Mirvac Group · ASX:MGR
Mirvac — FY2010 Earnings Presentation
34 slides from Mirvac's earnings presentation, Aug 24, 2010
Slide 1: Results by Mirvac, 24 August 2010
results by mirvac 24 august 2010 Artist impression of 8 Chifley Square, Sydney, NSW
Slide 2: Disclaimer and Important Notice
DISCLAIMER AND IMPORTANT NOTICE Mirvac Group comprises Mirvac Limited ABN 92 003 280 699 and Mirvac This Presentation contains certain “forward looking” statements. The words Property Trust ARSN 086 780 645. This presentation and the annexures thereto “anticipated”, “expected”, “projections”, “forec
Slide 3: Agenda
agenda GROUP STRATEGY KEY FY10 ACHIEVEMENTS financial RESULTS INVESTMENT DEVELOPMENT SUMMARY & Guidance MIRVAC FY10 results presentation 24 august 2010 page 2
Slide 4: Group Strategy
GROUP STRATEGY 80% Operating NPAT through cycle target 20% Operating NPAT through cycle target Mirvac Property Trust development Target unlevered 10 year Internal Rate of Return Target unlevered average (“IRR”) of >11% project IRR of >18% > Focus on large, masterplanned > Maximise property income gr
Slide 5: Key FY10 Strategic Achievements
KEY FY10 STRATEGIC ACHIEVEMENTS > Execution of strategy > Upgrade of quality > Positioned for growth Mergers and acquisitions Mirvac Real Estate Investment Trust (“MREIT”) acquisition in December 2009 > $915m acquisition of a diversified Australian investment portfolio at 9.3% 1 yield > Increased re
Slide 6: Key FY10 Strategic Achievements
KEY FY10 STRATEGIC ACHIEVEMENTS Investment Division Repositioned and upgraded portfolio quality through acquisitions and selective divestments 1 > $235m non-aligned asset sales at 3.4% premium to book value Activated full refurbishment at 10-20 Bond St, Sydney, NSW (office) > Projected yield of 7.8%
Slide 7: Financial Results
financial results justin mitchell, CFO Artist impression of refurbishment of 10–20 Bond Street, Sydney, NSW MIRVAC FY10 results presentation 24 august 2010 page 6
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS FY10 ($m) Net profit attributable to the stapled securityholders 234.7 Specific non-cash items, including: 162.3 1 Net losses from fair value of: > Investment properties (including impact of adopting AASB 140 — investment properties under construction, previously held at cost) >
Slide 9: Core Divisions: Investment & Development
2 core divisions investment & development Investment 1 FY10 FY09 % Change Operating profit before tax $325.1m $237.9m 36.7% Operating EBIT 2 $298.9m $245.6m 21.8% Portfolio value $5,787.7m 3 $3,689.9m 56.9% Development Operating profit before tax $20.1m $29.1m (30.9%) Operating EBIT 2 $45.3m $73.0m
Slide 10: Hotel Management & Investment Management
hotel management & investment management Hotel Management FY10 FY09 % Change Operating profit before tax $11.6m $13.7m (15.3%) Operating EBIT 1 $11.4m $13.3m (14.3%) Average room rate $168 $177 (5.1%) Occupancy rate 74% 73% 1.4% Investment Management 2 Operating loss before tax ($7.8m) ($37.5m) 79.2
Slide 11: Debt
DEBT Debt strategy > Continue to diversify sources of debt capital and extend maturity profile > Issued $150m 5 year MTN at 265 basis points (>2x over subscribed) > MTN issuance program will continue over next 12 to 18 months > Refinance June 2011 bank facility with option to refinance January 2012
Slide 12: Strong Liquidity Post WOT
strong LIQUIDITY POST WOT Available liquidity of $698m post WOT transaction comfortably within target range Facility Limit Drawn Amount Available Liquidity As at 30 June 2010 ($m) ($m) ($m) September 2010 — MTN 200.0 200.0 0.0 February 2011 — Non recourse fund debt 200.0 200.0 0.0 June 2011 — Bank 1
Slide 13: Investment
INVESTMENT Andrew Butler, CEO investment 275 Kent Street, Sydney, NSW MIRVAC FY10 results presentation 24 august 2010 page 12
Slide 14: Mirvac's Investment Division
MIRVAC’S INVESTMENT DIVISION Competitive advantage in integrated model development LEASING & PROPERTY Facilities Investment ACQUISITION capability MARKETING MANAGEMENT MANAGEMENT MANAGEMENT Investment Division (MPT) core competencies: > Active portfolio management providing property income growth an
Slide 15: Investment Market Update
investment Market update State of the investment markets Office Weighting Forecast Rent growth is visible in the Melbourne CBD, static in Sydney while Brisbane is close to the bottom of the cycle. Prime asset values are appreciating in 56.6% Melbourne and Sydney, Canberra is still experiencing some
Slide 16: Portfolio Highlights
PORTFOLIO HIGHLIGHTS FY10 FY10 FY11 CPI > Solid FY10 like-for-like net income growth of 3.7% Occupancy Like-for-like & fixed reviews Sector post WOT income growth post WOT > 96.0% of FY11 rent reviews CPI or fixed > High portfolio occupancy rate of 97.6% Office 97.5% 4.0% 97.7% > 76.6% of income der
Slide 17: Transformation of MPT
Transformation of MPT > Grown recurring income > 56.9% increase in portfolio value since 30 June 2009 — $915m acquisition of MREIT — $1,137m acquisition of WOT > Completed $235m of non-aligned asset sales at 3.4% 1 premium to book value of which $105m were MREIT sales at a 3.3% premium Significant q
Slide 18: Reactivated Commercial Development Pipeline
reactivated COMMERCIAL DEVELOPMENT PIPELINE $1,208m pipeline of Australian institutional grade real estate, undertaken in-house by Mirvac Development FY10 commercial development pipeline 1 Project (Ownership) Type Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 10-20 Bond Street $60m, 7.8% Sydney, NSW (50
Slide 19: Hotel Management
HOTEL MANAGEMENT > Hotels under management increased to 46 > Operating performance: — Occupancy 74% — Average room rate $168 — RevPAR growth (3.9%) > Recovering corporate, conference and international travel combined with limited supply are positive drivers for the hotel sector over the medium term
Slide 20: Investment Strategy
investment strategy > Execution of strategy > Upgrade of quality > Positioned for growth MIRVAC FY10 results presentation 24 august 2010 page 19
Slide 21: Development
DEVELOPMENT Brett Draffen, CEO Development Artist impression of beachside Leighton, Leighton, WA MIRVAC FY10 results presentation 24 august 2010 page 20
Slide 22: Mirvac's Development Division
MIRVAC’S development DIVISION Competitive advantage of fully integrated model sales & ACQUISITION design development construction marketing FY10 Target FY10 Achievement Commence residential projects to meet >7 projects fast-tracked, 3 successfully released to market expected demand in FY11 and beyon
Slide 23: FY10 Settlements
FY10 Settlements FY10 highlights 1,805 lot settlements consisting of: 100% owned 37% > 1,805 lots settled, a 14.7% increase on FY09 MWRDP 32% Project development agreements 22% > Gross margin 17.6% excluding zero margin Joint Ventures 9% settlements (1H10: 16.2%) > NSW Homes made up 33.2% of settlem
Slide 24: Mirvac Buyer Profile
mirvac BUYER PROFILE Mirvac’s FY10 settlements Investor and non first home buyers (“FHB”) more resilient > 74% upgraders/empty nesters and investors > 90% of purchases by FHB involve a mortgage. > Mirvac average price: For repeat buyers, only around 65% of housing — House $594,000 1 sales involve a
Slide 25: Residential Market Outlook
Residential Market outlook Annual price growth appears to be moderating to single digits. However new housing starts are still substantially below underlying demand and fundamentals remain positive. NSW Current Forecast Improved affordability on the back of fiscal stimulus has seen a buoyant Sydney
Slide 26: FY11 Outlook
FY11 outlook Mirvac’s position as Australia’s pre-eminent residential developer is evidenced by $802m 1 ($704m as at 30 June 2010) of exchanged residential pre-sales contracts > 60.8% of total forecast FY11 residential revenue secured by pre-sales FY11 major contributors % FY11 EBIT Revenue Project
Slide 27: Fast-tracked Projects
Fast-tracked projects Net Revenue 1 Released Division Project Stage Ownership Settlement Year Lots $m VIC Harcrest Stage 1 20% FY12 63 5.8 4 NSW Rhodes Waterside Elinya 20% FY12 107 13.3 NSW Rhodes Waterside Kiewa 20% FY12 111 15.2 NSW Rhodes Waterside Alkira 20% FY13 145 16.2 4 QLD Waterfront Newst
Slide 28: Our Markets
our markets Sector Description Sub-market Example developments Residential Masterplanned Communities > First home buyers > Land subdivision > 2nd/3rd home buyers > Completed housing 1 > Investor > Packaged housing 2 > Typical price range: > Land $170K — $300K > Housing $350K — $600K Gainsborough gre
Slide 29: Residential Development Pipeline
residential development pipeline Exisiting pipeline major contributors – over 10,500 lots in 5 years FY11 FY12 FY13 FY14 FY15 apartment Revenue $2,231m 1 to be supplemented lots: 2,585 by new acquisitions integrated Revenue $1,268m 1 to be supplemented housing lots: 2,949 by new acquisitions masterp
Slide 30: Development Acquisition Strategy
development acquisition strategy Development Acquisition Strategy: > Capital requirement driven by expeditious completion of impaired projects and re-allocation of funds from Investment asset sales > Redeploy funds to higher return projects > Acquire sites within strategy and hurdle rate > Remain di
Slide 31: Summary & Guidance
SUMMARY & guidance Artist impression of Yarra’s edge riverfront homes, docklands, vic MIRVAC FY10 results presentation 24 august 2010 page 30
Slide 32: Summary
SUMMARY > Execution of strategy > Upgrade of quality > Positioned for growth MIRVAC FY10 results presentation 24 august 2010 page 31
Slide 33: Guidance
GUIDANCE Guidance FY11 Group operating NPAT $350 — $365m Operating earnings per security 10.2 — 10.6 cpss 1 Implied earnings growth 9.7% — 14.0% Distribution per security 8.0 – 9.0 cpss 1 Weighted average securities 3,432.4m 1) Cents per stapled security. MIRVAC FY10 results presentation 24 august 2
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