Mirvac Group · ASX:MGR
Mirvac — Investor Presentation (October 2018)
52 slides from Mirvac's investor presentation, Oct 26, 2018
Slide 1: Mirvac Group Investor Presentation and Tour 2018
26 October 2018 For personal use only MIRVAC GROUP INVESTOR PRESENTATION AND TOUR 2018 Mirvac Group is today hosting an Investor presentation on its Office portfolio and a tour of Australian Technology Park, at South Eveleigh. Attached is a copy of the presentation and tour book. For more informatio
Slide 2: Work Reimagined
WORK For personal use only REIMAGINED October — 2018
Slide 3: Agenda
Work Reimagined — October 2018 AGENDA For personal use only INTRODUCTION OFFICE STRATEGY OFFICE MARKET OUTLOOK CREATE TO CORE OFFICE PORTFOLIO WORK REIMAGINED OF THE FUTURE Susan Lloyd-Hurwitz Campbell Hanan Alexandra Gray Simon Healy Paul Edwards Campbell Hanan CEO & Managing Director Head of Offic
Slide 4: For personal use only
For personal use only 200 George Street, Sydney 367 Collins Street, Melbourne 2 Cultivate, Sydney 8 Chifley Square, Sydney 55 Pitt Street, Sydney (artist impression)
Slide 5: 1Q19 Operational Update
Work Reimagined — October 2018 1Q19 OPERATIONAL UPDATE 1 For personal use only 97.2% 99.2% OFFICE RETAIL OCCUPANCY 2 OCCUPANCY 2 11.3% LEASING SPREADS >$10,000sqm SPECIALTY SALES PRODUCTIVITY 100.0% 560 INDUSTRIAL RESIDENTIAL OCCUPANCY 2 SETTLEMENTS 6.8yrs WALE 3 $2.1bn PRE SALES 1. All metrics as a
Slide 6: Transitioning for the Future
Work Reimagined — October 2018 TRANSITIONING FOR THE FUTURE For personal use only ALLOCATION OF CAPITAL ACCELERATION IN PASSIVE EARNINGS GROWTH $12.0bn 6.0% >$12bn1 5.0% 5.0 $10.0 4.0 15- 18 $10.1bn Passive % CAGR FY capital 3.0 10 $9.2bn 86% 8.0 2.0 $8.0bn Passive 1.0% $7.5bn capital 1.0 6.0 83% 0.
Slide 7: Office Strategy
OFFICE For personal use only STRATEGY Campbell Hanan Head of Office & Industrial
Slide 8: Creating Modern Office Assets and Recurring Income in Gateway Cities
Work Reimagined — October 2018 CREATING MODERN OFFICE ASSETS AND RECURRING INCOME IN GATEWAY CITIES For personal use only Developing institutional grade assets Leveraging our integrated across key capital cities with Sydney management and and Melbourne a core focus development capabilities CREATE TO
Slide 9: Transformation in Office Portfolio Composition
Work Reimagined — October 2018 TRANSFORMATION IN OFFICE PORTFOLIO COMPOSITION For personal use only 2013 2018 GEOGRAPHIC DIVERSIFICATION 4 GEOGRAPHIC DIVERSIFICATION 4 Core Sydney 50% Core Sydney 58% & Melbourne 11% & Melbourne 26% Suburban 18% Suburban 0% Sydney & Sydney & Melbourne Melbourne Canbe
Slide 10: Office Portfolio Transition Now Accelerating
Work Reimagined — October 2018 OFFICE PORTFOLIO TRANSITION NOW ACCELERATING For personal use only DIVESTMENTS OFFICE NOI DEVELOPMENTS 38 SYDNEY AVE $320m 8 CHIFLEY SQUARE 2 RIVERSIDE QUAY 310 +$95m 300 of potential additional annual NOI Created 6 17 by FY23 2 >$ . bn new assets valued 12 290 Office
Slide 11: Office Market Outlook
OFFICE For personal use only MARKET OUTLOOK Alexandra Gray Head of Research
Slide 12: Sydney and Melbourne — Fast Growing with Strong Levels of Global Talent
Work Reimagined — October 2018 SYDNEY AND MELBOURNE — FAST GROWING WITH STRONG LEVELS OF GLOBAL TALENT For personal use only INDEX OF POPULATION GROWTH FORECASTS — SELECT MAJOR CITIES GLOBAL TALENT IN AUSTRALIAN CAPITAL CITIES BY CATEGORY 160 Index: 2010–100 160,000 people Melbourne 150 140,000 Sydn
Slide 13: High-Value Clusters Positioned to Capture Growth in Knowledge Economy Jobs
Work Reimagined — October 2018 HIGH-VALUE CLUSTERS POSITIONED TO CAPTURE GROWTH IN KNOWLEDGE ECONOMY JOBS For personal use only KNOWLEDGE JOBS GREATEST IN SYDNEY CBD SHARE OF KNOWLEDGE JOBS IN NSW ECONOMY 2015–2036 4.7m jobs >1 million 3.7m jobs knowledge intensive 61% 1 2 assets jobs forecast over
Slide 14: Invested in the Deepest Markets & Underweight Market Volatility
Work Reimagined — October 2018 INVESTED IN THE DEEPEST MARKETS & UNDERWEIGHT MARKET VOLATILITY For personal use only SYDNEY & MELBOURNE INCREASING CONTRIBUTION TO AUSTRALIAN GDP GROWTH AVERAGE ANNUAL NET EFFECTIVE RENT GROWTH 1995-2018 vs VOLATILITY 120% 30% 100 25 23% 42% 80 20 60 19% 27% 15 11% 40
Slide 15: Historical Trends in Rental Spreads
Work Reimagined — October 2018 HISTORICAL TRENDS IN RENTAL SPREADS For personal use only SYDNEY CBD vs METRO — NET EFFECTIVE RENT SPREAD MELBOURNE CBD vs METRO — NET EFFECTIVE RENT SPREAD $500/sqm $500/sqm 400 400 300 300 200 200 100 100 0 0 -100 -100 1988 1990 1992 1994 1996 1998 2000 2002 2004 200
Slide 16: Sydney Office — Low Vacancy and Limited Supply
Work Reimagined — October 2018 SYDNEY OFFICE — LOW VACANCY AND LIMITED SUPPLY For personal use only SYDNEY CBD — MARKET BALANCE 200,000 sqm Vacancy 15% 51% 150,000 12% of assets 100,000 under construction 9% pre-committed 50,000 6% 0 3% -50,000 0% -100,000 -3% -150,000 -200,000 -6% FY04 FY05 FY06 FY
Slide 17: Melbourne Office — Strong Tenant Demand
Work Reimagined — October 2018 MELBOURNE OFFICE — STRONG TENANT DEMAND For personal use only MELBOURNE CBD — MARKET BALANCE 250,000 sqm Vacancy 15% 200,000 12% 72% of assets under construction 9% pre-committed 150,000 6% 100,000 3% 50,000 0% 0 -3% -50,000 -6% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Slide 18: Create to Core
CREATE TO CORE For personal use only Simon Healy General Manager, Commercial Development
Slide 19: Redefining Premium — Olderfleet (477 Collins Street, Melbourne)
Work Reimagined — October 2018 REDEFINING PREMIUM — OLDERFLEET (477 COLLINS STREET, MELBOURNE) For personal use only Artist Impression Artist Impression Artist Impression Artist Impression 17
Slide 20: One of Australia's Largest & Most Active Office Developers
Work Reimagined — October 2018 ONE OF AUSTRALIA’S LARGEST & MOST ACTIVE OFFICE DEVELOPERS For personal use only 115,000 sqm 477 Collins St 105,000 MEL 95,000 RSQ Retail 85,000 MEL 75,000 275 Kent St SYD 65,000 Bldg 2 ATP 80 Ann St 55,000 SYD BRIS 2 RSQ MEL 45,000 699 Bourke St MEL 367 Collins St 101
Slide 21: Proven Office Development Track Record
Work Reimagined — October 2018 PROVEN OFFICE DEVELOPMENT TRACK RECORD For personal use only 8 CHIFLEY SQUARE, SYD 699 BOURKE STREET, MEL DMJC ,1 PERTH 2 RIVERSIDE QUAY, MEL 200 GEORGE STREET, SYD 664 COLLINS STREET, MEL Future development pipeline 2 $4.4bn 2013 2015 2016 2018 >> Grade: Premium >> Gr
Slide 22: Best in Class Developments
Work Reimagined — October 2018 BEST IN CLASS DEVELOPMENTS For personal use only 8 CHIFLEY SQUARE 200 GEORGE STREET SYDNEY SYDNEY 27 30 Awards and Awards and > PCA 2015 BEST OFFICE DEVELOPMENT OF THE YEAR Commendations > PCA 2018 BEST OFFICE DEVELOPMENT OF THE YEAR Commendations > PCA 2015 BEST SUSTA
Slide 23: Benefiting from an Integrated Development Model
Work Reimagined — October 2018 BENEFITING FROM AN INTEGRATED DEVELOPMENT MODEL For personal use only CONSTRUCTION DESIGN MANAGEMENT LEASING SITE PLANNING CAPITAL ACQUISITION DESIGN APPROVAL LEGAL / TAX DEVELOPMENT ASSET SERVICES LEASING PARTNERING CONSTRUCTION HANDOVER WORKPLACE CAPITAL EXPERIENCES
Slide 24: Capital Partnerships — Mirvac, the Right Partner
Work Reimagined — October 2018 CAPITAL PARTNERSHIPS — MIRVAC, THE RIGHT PARTNER For personal use only >> Long history of successful capital partnerships delivering over $2.5 billion STRONG RETURNS of prime grade office assets since 2012 50% 9.0% >> Mirvac manages many assets and funds on behalf of i
Slide 25: Integrated Model Creating Value — Case Study Collins Street, Melbourne
Work Reimagined — October 2018 INTEGRATED MODEL CREATING VALUE — CASE STUDY 664 COLLINS STREET, MELBOURNE For personal use only Maximise >> Built by Mirvac, new asset, strong cashflow, 6 STAR income low maintenance capex GREEN STAR & 5 STAR NABERS De-risk leasing >> Secured major tenant in Pitcher P
Slide 26: Highly Visible Office Development Pipeline
Work Reimagined — October 2018 HIGHLY VISIBLE OFFICE DEVELOPMENT PIPELINE For personal use only ATP, SOUTH EVELEIGH LOCOMOTIVE WORKSHOP 383 LATROBE STREET SOUTH EVELEIGH MELBOURNE ~$1.4bn 1 uncommitted development pipeline Artist Impression ~$3bn1 Artist Impression Artist Impression committed develo
Slide 27: A People First Approach to Development — Ann Street, Brisbane
Work Reimagined — October 2018 A PEOPLE FIRST APPROACH TO DEVELOPMENT — 80 ANN STREET, BRISBANE (VIDEO) For personal use only Artist Impression Artist Impression Artist Impression 25
Slide 28: Office Portfolio of the Future
OFFICE For personal use only PORTFOLIO OF THE FUTURE Paul Edwards General Manager, Workplace Experiences
Slide 29: Shaping the Future of Work
Work Reimagined — October 2018 SHAPING THE FUTURE OF WORK For personal use only People Technology Place Changing Speed of Flexible New workforce change space real estate entrants Space as Mobility a service Intelligent Millennials Demographics infrastructure Data (5G) analytics Placemaking Access no
Slide 30: Customer Challenges
Work Reimagined — October 2018 CUSTOMER CHALLENGES For personal use only Customer-centric research Workplace Summit Mirvac undertook over 60 customer interviews which identified over Feedback provided by over 500 customers at 3 separate 50 Jobs To Be Done from which we prioritised four key challenge
Slide 31: Adapting to a Fast Changing Workplace
Work Reimagined — October 2018 ADAPTING TO A FAST CHANGING WORKPLACE For personal use only >> Creating a new flexible space building to meet the needs of our customers for expansion and contraction, a mobile workforce, increasing freelance workforce, agile working, co-working and changing use of spa
Slide 32: Solving Customer Problems
Work Reimagined — October 2018 SOLVING CUSTOMER PROBLEMS For personal use only SPACE MOVE TECH VIRTUAL FLEXIBLE BRICK ADVISORY CHAMPION ECOSYSTEM NETWORKS SPACE AND BEAM Helping customers Improving the whole Enable a thriving and Using AR/VR to develop Developing a solution Creating new to understan
Slide 33: Hoist — Co-working by Mirvac
Work Reimagined — October 2018 HOIST — CO-WORKING BY MIRVAC For personal use only Hoist brings together start-ups, corporate partners, incubators, and experts to create an ecosystem of collaboration and growth >> Currently located at ATP, South Eveleigh, occupied by 12 companies >> Relocating and ex
Slide 34: Work Reimagined
WORK For personal use only REIMAGINED Campbell Hanan Head of Office & Industrial
Slide 35: Work Reimagined
Work Reimagined — October 2018 WORK REIMAGINED For personal use only >> >80% weight to >> >80% portfolio developed Sydney/Melbourne by Mirvac >> CBD and fringe focus >> Maintain young portfolio >> Mixed use precincts GEOGRAPHY MODERN >> Maintain life-cycle QUALITY ASSETS refurbishment spend >> 5 yea
Slide 36: Building Resilient Recurring Income
Work Reimagined — October 2018 BUILDING RESILIENT RECURRING INCOME For personal use only ADDITIONAL HIGH-QUALITY INCOME FROM OFFICE & INDUSTRIAL DEVELOPMENTS 1 $3.1bn ACTIVE DEVELOPMENT PIPELINE NOI GROWTH 100 ($m) NOI 66% ~$95m 90 committed potential additional annual NOI by FY23 from FY19 from act
Slide 37: Office Strategy and Team Set to Deliver
Work Reimagined — October 2018 OFFICE STRATEGY AND TEAM SET TO DELIVER For personal use only >> Committed to the largest office markets of Sydney and Melbourne >> Opportunistic investment into Brisbane, Sydney fringe and Parramatta 89% 2018 office employee >> Build to core strategy, integrated deliv
Slide 38: Q&A Panel
Work Reimagined — October 2018 Q&A PANEL For personal use only CAMPBELL HANAN ALEXANDRA GRAY SIMON HEALY PAUL EDWARDS ANDREW BUTLER GREG KERR VICTORIA TAVENDALE Head of Head of Research General Manager, General Manager, Group Executive General Manager, General Manager, Office & Industrial Commercial
Slide 39: Appendix
Investor Update — October 2018 APPENDIX For personal use only Australian Technology Park South Eveleigh
Slide 40: Australian Technology Park, South Eveleigh — History
Work Reimagined — October 2018 AUSTRALIAN TECHNOLOGY PARK For personal use only SOUTH EVELEIGH HISTORY >> In November 2015, Mirvac entered into an agreement with AMP Capital Wholesale Office Fund and AMP Capital separate account client, SunSuper, for the purchase of a one-third interest each in the
Slide 41: Australian Technology Park, South Eveleigh
For personal use only AUSTRALIAN TECHNOLOGY PARK SOUTH EVELEIGH Artist Impression 39
Slide 42: Australian Technology Park — Project Update
Work Reimagined — October 2018 AUSTRALIAN TECHNOLOGY PARK For personal use only SOUTH EVELEIGH PROJECT UPDATE >> Building 1 construction continues with the atrium glazing complete and the building 100% Acquisition date April 2016 water tight. Fitout finishes and services continue on all floors and w
Slide 43: Building
BUILDING 1 For personal use only 41 Artist Impression Artist Impression
Slide 44: Building
BUILDING 2 For personal use only Artist Impression 42 Artist Impression Artist Impression
Slide 45: Building
BUILDING 3 For personal use only Artist Impression 43 Artist Impression Artist Impression
Slide 46: Integrated Fitout
INTEGRATED FITOUT For personal use only Artist Impression 44 Artist Impression Artist Impression
Slide 47: Integrated Fitout
For personal use only INTEGRATED FITOUT 45 Artist Impression
Slide 48: Locomotive Workshops, South Eveleigh — Project Update
Work Reimagined — October 2018 LOCOMOTIVE WORKSHOPS For personal use only SOUTH EVELEIGH PROJECT UPDATE Acquisition date April 2016 Ownership 100% Mirvac Area 22,400sqm % pre-leased 0% Target completion FY21 Expected development $358m value on completion Estimated cost to complete $319m Estimated yi
Slide 49: Locomotive Workshops, South Eveleigh
For personal use only Artist Impression Artist Impression LOCOMOTIVE WORKSHOPS SOUTH EVELEIGH 47 Artist Impression Artist Impression
Slide 50: Harold Park & Tramsheds Sydney
Work Reimagined — October 2018 HAROLD PARK & TRAMSHEDS SYDNEY For personal use only Harold Park is located in the inner-city of Sydney, approximately 2.5 kilometres from Sydney’s CBD and lies within close proximity to the light rail, major bus routes, Sydney harbour and two of Sydney’s largest unive
Slide 51: Important Notice
Work Reimagined — October 2018 IMPORTANT NOTICE For personal use only Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust (ARSN 086 780 645). An investment in Mirvac stapled securities is subject to investment and other known and unknown risks, some of This presentat
Slide 52: Thank You
For personal use only THANK YOU