Mirvac Group · ASX:MGR
Mirvac — Investor Day (October 2023)
62 slides from Mirvac's investor day presentation, Oct 10, 2023
Slide 1: Mirvac Living Sectors Investor Day announcement
10 October 2023 MIRVAC LIVING SECTORS INVESTOR DAY Mirvac Group (Mirvac) [ASX: MGR] today is hosting an Investor Update on Living Sectors, including Build to Rent, and Land Lease. The Investor presentation and Q&A will be live webcast from 8.30am AEDT this morning. Details of the live webcast are pe
Slide 2: Mirvac Living Sectors Investor Day
Mirvac Living Sectors For personal use only Investor Day 10 October 2023 LIV Munro, Melbourne
Slide 3: Acknowledgement of Country
MIRVAC LIVING SECTORS INVESTOR DAY For personal use only Acknowledgement of Country Mirvac acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Owners of the lands and waters of Australia, and we offer our respect to their Elders past and present. Artwork: ‘Reimagining Count
Slide 4: Agenda
MIRVAC LIVING SECTORS INVESTOR DAY Agenda LIVING SECTORS COMPELLING MARKET BUILD TO RENT & LIV LAND LEASE THANK YOU FUNDAMENTALS For personal use only Campbell Hanan Angela Buckley Stephen Gould Campbell Hanan Group CEO & Managing Director Alexandra Gray Fund Manager – BTR Sector Lead General Manage
Slide 5: Living Sectors
MIRVAC LIVING SECTORS INVESTOR DAY Living Sectors For personal use only Campbell Hanan Group CEO & Managing Director Trielle, Yarra’s Edge, Melbourne (artist impression, final design may differ) 10 OCTOBER 2023 3
Slide 6: Why are we expanding into a broader spectrum of living sectors?
MIRVAC LIVING SECTORS INVESTOR DAY Why are we expanding into a broader spectrum of living sectors? For personal use only rti f rti f rti f er. er. er. dif dif dif A A A st st st imp ay imp ay imp ay ress i gn m ress i gn m ress i gn m io n , f in a l d e s io n , f in a l d e s io n , f in a l d e s
Slide 7: Organisational structure for alignment
MIRVAC LIVING SECTORS INVESTOR DAY Organisational structure for alignment Campbell Hanan | Group CEO & Managing Director For personal use only Scott Mosely | CEO, Funds Management Richard Seddon | CEO, Investment Stuart Penklis | CEO, Development Funds Management Investment Development Courtenay Smi
Slide 8: Group responding to long-term structural trends
MIRVAC LIVING SECTORS INVESTOR DAY Group responding to long-term structural trends Mirvac’s business leverages structural mega-trends, supporting growth over time For personal use only OUR FUTURE FOCUS Retain balance sheet flexibility Institutional Urbanisation, densification, Changing demographics
Slide 9: The Mirvac difference
MIRVAC LIVING SECTORS INVESTOR DAY The Mirvac difference For personal use only Mirvac capability and track record winning market share QUALITY PRODUCT, DEEP TRACK RECORD DEVELOPMENT FLEXIBILITY SCALE & RISK MANAGEMENT > Upfront community amenity and infrastructure > Operate across residential spectr
Slide 10: Our competitive advantage
MIRVAC LIVING SECTORS INVESTOR DAY Our competitive advantage Award-winning Australian urban asset creator, owner and manager For personal use only INTEGRATED ASSET CREATION S E T C R E AT I O AND CURATION CAPABILITY IS OUR AS elopment N Dev KEY COMPETITIVE ADVANTAGE: > Unique in-house asset creation
Slide 11: Compelling market fundamentals
MIRVAC LIVING SECTORS INVESTOR DAY Compelling market For personal use only fundamentals Alexandra Gray Head of Research 10 OCTOBER 2023 9 LIV Aston, Melbourne (artist impression, final design may differ)
Slide 12: Overseas migrants – dwelling & tenure patterns
MIRVAC LIVING SECTORS INVESTOR DAY Overseas migrants – dwelling & tenure patterns For personal use only Overseas migration is currently at an all time high level – ~1,000,000 new people are forecast over next three years, requiring an additional ~400,000 dwellings 1 OVERSEAS ARRIVALS TO GREATER SYDN
Slide 13: Ambitious national housing accord targets released
MIRVAC LIVING SECTORS INVESTOR DAY Ambitious national housing accord targets released AUSTRALIAN DWELLING COMPLETIONS & NATIONAL HOUSING ACCORD TARGETS For personal use only No '000s 400 Approximate trajectory Forecast required to hit 1.2 million 350 300 250 1.2 million target 200 Previous 1 million
Slide 14: Extended period of low supply ahead
MIRVAC LIVING SECTORS INVESTOR DAY Extended period of low supply ahead FORECAST DETACHED HOUSING SUPPLY FORECAST ATTACHED HOUSING SUPPLY For personal use only 70,000 90,000 80,000 60,000 70,000 50,000 60,000 40,000 50,000 30,000 40,000 30,000 20,000 20,000 10,000 10,000 0 0 2011 2013 2015 2017 2019
Slide 15: Restricted apartment supply outlook
MIRVAC LIVING SECTORS INVESTOR DAY Restricted apartment supply outlook POPULATION ADDITIONS 1 VS CAPITAL CITY UNIT SUPPLY 2 For personal use only Sydney, Melbourne & Brisbane market high density apartment completions 70,000 apartments 400,000 people 60,000 300,000 50,000 200,000 40,000 30,000 100,00
Slide 16: Record low vacancy and significant rental growth
MIRVAC LIVING SECTORS INVESTOR DAY Record low vacancy and significant rental growth RENTAL VACANCY RATES CAPITAL CITY UNIT RENT PERFORMANCE SINCE MARCH 2020 For personal use only 6% 40% 5 30 4 20 3 10 2 0 1.5% 1.2% 1 1.2% (10) 1.0% 0 (20) Aug 14 Aug 15 Aug 16 Aug 17 Aug 18 Aug 19 Aug 20 Aug 21 Aug 2
Slide 17: Renters – fastest growing tenure across all large population cohorts
MIRVAC LIVING SECTORS INVESTOR DAY Renters – fastest growing tenure across all large population cohorts CHANGE IN HOUSING TYPE – SYDNEY, MELBOURNE & BRISBANE VOLUME OF RENTERS BY AGE COHORT For personal use only Past 15 year Compound Average Growth Rate (CAGR) Greater Sydney, Greater Melbourne & Gre
Slide 18: High-rise apartments – growing in importance for renters
MIRVAC LIVING SECTORS INVESTOR DAY High-rise apartments – growing in importance for renters RENTERS – SINGLE & GROUP HOUSEHOLDS RENTERS – FAMILIES WITH KIDS For personal use only Share living in high-rise apartment Share living in high-rise apartment 60% 60% 40 40 20 20 0 0 2006 2011 2016 2021 2006
Slide 19: BTR will play an important role in addressing future supply
MIRVAC LIVING SECTORS INVESTOR DAY BTR will play an important role in addressing future supply RENTER AFFORDABILITY WEEKLY RENT INCOME VERSUS NEW INVESTOR For personal use only Portion of income required to service rent MORTGAGE LOAN PAYMENTS $800 GREATER SYDNEY UNITS GREATER MELBOURNE UNITS GREATER
Slide 20: Strong growth in retirees, opportunity to unlock under-utilised housing stock
MIRVAC LIVING SECTORS INVESTOR DAY Strong growth in retirees, opportunity to unlock under-utilised housing stock POPULATION AGED 55+ RESIDENTS & BEDROOMS For personal use only Intergenerational review projections (% of total, aged 55-79 years) 15,000,000 people 60% 48% 13,000,000 50 43 11,000,000 38
Slide 21: Investment appeal
MIRVAC LIVING SECTORS INVESTOR DAY Investment For personal use only appeal Richard Seddon CEO, Investment LIV Anura, Brisbane (artist impression, final design may differ) 10 OCTOBER 2023 19
Slide 22: Continue to increase resilience of Investment portfolio
MIRVAC LIVING SECTORS INVESTOR DAY Continue to increase resilience of Investment portfolio CURRENT POSITION For personal use only ACTIVE MANAGEMENT HAS DRIVEN STRONG UPLIFT IN PORTFOLIO QUALITY FUTURE FOCUS > ~$4.2bn of assets disposed over last 10 years > ~$6bn1 of assets created over last 10 years
Slide 23: Appeal of BTR asset class
MIRVAC LIVING SECTORS INVESTOR DAY Appeal of BTR asset class For personal use only UNDERPINNED BY ATTRACTIVE RISK ADJUSTED ALIGNED TO MGR STRUCTURAL DRIVERS INVESTMENT RETURNS CAPABILITIES > Strong population growth STABLE INCOME STREAMS > 50 year Residential track record and > Affordability pressur
Slide 24: BTR has outperformed globally
MIRVAC LIVING SECTORS INVESTOR DAY BTR has outperformed globally EUROPEAN RESIDENTIAL – LONG TERM RISK BTR HAS DELIVERED STRONG PERFORMANCE IN OTHER MATURE MARKETS ADJUSTED RETURN OUTPERFORMANCE For personal use only US DIRECT RETURNS AND VOLATILITY EUROPEAN ECONOMIC CAP RATES BY SECTOR 12% 10.0% 8.
Slide 25: Sector outperformance – Australia
MIRVAC LIVING SECTORS INVESTOR DAY Sector outperformance – Australia LIKE INTERNATIONAL MARKETS, BTR IS EXPECTED TO TRADE INSIDE THE TRADITIONAL SECTOR CAPITALISATION RATES For personal use only Major affordability One of the lowest Strongest 20-year Lowest level of Rental growth constraints enterin
Slide 26: Attractive return outlook
INDICATIVE ONLY MIRVAC LIVING SECTORS INVESTOR DAY 1 Attractive return outlook POTENTIAL INVESTMENT RETURNS1 ADDITIONAL DEVELOPMENT/ For personal use only PLATFORM OPPORTUNITY 16.0% 12.0 8.5%+ 8.0 Investment IRR 7-7.5% 10 year blended unlevered IRR + DM fees + IM & AM fees 4.0 0 Initial yield (yr 1)
Slide 27: BTR in Australia
MIRVAC LIVING SECTORS INVESTOR DAY BTR in Australia AUSTRALIAN KNOWN BTR SUPPLY PIPELINE 13 For personal use only 50,000 47,460 Operating assets in Australia1 40,000 30,410 30,000 22,430 20,000 15,915 11,250 10,000 8,820 6,450 0 2017 2018 2019 2020 2021 2022 Q3 2023 Built Under construction Approved
Slide 28: Potential addressable market is deep
MIRVAC LIVING SECTORS INVESTOR DAY Potential addressable market is deep PROFESSIONALLY MANAGED HOUSING STOCK For personal use only AS % OF TOTAL STOCK LOW PENETRATION RATE – MATERIAL SCALE OPPORTUNITY 12% 12% 10 INSTITUTIONAL REAL ESTATE MARKET AUSTRALIA $400bn 8 Potential BTR market 300 ~$290bn 6 a
Slide 29: Mirvac has pioneered the build to rent sector in Australia
MIRVAC LIVING SECTORS INVESTOR DAY Mirvac has pioneered the build to rent sector in Australia MIRVAC IS THE LEADING PLAYER AMONGST THE MAJOR BTR DEVELOPERS, WITH OPERATIONAL EXPERIENCE For personal use only 3,500 apartments 3,000 2,500 2,000 1,500 1,000 500 0 Mirvac Home (GFM) Greystar Investa Pelli
Slide 30: Aligned to Mirvac capabilities
MIRVAC LIVING SECTORS INVESTOR DAY Aligned to Mirvac capabilities OWN For personal use only AWARD WINNING RESIDENTIAL INVESTMENT EXPERTISE DEVELOPMENT TRACK RECORD Leading AREIT Office > >50yrs experience Retail > Outperforming investment track record > Site selection Build to Rent > Multi-sector ca
Slide 31: BTR value proposition
MIRVAC LIVING SECTORS INVESTOR DAY BTR value For personal use only proposition Angela Buckley Fund Manager – BTR Sector Lead Albert Fields, Melbourne (artist impression, final design may differ) 10 OCTOBER 2023 29
Slide 32: LIV – Our ambition is to unassailably lead the BTR category
MIRVAC LIVING SECTORS INVESTOR DAY LIV – Our ambition is to unassailably lead the BTR category For personal use only BTR FIRST MOVER SECURED AND DIVERSIFIED EXPERIENCED TEAM ADVANTAGE, BACKED BY DEVELOPMENT PIPELINE AND PROVEN PLATFORM 50 YEARS OF RESIDENTIAL Existing 2,200 apartment pipeline IN A S
Slide 33: LIV – Australia's most progressed BTR portfolio, poised for growth
MIRVAC LIVING SECTORS INVESTOR DAY LIV – Australia’s most progressed BTR portfolio, poised for growth $1.8bn Seed Portfolio, Commitment to grow to More than 1,100 Market leading ESG For personal use only ~2,200 apartments at least 5,000 apartments customers today credentials and targets GENERATION 1
Slide 34: LIV Value Proposition
MIRVAC LIVING SECTORS INVESTOR DAY LIV Value Proposition LEVERAGING MIRVAC’S EXTENSIVE CAPABILITY WITH A STRONG UNDERSTANDING OF A NEW CONSUMER MINDSET For personal use only HAS LED TO THE CREATION OF LIV, AN INDUSTRY-LEADING BRAND WITH A CLEAR VALUE PROPOSITION “LIV is in the business of life, not
Slide 35: BTR offers compelling value for customers
MIRVAC LIVING SECTORS INVESTOR DAY “As soon as we saw the co‑working space, BTR offers compelling value for customers we knew this place would be amazing” 1 BR 2 BR w 1 BTH 1 BR w 1 BTH Munro BTR Private Landlord Private Landlord For personal use only Apartment size (sqm) 52 61 53 Rent – weekly1 $65
Slide 36: Customer takeaways
MIRVAC LIVING SECTORS INVESTOR DAY Customer takeaways LIV INDIGO – HOUSEHOLD TYPES1 For personal use only A SNAPSHOT OF WHO IS LIVING AT LIV1 Couple: 38% Single: 31% Family: 21% Share: 10% 630 >1,100 ~161 84 Total number Total number Total number Total number of households of residents of pets of ch
Slide 37: A new way of living – how are our residents making the most of LIV
MIRVAC LIVING SECTORS INVESTOR DAY A new way of living – how are our residents making the most of LIV WHAT OUR RESIDENTS ARE DOING1 For personal use only LIV OFFERINGS AMENITIES COMMUNITY EVENT CAR RENTAL CINEMA “The team initiate events and keep the community going. I go to dinners, trivia nights a
Slide 38: Operational learnings
MIRVAC LIVING SECTORS INVESTOR DAY Operational learnings Implementing real time experience into operating platform For personal use only PARTNERSHIPS LIFECYCLE ASSESSMENTS & IMPLEMENTATION VALUE OF ONSITE TEAM 10 OCTOBER 2023 36
Slide 39: Designing for access
MIRVAC LIVING SECTORS INVESTOR DAY Designing for access Activating spaces and bringing them to life by utilising them across the day in different ways For personal use only AMENITY UTILISATION 10 OCTOBER 2023 37
Slide 40: Funds Management Overview
MIRVAC LIVING SECTORS INVESTOR DAY Funds Management For personal use only Overview Scott Mosely CEO, Funds Management LIV Aston, Melbourne (artist impression, final design may differ) 10 OCTOBER 2023 38
Slide 41: Expand Funds Management offering
MIRVAC LIVING SECTORS INVESTOR DAY Expand Funds Management offering > Restructured organisation establishing Funds division, ensuring leading corporate governance and performance For personal use only driven culture FUTURE FOCUS > Added 3 major new aligned partnerships over FY23 with strong growth m
Slide 42: New BTR Venture structure
MIRVAC LIVING SECTORS INVESTOR DAY New BTR Venture structure > Flagship BTR vehicle STRUCTURE SUMMARY For personal use only > Aligned long-term capital partners, including Clean Energy Finance Corporation (CEFC) > Strong alignment with Mirvac’s ~44% ownership share > Mirvac retains 100% ownership of
Slide 43: BTR Operating platform
MIRVAC LIVING SECTORS INVESTOR DAY BTR Operating platform > Established scalable operational platform capability across leasing, For personal use only property management, marketing, technology, customer service and maintenance > 6 years planning and 3 years operational experience > 100% Mirvac owne
Slide 44: What's next?
MIRVAC LIVING SECTORS INVESTOR DAY What’s next? Creating value for all stakeholders For personal use only INVESTING IN RESPONDING TO KEY THEMATICS LEVERAGING FUTURE FOCUS ECONOMIC CLIMATE where we have MIRVAC’S EXPERTISE operational expertise > To grow where we have deep operational capability > Con
Slide 45: Development
MIRVAC LIVING SECTORS INVESTOR DAY Development For personal use only Stuart Penklis Sarsha Durham CEO, Development Development Director LIV Aston, Melbourne (artist impression, final design may differ) 10 OCTOBER 2023 43
Slide 46: Leverage integrated Development capability
MIRVAC LIVING SECTORS INVESTOR DAY Leverage integrated Development capability CURRENT POSITION For personal use only > 50-year track record of development through cycles MIRVAC FUTURE FOCUS CONSTRUCTION > Integrated development, design and construction capability and reputation for quality is a crit
Slide 47: Benefits on in-house creation
MIRVAC LIVING SECTORS INVESTOR DAY Benefits on in-house creation For personal use only IO N ASSET VALUE CREATION N STR UCT LEAS ING DEVELOPMENT FLEXIBILITY CO CO NT MM > $1.3bn of value created over last 10 years1 > Adjust designs to meet evolving ME ST ITY AK ENG UN GE > ~26% average total return o
Slide 48: Learnings going into new design of Build to Rent assets
MIRVAC LIVING SECTORS INVESTOR DAY Learnings going into new design of Build to Rent assets For personal use only LOBBY DESIGN CO-WORKING LIV Aston, Melbourne (artist impression, final design may differ) MODULAR UTILISATION LIV Munro, Melbourne | Photo credit: James Horan LIV Munro, Melbourne 10 OCTO
Slide 49: Development driving sustainability outcomes
MIRVAC LIVING SECTORS INVESTOR DAY Development driving sustainability outcomes LIV Munro has a NatHERS rating of 8.1 stars, For personal use only the highest in Victoria for a building of its scale ESG LEARNINGS FROM EXISTING PROPERTIES > Embedded networks to deliver ESG targets > Measuring the cont
Slide 50: ~$1.2bn Build to Rent pipeline – Aston, Melbourne
MIRVAC LIVING SECTORS INVESTOR DAY ~$1.2bn Build to Rent pipeline 1 UNDER CONSTRUCTION For personal use only | ASTON, MELBOURNE KEY AMENITY PROXIMITY Crown Ent. Complex 250m Tram: Spencer Street Route <50m Potential Melbourne Airport Excellent access Size completion Collins Square 500m Bus: Spencer
Slide 51: ~$1.2bn Build to Rent pipeline – Anura, Brisbane
MIRVAC LIVING SECTORS INVESTOR DAY ~$1.2bn Build to Rent pipeline 1 UNDER CONSTRUCTION For personal use only QUEENSLAND GOVERNMENT BTR ESSENTIAL WORKER PILOT PROGRAM 25% of apartments offered 25% below market rents to local key workers for 25 years ~100 units to be made available State Government pr
Slide 52: The future of LIV
MIRVAC LIVING SECTORS INVESTOR DAY The future of LIV UNDER CONSTRUCTION For personal use only | ALBERT FIELDS, MELBOURNE KEY AMENITY PROXIMITY Clifton Park <50m Bus: Clifton Park Bus Stop 150m Potential Melbourne CBD 15-20 mins Close to Size completion Union Square Shopping Centre 500m Rail: Brunswi
Slide 53: Land Lease
MIRVAC LIVING SECTORS INVESTOR DAY Land Lease For personal use only Stephen Gould General Manager Land Lease Communities Everleigh, Brisbane 10 OCTOBER 2023 51
Slide 54: What is Land Lease?
MIRVAC LIVING SECTORS INVESTOR DAY What is Land Lease? AN ATTRACTIVE MODEL COMBINING DEFENSIVE CASHFLOW THERE ARE TWO TRANSACTIONS WITH CUSTOMERS: For personal use only AND DEVELOPMENTS UPSIDE > Sale of a new dwelling to incoming resident: Residents acquires a newly built house. A development profit
Slide 55: Compelling investment proposition
MIRVAC LIVING SECTORS INVESTOR DAY Compelling investment proposition For personal use only GROWTH IN 55+ POPULATION AND LOW PENETRATION RATES LAND LEASE COMMUNITIES ARE CAPITAL LIGHT WITH STRONG, STABLE CASH GENERATION IN PERPETUITY FUTURE POTENTIAL Characteristics MARKET OPPORTUNITY Affordable hous
Slide 56: Compelling customer proposition
MIRVAC LIVING SECTORS INVESTOR DAY Compelling customer proposition For personal use only > Low maintenance homes, with high security > Release of equity from sale of family home > Access to community amenity to encourage – to fund purchase and lifestyle choices a healthy and connected lifestyle > Si
Slide 57: Mirvac's capabilities and assets provide a strong foundation to launch into land lease
MIRVAC LIVING SECTORS INVESTOR DAY Mirvac’s capabilities and assets provide a strong foundation to launch into land lease For personal use only MIRVAC BRAND, REPUTATION UNDERSTANDING & CUSTOMER DATABASE DOWNSIZER COHORT Existing brand awareness, a reputation for TION UND PUTA DOWN ERSTA Appreciation
Slide 58: Leveraging our existing landbank to pilot our first land lease community
MIRVAC LIVING SECTORS INVESTOR DAY Leveraging our existing landbank to pilot our first land lease community Pilot site Everleigh For personal use only Location Greenbank, Queensland (26km south of Brisbane CBD) Site size ~11 hectares LLC lot yield 22-25 lots per hectare Timing Material Change of Use
Slide 59: Q&A
MIRVAC LIVING SECTORS INVESTOR DAY Q&A For personal use only Courtenay Smith Stuart Penklis Richard Seddon Angela Buckley Stephen Gould Gavin Peacock Chief Financial Officer CEO, Development CEO, Investment Fund Manager – General Manager, General Manager, BTR Sector Lead Land Lease Communities Inves
Slide 60: Thank you
MIRVAC LIVING SECTORS INVESTOR DAY Thank you For personal use only Campbell Hanan Group CEO & Managing Director LIV Munro, Melbourne 10 OCTOBER 2023 58
Slide 61: Important notice
MIRVAC LIVING SECTORS INVESTOR DAY Important notice Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust (ARSN 086 780 645). This Presentation contains certain “forward looking” statements. The words “expected”, “forecast”, “estimates”, For personal use only This pres
Slide 62: Thank you
Thank you CONTACT Gavin Peacock, CFA | General Manager Investor Relations investor.relations@mirvac.com AUTHORISED FOR RELEASE BY Mirvac Continuous Disclosure Committee MIRVAC GROUP Level 28, 200 George Street, Sydney NSW 2000 For personal use only