Mirvac Group · ASX:MGR
Mirvac — Investor Presentation (June 2009)
46 slides from Mirvac's investor presentation, Jun 4, 2009
Slide 1: Capital Management Initiatives: Equity Raising Presentation
Mirvac Group CAPITAL MANAGEMENT INITIATIVES EQUITY RAISING PRESENTATION For personal use only 4 June 2009 waverley park, vic NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS
Slide 2: Disclaimer
DISCLAIMER For personal use only Mirvac Group comprises Mirvac Limited ABN 92 003 280 699 and Not financial product advice Mirvac Property Trust ARSN 086 780 645. This Presentation has This Presentation is not financial advice or a recommendation to been prepared by Mirvac Limited and Mirvac Funds L
Slide 3: Disclaimer
DISCLAIMER For personal use only Future performance An investment in Mirvac Group stapled securities is subject to This Presentation contains certain “forward looking” statements. investment and other known and unknown risks, some of which The words “anticipated”, “expected”, “projections”, “forecas
Slide 4: Executive Summary
Executive Summary section 1 For personal use only the peninsula, burswood, wa 1 MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 03
Slide 5: Executive Summary
Executive Summary section 1: Executive Summary For personal use only > Mirvac entitlement offer and institutional placement (together the Offer) to raise up to A$1.1 billion comprising — Underwritten institutional placement of A$152.5 million at A$1.00 per stapled security — 5 for 9 entitlement offe
Slide 6: Issuance Rationale
Issuance Rationale section 1: Executive Summary For personal use only > Enhances balance sheet strength and liquidity, which remain a key focus of investors > Achieves target gearing and increases covenant headroom, after A$582m of expected devaluations and impairments — Balance sheet gearing reduce
Slide 7: Mirvac Strategy: A Simplified Approach
Mirvac Strategy A Simplified Approach For personal use only section 1: Executive Summary > Investment — Secure recurring income through ownership of Australian investment grade assets — Active portfolio management, maximising returns — Recycle assets that face income, obsolescence or asset class ris
Slide 8: Recent Key Achievements
Recent Key Achievements section 1: Executive Summary For personal use only Group Capital management 3 > A$805m unsecured debt facility extended for 3 years > Revised distribution policy Business processes 3 > Ssavings implified operational processes with recurring cost in excess of A$25m p.a. Invest
Slide 9: Balance Sheet Impact
Balance Sheet Impact section 2 For personal use only waterfront, newstead, qld 2 MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 08
Slide 10: Balance Sheet Impact
Balance Sheet Impact section 2: Balance Sheet Impact For personal use only > Equity raising significantly strengthens financial position — Balance sheet gearing reduced from 31.8% to 21.5% 1 — Covenant gearing 2 reduced from 41.3% to 30.1% 1 Pro forma balance sheet gearing Pro forma covenant gearing
Slide 11: Expected Asset Impairments and Devaluations
Expected Asset Impairments and devaluations 1, 3 For personal use only section 2: Balance Sheet Impact Investment Trust > Expected increase of 51bps in weighted average cap rate (WACR) to 7.52% 2 A$240m > Share of revaluations from equity accounted investments A$40m Development Residential and > All
Slide 12: Pro Forma Statement of Financial Position
PRO FORMA STATEMENT OF FINANCIAL POSITION For personal use only section 2: Balance Sheet Impact Expected asset Other impairments and pro forma Pro forma 31 Dec 08 devaluations 1 adjustments 2 Equity raising 3 31 Dec 08 A$m A$m A$m A$m A$m Assets Cash and cash equivalents 27 (26) 1 Receivables 514 (6
Slide 13: Balance Sheet Sensitivity
Balance Sheet Sensitivity section 2: Balance Sheet Impact For personal use only Mirvac’s covenant gearing of <55% can withstand significant asset value deterioration Base case assumptions — Mirvac Property Trust WACR 7.52%1 ; (WACR 7.01% at 31 December 2008) — All other pro forma adjustments and inv
Slide 14: Liquidity Profile
liquidity profile section 2: Balance Sheet Impact For personal use only Funding profile as at March 2009 — Liquidity to meet all debt maturities and capital commitments in FY09, FY10 and FY11 1 — Assumes no asset sales Drawn Available Assumed Liquidity Facility limit debt liquidity reduction movemen
Slide 15: Operating Earnings
Operating Earnings section 3 For personal use only yarrA’s edge, docklands, vic 3 MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 14
Slide 16: Mirvac Property Trust Underpins the Group
Mirvac Property Trust underpins the Group For personal use only section 3: Operating Earnings > MPT earnings are highly visible — 92.7% of FY10 reviews are fixed or CPI reviews 1 > Commercial portfolio is 3.9% under-rented 1 > Retail portfolio’s speciality occupancy cost of 13.0%, supports existing
Slide 17: Development Division
Development Division section 3: Operating Earnings For personal use only Mirvac’s position as Australia’s pre-eminent residential developer is evidenced by A$909.7m 1 in exchanged residential pre-sales contracts as at March 2009 3 month exchanged contract reconciliation 1H09 exchanged contracts A$95
Slide 18: Development Division
Development Division section 3: Operating Earnings For personal use only Management expects FY09/FY10 Development Division operating earnings to be the low point of the cycle — Top 10 projects make up 63% of Development Division’s budgeted FY10 EBIT — 39% of Development Division’s budgeted FY10 EBIT
Slide 19: FY09 Operating Earnings Guidance
FY09 Operating Earnings Guidance 1 For personal use only section 3: Operating Earnings Previous FY09 FY09 guidance FY09 guidance guidance low range high range Guidance by Division (A$m) 2 (A$m) (A$m) Material drivers of change / performance Investment (MPT) 243 239 239 Investment (MPT) Fall in forec
Slide 20: FY10 Operating Earnings Guidance
FY10 Operating Earnings Guidance 1 For personal use only section 3: Operating Earnings Due to the current volatile market conditions, no FY10 guidance provided for the corporation Management do not expect FY10 corporate earnings to be materially different from the FY09 guidance range FY09 revised FY
Slide 21: Equity Raising
Equity Raising section 4 For personal use only nexus industry park, prestons, nsw 4 MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 20
Slide 22: The Offer
the offer section 4: Equity Raising For personal use only > Offer comprises entitlement offer and placement to raise up to A$1.1 billion at A$1.00 — Underwritten institutional placement of A$152.5 million — 5 for 9 entitlement offer — Underwritten institutional entitlement offer to raise approximate
Slide 23: Peer Comparison
Peer Comparison section 4: Equity Raising For personal use only Balance sheet gearing Trading price discount / premium to NTA 40% 80% 34.6% 30 31.8% 28.8% 60 59% 20 21.5% 17.7% 21.0% 18.7% 40 42% 40% 37% 33% 10 20 0 0 3% (2)% MGR MGR MGR DXS GPT SGP WDC MGR MGR MGR DXS GPT SGP WDC pre post post pre
Slide 24: Indicative Timetable
Indicative Timetable section 4: Equity Raising For personal use only Institutional offer opens 11am (Sydney time) on 4 June 2009 Institutional offer closes 10am (Sydney time) on 5 June 2009 Institutional allocations advised 5 June 2009 Record date to determine right to participate in entitlement off
Slide 25: Summary
Summary section 4: Equity Raising For personal use only > Equity raising significantly strengthens balance sheet and liquidity profile — Balance sheet gearing of 21.5% 1 — Covenant gearing of 30.1% 1 — FY10 ICR 2 is expected to be > 3 x vs. covenant of 2.25x — Liquidity to meet forecast debt maturit
Slide 26: Key Risks
Key Risks section 5 For personal use only 101 miller street, north sydney, nsw 5 MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 25
Slide 27: Key Risks
key risks section 5: key risks For personal use only Mirvac specific risks General risks > Funding > General economic conditions > Market price > Regulatory issues and changes in law > Credit ratings > Unemployment rate > Refinancing requirements > Inflation and construction costs > Interest rates >
Slide 28: Appendix A
Appendix A Appendix A For personal use only the royal, newcastle, nsw A MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 27
Slide 29: Housing Affordability
Housing Affordability Appendix A For personal use only > Affordability significantly improved by 425bp cut to cash rate > Consensus expectations for another 50bp reduction Proportion of family income to meet loan repayments 1 50% NSW QLD WA VIC Mirvac forecast 2 40% 30% 20% 10% Sep 97 Sep 99 Sep 01
Slide 30: Under Supply
Under Supply Appendix A For personal use only > Growing shortage of housing across all states, greatest in NSW > Around two years’ under-supply of housing forecast for NSW by mid-2009 (ANZ Bank) – and 185,000 dwelling shortfall nationally Underlying demand for housing – Australia Housing market unde
Slide 31: Rental Market and Vacancy
Rental Market and Vacancy Appendix A For personal use only > Vacancy rates are now at historical lows and well below the 3% rate that is generally considered equilibrium > Low vacancies have driven substantial rises in rents across the major cities > Rising rents and falling vacancies combined with
Slide 32: Expected Asset Impairments and Devaluations
Expected Asset Impairments and Devaluations 1 For personal use only Appendix A Investment Investment Development Management Total A$m A$m A$m A$m Investment Properties > Expected increase of 51bps in weighted average cap rate (WACR) to 7.52% 240 240 > Write down in value of investment in ASFI classi
Slide 33: Appendix B: Risks
Appendix B Risks For personal use only Appendix B the peninsula, burswood, wa B MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 32
Slide 34: Risks — Mirvac Specific
Risks — Mirvac Specific Appendix B: Risks For personal use only Funding Debt covenants The real estate investment and development industry tends to be highly capital Mirvac has various covenants in relation to its debt facilities, including interest intensive. The ability of Mirvac to raise funds on
Slide 35: Risks — Mirvac Specific
Risks — Mirvac Specific Appendix B: Risks For personal use only Fixed nature of significant costs Tenants may default on their rent or other contractual obligations, leading Significant expenditures associated with each investment, such as mortgage to a reduction in income from, or capital losses to
Slide 36: Risks — Mirvac Specific
Risks — Mirvac Specific Appendix B: Risks For personal use only A sustained downturn in property markets caused by any further deterioration General economic conditions in the economic climate could result in reduced development profits through The Group’s operating and financial performance is infl
Slide 37: Risks — Mirvac Specific
Risks — Mirvac Specific Appendix B: Risks For personal use only Unemployment rate Insurance Sales in residential projects may be negatively impacted by a sustained increase Property trusts, developers and constructors generally enter into contracts of in the unemployment rate in Australia, particula
Slide 38: Appendix C: Foreign jurisdictions
Appendix c Foreign jurisdictions For personal use only Appendix C waverley park, vic C MIRVAC GROUP CAPITAL MANAGEMENT INITIATIVES 4 June 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS OR PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF US PERSONS page 37
Slide 39: Foreign jurisdictions
Foreign jurisdictions Appendix C: Foreign jurisdictions For personal use only New Zealand Canada This Presentation does not constitute a prospectus or investment statement and This Presentation constitutes an offering of the stapled securities described has not been registered, filed with or approve
Slide 40: Foreign jurisdictions
Foreign jurisdictions Appendix C: Foreign jurisdictions For personal use only United Kingdom The Netherlands This Presentation is only being distributed to, and is only directed at, persons in The new stapled securities and entitlements may only be offered, sold, the United Kingdom that are qualifie
Slide 41: Foreign jurisdictions
Foreign jurisdictions Appendix C: Foreign jurisdictions For personal use only (B) any legal entity which is registered as a professional investor with the The new stapled securities and entitlements are not issued in the French Oslo Stock Exchange (No. Oslo Børs) and which has two or more of; (1) Re
Slide 42: Foreign jurisdictions
Foreign jurisdictions Appendix C: Foreign jurisdictions For personal use only Ireland The Offer is made in reliance on certain exemptions under the SFA, and is not This Presentation and any other materials in connection with the Offer relating made in or accompanied by a prospectus that is registere
Slide 43: Foreign jurisdictions
Foreign jurisdictions Appendix C: Foreign jurisdictions For personal use only (iv) where no consideration is or will be given for the transfer; or The information relating to the offering contained herein may not be used other than by the person to whom it is addressed and may not be reproduced in a
Slide 44: Glossary
Glossary For personal use only Term Meaning A$ All dollar values are in Australian dollars AREIT Australian Real Estate Investment Trust ASFI Australian Sustainable Forestry Investors ASX Australian Securities Exchange or ASX Limited or the financial market which it operates as the case requires Aus
Slide 45: Glossary
Glossary For personal use only Term Meaning MPT Mirvac Property Trust M-REIT or MRZ Mirvac Real Estate Investment Trust MTN Medium Term Note MWRDP Mirvac Wholesale Residential Development Partnership NPAT Net Profit After Tax NTA Net tangible assets Offer Offer means this entitlement offer and insti
Slide 46: www.mirvac.com
For personal use only www.mirvac.com