Mirvac Group · ASX:MGR
Mirvac — CLSA Investors' Forum 2010
30 slides from Mirvac's conference presentation, Sep 16, 2010
Slide 1: CLSA Investors' Forum 2010
CLSA Investors' Forum 2010 September 16 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 Who is mirvac group GROUP STRATEGY KEY FY10 ACHIEVEMENTS DEVELOPMENT INVESTMENT FY10 Highlights + FY11 Guidance MIRVAC CLSA Investors’ Forum 2010 September 16 2010 page 2
Slide 4: Mirvac Group
mirvac group Mirvac group Founded 1972, listed 1987, stapled 1999 2 Core Divisions investment development $5.8 billion portfolio1 office residential 31 assets 21,578 lot pipeline Retail commercial 25 assets Selected opportunities industrial 17 assets other 4 assets hotel management investment manage
Slide 5: Mirvac Group
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Slide 6: Group Strategy
GROUP STRATEGY Yarra’s edge, melbourne, vic MIRVAC CLSA Investors’ Forum 2010 September 16 2010 page 5
Slide 7: Group Strategy
GROUP STRATEGY 80% Mirvac Property Trust Operating NPAT — through cycle target 20% corporation Operating NPAT — through cycle target MIRVAC CLSA Investors’ Forum 2010 September 16 2010 page 6
Slide 8: Group Strategy: Mirvac Property Trust
GROUP STRATEGY 80% Operating NPAT — through cycle target Mirvac Property Trust Target unlevered 10 year Internal Rate of Return (“IRR”) of >11% > Maximise property income growth and security > Maintain a diversified portfolio > Continue to improve quality of portfolio via disposal of non-aligned ass
Slide 9: Group Strategy: Development
GROUP STRATEGY 20% Operating NPAT — through cycle target development Target unlevered average project IRR of >18% > Focus on large, masterplanned or infill apartment, house and land projects > Actively pursue quality office, retail and industrial projects for Mirvac Property Trust and external parti
Slide 10: 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 11: 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 12: Development
DEVELOPMENT Artist impression of beachside Leighton, Leighton, WA MIRVAC CLSA Investors’ Forum 2010 September 16 2010 page 11
Slide 13: 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 14: 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 15: 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 16: Australian Affordability – Not at Critical Levels
australian affordability — not at critical levels > Influence of price growth and rate rises have changed the affordability environment, however remains reasonable, relative to historic levels Proportion of family income to meet loan repayments Comparison with previous peaks Period Proportion 50 % F
Slide 17: Australian Residential Market Outlook
australian 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 buoy
Slide 18: Mirvac FY11 Outlook
mirvac FY11 outlook Mirvac’s position as Australia’s pre-eminent built form 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 EBI
Slide 19: 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 20: Investment
INVESTMENT 275 Kent Street, Sydney, NSW MIRVAC CLSA Investors’ Forum 2010 September 16 2010 page 19
Slide 21: 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 22: Investment Market Update
investment Market update State of the Australian 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 experie
Slide 23: Commercial Expected to Outperform
Commercial expected to outperform Risk premiums to real bond yields > Current yields indicate that the office 700 bps Dec 07 Jun 10 15 year average sector is trading at a larger discount to 600 relative value compared to other sectors 500 > Yields expected to tighten for office 400 over the medium t
Slide 24: 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 25: Transformation of Mirvac Property Trust
Transformation of mirvac property trust > 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% pre
Slide 26: Mirvac Property Trust Portfolio Diversification
MIRVAC PROPERTY TRUST PORTFOLIO DIVERSIFICATION Sector diversification 1 Geographic diversification 2 Commercial 56.6% NSW 61.4% Industrial 7.2% VIC 14.8% Retail 30.8% QLD 14.9% Other 1.5% 3 ACT 8.0% Indirect Property Investments 3.9% SA 0.3% US 0.6% 1) By book value as at 30 June 2010. Excludes dev
Slide 27: 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 28: Financial Results
financial results Artist impression of refurbishment of 10–20 Bond Street, Sydney, NSW MIRVAC CLSA Investors’ Forum 2010 September 16 2010 page 27
Slide 29: FY10 Highlights & FY11 Guidance
FY10 Highlights & FY11 GUIDANCE > Execution of strategy > Upgrade of quality > Positioned for growth FY10 FY09 Group operating NPAT (profit before specific non-cash and significant items) 275.3 Operating EPS 1 9.3 cpss 4 13.4 cpss 4 Operating EPS guidance 1 9.2 cpss 4 13.4 cpss 4 Statutory EPS 2 8.0
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