Homebush/Rhodes 2 194.0 99.0% 377.1 Parramatta 1 102.6 100.0%
Slide 59: Retail Snapshot
RETAIL SNAPSHOT FY11 FY10 Retail lease expiry profile by area Properties owned 22 25 50% 47% NLA 452,201 sqm 523,250 sqm 40 Book value $1,708.3m $1,768.2m WACR 7.41% 7.52% 30 Net property income $125.9m $120.6m Like for like NOI growth 4.3% 5.2% 20 Maintenance capex $9.9m $7.1m 11% 12% Cash tenant i
Slide 60: Industrial Snapshot
INDUSTRIAL SNAPSHOT FY11 FY10 Industrial lease expiry profile by area Properties owned 14 17 60% NLA 259,859 sqm 310,596 sqm 50 51% Book value $363.7m $412.8m 40 WACR 8.43% 8.52% Net property income $30.5m $26.6m 30 Like for like NOI growth 2.7% 0.3% 21% 20 Maintenance capex $1.6m $1.6m Cash tenant
Slide 61: Schedule of Disposals
schedule of disposals FY11 disposals Previous Gross Proceeds Actual book value sale price above book settlement Property State Type Status $m $m value $m date 253 Wellington Road, Mulgrave VIC Industrial Settled $4.5m $4.7m $0.2m Jul 10 James Ruse Business Park, Northmead NSW Industrial Settled $28.
Slide 62: Commercial Development Pipeline
commercial development Pipeline $1.4bn commercial development pipeline to be undertaken in-house by Mirvac Development Active Project Type Status FY11 FY12 FY13 FY14 FY15 FY16+ ✔ 10-20 Bond Street 1, Sydney, NSW (50% with IOF2) Office 81.0%32.6% Preleased preleased $2m 3, 7.8% 4 Feb 10 to Jul 11 ✔ N
Slide 63: Development
development waterfront, newstead, qld By Mirvac page 62
Slide 64: Residential Market Outlook
RESIDENTIAL market residential MARKET outlook OUTLOOK Rising interest rates, flat house price growth and an insufficient transport system will continue to weigh on traditional house building activity. Consequently, demand is likely to remain biased towards higher density living. Even though there ha
Slide 65: Development FY11 Activity Detail
development FY11 ACTIVITY DETAIL 1,724 lot settlements consisting of: Total Condos House/Land Settlement by lots Lots % Lots % Lots % NSW 839 48.7% 91 5.3% 748 43.4% VIC 237 13.7% — — 237 13.7% WA 467 27.1% 71 4.1% 396 23.0% QLD 181 10.5% 68 3.9% 113 6.6% Total 1,724 100.0% 230 13.3% 1,494 86.7% FY1
Slide 66: Development Outlook Detail
development Outlook Detail $980.3m 1 of exchanged residential pre-sales Settlement Settlement Lots Revenue Released Division Project Stage Status ownership year Lots presold $m 2 ✔ QLD Waterfront Newstead Park Precinct Under construction 100% FY13 102 30.4% 107.2 ✔ VIC Yarra’s Edge River Homes Stage
Slide 67: Geographic Diversity
geographic diversity Forecast EBIT by geographic location FY12 FY13 FY14 FY15 NSW 58.5% NSW 13.3% NSW 59.7% NSW 25.1% VIC 11.9% VIC 45.4% VIC 1.7% VIC 21.5% QLD 14.7% QLD 29.5% QLD 33.9% QLD 22.4% WA 14.9% WA 11.8% WA 4.7% WA 31.0% By Mirvac page 66
Slide 68: Residential Development – New South Wales
residential development – new south wales Residential Estate GILLIESTON FLETCHER 402 LOTS condos 268 LOTS NT Mixed QLD WA THE ROYAL, NEWCASTLE SA 167 LOTS NSW VIC TAS NEWBURY, STANHOPE 1,749 LOTS CHELSEA GARDENS, CASTLE HILL 63 LOTS CHATSWOOD, ERA 295 LOTS RHODES WATERSIDE RHODES 933 LOTS SYDNEY CBD
Slide 69: Residential Development – Queensland
residential development – Queensland MARINER’S PENINSULA, TOWNSVILLE Residential Estate 187 LOTS condos NT JOYNER Mixed QLD 32 LOTS WA SA NSW VIC WATERFRONT, TAS NEWSTEAD HAMILTON 724 LOTS 582 LOTS BRISBANE CBD MOSSVALE ON MANLY, WAKERLEY 180 LOTS TENNYSON REACH, TENNYSON 207 LOTS THE SANCTUARY, MOG
Slide 70: Residential Development – Victoria
residential development – victoria Residential Estate condos NT Mixed QLD WA SA NSW MELBOURNE CBD VIC TAS ROCKBANK 5,780 LOTS YARRA'S EDGE, DOCKLANDS 1,173 LOTS HARCREST, WANTIRNA SOUTH 841 LOTS LAUREATE, ALBERT PARK 46 LOTS WAVERLEY PARK, MULGRAVE 1,307 LOTS ARGYLE AT WATERWAYS, BRAESIDE 145 LOTS B
Slide 71: Residential Development – Western Australia
residential development – western australia Residential Estate condos NT Mixed QLD WA MINDARIE KEYS, MINDARIE SA 1,541 LOTS NSW VIC TAS JANE BROOK 216 LOTS SWANBOURNE 95 LOTS PERTH CBD BEACHSIDE LEIGHTON, NORTH FREMANTLE 157 LOTS THE PENINSULA, BURSWOOD 669 LOTS MANDURAH KENNEDY BAY, BINNINGUP 2,468
Slide 72: Forecast EBIT Composition
forecast ebit composition Forecast EBIT composition - 89.5% of forecast EBIT to be contributed by 100% owned Mirvac inventory by FY14. 100% 75% 89.5% 76.5% 77.4% 77.5% 50% 25% 0% FY11 FY12 FY13 FY14 100% Mirvac inventory and PDA’s JV’s MWRDP Development funds By Mirvac page 71
Slide 73: Gross Development Margin
GROSS development MARGIN Cost of Development and property Gross Gross construction development and development development revenue construction margin margin $m $m $m % FY11 Adjusted for zero margin settlements 470.0 (385.7) 84.3 17.9 Commercial projects 51.3 (33.1) Provision projects 239.3 (233.4)
Slide 74: Development Historical Information (FY07–FY11)
DEVELOPMENT HISTORICAL INFORMATION (FY07 – FY11) FY11 FY10 FY09 FY08 FY07 Development & construction revenue 958.1 862.2 1,090.8 1,180.5 1,262.0 Gross margin 14.2% 11.4% 16.5% 21.9% 21.3% Gross residential margin (excluding zero margin) 17.9% 17.6% 20.5% 21.9% 21.3% EBIT 1 86.7 51.3 75.1 218.6 211.8
Slide 75: Provisions
Provisions Englobo sales disposal program Project Target sales date Update Dianella June 2011 Settled as forecasted Tennyson (Stages 3 - 5) June 2011 Settled as forecasted Magenta Shores September 2011 Settled August 2011 - ahead of forecast The Royal, Newcastle (Stages 1C & 2) June 2012 On track —
Slide 76: Combining High + Low Density Projects
Combining High + Low Density Projects Diversification Reduces volatility of earnings Different demand drivers across Large contributions offset by smaller stable volume products > High Density: Government requires NSW Projects Profile 1 supply from urban high density House/Land supply to meet popula
Slide 77: Residential Development: High Density = Condos
residential development High Density = Condos Profile of high density Generic Profile — Single Stage, 200 Unit Condo Month 35 Month 6 Month 12 Month 15 Practical DA Submitted DA Approved Construction Commences Completion > High barriers to entry 50.0% Settlement of > Acceptable risk Land Payment Uns
Slide 78: Residential Development: Low Density = Houses and Land
residential development Low Density = Houses & Land Profile of low density Generic Profile - Multi Stage, 1,000 Lot Masterplanned Community Month 6 Month 24 Month 36 > Lower capital commitment 80.0% DA Submitted DA Approved First Settlement > Smoother earnings > Delivery less complicated 40.0% Negot
Slide 79: Development Risk Management
development risk management Superior brand leveraged $ Higher Price Repeat pre-sales premium customers achieved Ability to drive returns in a flat macro market > Better access to capital > National procurement > Brand drives pre-sales and price premium > Increased market share > Conservative assumpt
Slide 80: Hypothetical Profit Making Development Project
Hypothetical Profit Making Development Project – Treatment of Capitalised Costs Project metrics Total Sales revenue 100 Land (25) Cost of property development and construction (50) Sales & marketing expenses (10) Interest costs (10) Total project return 5 Cash Flow Year 1 Year 2 Year 3 Sales revenue
Slide 81: Hypothetical Provisioned Development Project
Hypothetical Provisioned Development Project – Treatment of Capitalised Costs Project metrics Total Sales revenue 100 Land (25) Cost of property development and construction (50) Sales & marketing expenses (10) Interest costs (25) Total project return (10) This is the same project but it has suffere
Slide 82: Hotel Management
hotel management the royal, newcastle, nsw By Mirvac page 81
Slide 83: Hotel Management Update
HOTEL MANAGEMENT UPDATE > Hotels under management currently stands at 46, with total rooms of 5,840 > Recovering corporate and conferencing market segments together with minimal new supply resulted in RevPAR growth of 8.3% Hotel management FY11 FY10 % Average room rate $176 $168 4.8% Occupancy rate
Slide 84: Hotel Management Definitions
HOTEL MANAGEMENT DEFINITIONS Managed and Managed/Strata Strata/Managed Lot Owned Franchise Mirvac manages hotels on Mirvac operates the hotels Mirvac owns the land, building The hotel is owned and Definition behalf of the owner. Mirvac under a lease or licence and hotel business. operated by a third
Slide 85: Hotel Management Brand Portfolio
hotel management brand portfolio 2 hotels 1 hotel Future openings 215 rooms 107 rooms 7 hotels 1 hotel 629 rooms 241 rooms 24 hotels 1 hotel 3,102 rooms 59 rooms Leighton BEACH 6 hotels 1 hotel 1,194 rooms 94 rooms 1 hotel 1 hotel 65 rooms 79 rooms 1 hotel 55 rooms By Mirvac page 84
Slide 86: Corporate Responsibility and Sustainability
corporate responsibility and sustainability artist impression of 8 chifley square, sydney, nsw By Mirvac page 85
Slide 87: Corporate Responsibility and Sustainability
corporate responsibility and sustainability Mirvac’s commitment to excellence in sustainability delivers tangible results > Investment in energy efficiency technology has delivered significant energy savings and improvement to our office and industrial portfolio NABERS rating: MPT Portfolio Energy S
Slide 88: Corporate Responsibility and Sustainability
corporate responsibility and sustainability Key FY11 Achievements: > First in the Real Estate Sector for the inaugural Global FTSE4Good ESG Ratings > Highest score, “Best Practice”, for environmental performance by CGI Lewis & Co. > Signatory of the City of Sydney’s ‘Better Buildings Partnership’ FY
Slide 89: Health, Safety and Wellbeing
health safety and wellbeing Reduced injuries FY07 to FY11: Lost time injury frequency rate > 58% reduction injuries 1 or more days lost FY11 8.8 > 53% reduction Lost Time Injury Frequency Rate 10.8 FY10 Reduced injuries and workers 14.0 FY09 compensation FY08 to FY11 FY08 17.2 > 81% reduction averag
Slide 90: 1H12 Calendar
1H12 Calendar 1 Announcements: Event Location Date MGR Distribution Announcement — Wednesday 21 September 2011 September 2011 Quarter Indicative Distribution Ex-Date — Monday 26 September 2011 Quarterly Update to Market Sydney Wednesday 2 November 2011 Annual General Meeting Perth Thursday 17 Novemb
Slide 91: Acronyms
acronyms Term Meaning ABS Australian Bureau of Statistics CAGR Compound Annual Growth Rate CMBS Commercial Mortgage Backed Securities COGS Cost of Good Sold CPI Consumer Price Index CPSS Cents Per Stapled Security DA Development Application DIAC Department of Immigration and Citizenship DPS Distribu
Slide 92: Acronyms
acronyms Term Meaning LPT Listed Property Trust MAT Moving Annual Turnover MGR Mirvac Group ASX code MPT Mirvac Property Trust MTN Medium Term Note MWRDP Mirvac Wholesale Residential Development Partnership NABERS National Australian Built Environment Rating system — The National Australian Built En
Slide 93: Glossary
GLOSSARY Glossary Definition Source Tenant Definitions Majors Named Major tenants to only include the following: Woolworths, Coles, Bi-Lo, Aldi, Action, Dewsons, Shopping Centre Franklins, IGA, Farmer Jacks, Foodworks, Foodland, Spar Supermarket, Harris Scarfe (where more than Council of Australia 4
Slide 94: Glossary
GLOSSARY Glossary Definition Source Neighbourhood Centre A local shopping centre comprising a supermarket and approximately 35 specially shops. Property Council of Australia Regional Centre A shopping centre typically incorporates one full line department store, a full line discount department Prope
Slide 95: Glossary
GLOSSARY Glossary Definition Source Category Killer A retailer specialising in a narrow category of merchandise in which it seeks to dominate the market. Property Council Provides wide assortment of choice (breadth) and many units of each item (depth). Uses economies of of Australia scale and low co
Slide 96: Glossary
GLOSSARY Glossary Definition Source National Australian Built The National Australian Built Environment Rating System is a multiple index performance-based rating Property Council Environment Rating System tool that measures an existing building’s overall environmental performance during operation.
Slide 97: Glossary
GLOSSARY Glossary Definition Source Mirvac Development Structures Joint Venture Undertaking a development in a defined partnership with a co-investor. PDA Provision of development services by Mirvac for a return without the transfer of title from the owner, who retains a long term interest. Structur
Slide 98: Disclaimer and Important Notice
DISCLAIMER AND IMPORTANT NOTICE Mirvac Group comprises Mirvac Limited ABN 92 003 280 699 and Mirvac Property This Presentation contains certain “forward looking” statements. The words Trust ARSN 086 780 645. This presentation (“Presentation”) has been prepared “anticipated”, “expected”, “projections
Slide 99: By Mirvac
hoxton park distribution centre, hoxton park, nsw by mirvac