Mirvac Group · ASX:MGR
Mirvac — Investor Presentation (May 2011)
36 slides from Mirvac's investor presentation, May 17, 2011
Slide 1: Development by Mirvac
development For personal use only by mirvac 17 MAY 2011 era pacific place, chatswood, nsw
Slide 2: Agenda
agenda For personal use only Introduction Nicholas Collishaw, Managing Director Development Strategy Presentation Brett Draffen, CEO Development David Rees, Head of Research and Residential Market Update Consulting, Jones Lang LaSalle NSW residential asset tour > 71 Macquarie Street, CBD > ERA, Paci
Slide 3: Agenda
agenda For personal use only 1 Mirvac’s Development Business > Residential > Commercial 2 Impaired inventory update 3 Drivers to 2014 MIRVAC development 17 May 2011 page 2
Slide 4: Mirvac's Development Business
For personal use only mirvac’s development Business MIRVAC development 17 May 2011 page 3
Slide 5: Mirvac's development business: integrated platform with a 39 year history
mirvac’s development Business For personal use only An integrated development platform with a 39 year history Residential Development High Density = Apartments Low Density = Houses and Land 80 %1 Commercial Development Office, Industrial, Retail 20 %1 Mirvac’s Development business is focussed on dri
Slide 6: Strengths of Mirvac's residential and commercial development business
For personal use only strengths of mirvac’s residential and commercial development business MIRVAC development 17 May 2011 page 5
Slide 7: Enhanced returns from integrated platform
mirvac’s development Business personal use only Enhanced returns from integrated platform sales & ACQUISITION design development construction marketing / leasing > Intellectual property retained internally > Standardisation to lower costs > Full process control allows adaptability and accurate costi
Slide 8: Variety of capital efficient structures
mirvac’s development Business personal use only Variety of capital efficient structures: Wholesale Definition Capital partnership with small number of investors for development, with development delivery by Mirvac provided for fees and share in equity profits Partnerships Benefits Improved ROA, fees
Slide 9: Rigorous acquisition process reduces risk
mirvac’s development Business personal use only Rigorous acquisition process reduces risk: > Multi stage review process New Business Team SUBMITTED State CEO & National CEO IF REJECTED > Feasibility studies not reliant high level review on price escalation IF APPROVED Mirvac’s Strengths National Pro
Slide 10: Acquisitions illustrate rigorous process
mirvac’s development Business personal use only Acquisitions illustrate rigorous process: Settlements Project Location Type Lots from Why is this a good acquisition for development? Harold Park NSW Apartment 1,250 FY14 > Unique major infill development opportunity > Iconic inner city site > FY14 set
Slide 11: 80% residential = apartments, houses and land
For personal use only 80% residential = apartments, Houses and land MIRVAC development 17 May 2011 page 10
Slide 12: Strengths of Mirvac's residential development business
For personal use only strengths of mirvac’s residential development business MIRVAC development 17 May 2011 page 11
Slide 13: Residential development: superior brand leveraged
residential development personal use only Superior brand leveraged $ Higher pre- Price Repeat sales premium customers achieved Mirvac’s Strengths Ability to drive returns in a flat macro market > Better access to capital > National procurement > Brand drives pre-sales and price premium > Increased m
Slide 14: Residential development: geographic diversity and settlement management
residential development personal use only Geographic diversity 1 Short term skew to NSW FY12 FY13 FY14 FY15 NSW QLD VIC WA Mirvac’s Strengths settlement management > Robust sales contracts from 39 years of experience > Default rates average 3% medium term > Contracts “full recourse” and unconditiona
Slide 15: High density = apartments
For personal use only high density = apartments MIRVAC development 17 May 2011 page 14
Slide 16: Residential development: high density profile
residential development High Density = Apartments For personal use only Profile of high density > High barriers to entry Generic Profile — Single Stage, 200 Unit Apartment Month 35 Month 6 Month 12 Month 15 Practical > Acceptable risk DA Submitted DA Approved Construction Commences Completion return
Slide 17: High density apartments: strengths
residential development High Density = Apartments personal use only Strict location criteria Capital city focus Generational projects Multi stage – product adaptation and overhead savings Planning Planning visibility sought pre acquisition Mirvac’s Strengths Specialised skill set Strong track record
Slide 18: High density: less competition and pre-sales
residential development High Density = Apartments personal use only Less Competition Exit of peers Pre-sales > Brand — 39 year track record > Construction subject to internal pre-sales limits > Strong customer network – VIP Database Mirvac’s Strengths Presales — Historic 10yr Profile $1.4bn $1.2 $1.
Slide 19: Case Study: High density, ERA Pacific Place, Chatswood
Case Study — High density For personal use only ERA, Pacific Place, Chatswood, nsw Project detail: Site acquired > December 2000 Delivered > 42 story building containing 295 apartments, 4,900sqm of office space Timing > Construction period of three years beginning in July 2011 Forecast project IRR >
Slide 20: Low density = houses and land
For personal use only low density = houses and land MIRVAC development 17 May 2011 page 19
Slide 21: Residential development: low density profile
residential development Low Density = Houses and Land For personal use only Profile of low density > Lower capital commitment Generic Profile - Multi Stage, 1,000 Lot Masterplanned Community Month 6 Month 24 Month 36 > Smoother earnings 80.0% DA Submitted DA Approved First Settlement > Delivery less
Slide 22: Low density houses and land: strengths
residential development Low Density = Houses and Land personal use only key stakeholder Acquisitions and planning Relationships Planning experience In-house through Mirvac Design House design capability > Smaller lots rely on House and Land packaged solution Mirvac’s Strengths > Greater yield per si
Slide 23: Case Study: Low density, Middleton Grange
Case Study — Low density For personal use only middleton grange, NSW Project detail: Site acquired > PDA agreed with Landcom in September 2007 > Site purchased outright from Landcom in December 2010 Delivered > Approximately 474 lots in 6 Stages — Land, House and land packages and speculative produc
Slide 24: Combining high and low density projects
Combining High + Low Density Projects personal use only Diversification > Different demand drivers across products — High Density: Government requires supply from urban high density urban supply to meet population growth — Low Density: First home buyers and upgraders balance cash flows Long lead tim
Slide 25: Commercial development
Commercial development For personal use only 20% Office retail industrial MIRVAC development 17 May 2011 page 24
Slide 26: Profile of commercial development
Commercial development For personal use only Profile of commercial development Office > Mid to high rise, predominantly CBD locations > Complex skill set > Longer time to delivery > Capital intensive > Pre-sale/lease to de-risk Example: 8 Chifley Square, NSW; Old Treasury Building, WA Retail > Oppor
Slide 27: Commercial development: Mirvac's strengths
Commercial development personal use only > Commercial developments delivered at cost to MPT > Part share asset sell down provides earnings to Development Division Mirvac’s strengths Integrated model benefits > Rapid and efficient response to opportunities and market demands Mirvac’s Strengths > Full
Slide 28: Case Study: Commercial development, Hoxton Distribution Centre
Case Study — Commercial development For personal use only Hoxton Distribution Centre, NSW Project detail Site acquired > Acquired former Hoxton Park Airport in July 2010 Deliverables > Circa 140,000 sqm of industrial space and houses two major distribution centres > 100 per cent pre-leased to Woolwo
Slide 29: Impaired inventory update
For personal use only impaired inventory update MIRVAC development 17 May 2011 page 28
Slide 30: Impaired inventory update
Impaired inventory update For personal use only Progress of Englobo sales ahead of schedule: Project Target sales dates Update Dianella, WA June 2011 On track — terms agreed, sales date in line with forecast Magenta Shores, NSW September 2011 On track — terms agreed, sales date in line with forecast
Slide 31: Drivers to 2014
For personal use only drivers to 2014 MIRVAC development 17 May 2011 page 30
Slide 32: Drivers to 2014: impact of recent acquisitions
Drivers to 2014 For personal use only impact of recent acquisitions: > New acquisitions will provide material incremental impact on FY14 returns 5 Year Net Inventory Profile $1.4bn $1.2 Average Margin 18%-22% Now includes 2H11 acquisitions: $1.0 Chatswood, Eastern Golf Club, Old Treasury $0.8 $0.6 $
Slide 33: Drivers to 2014
Drivers to 2014 For personal use only 2008 – 2010 2011 – 2012 2013 Process improvement Transition Deliver sustainable earnings growth > $40m overhead cost savings > Acquisitions recommence > Significant apartment > Centralise Mirvac Design > Englobo sales + build out completions: Chatswood, > Furthe
Slide 34: Summary
summary For personal use only > Integrated platform allows flexibility and adaptability > Superior brand delivers pre-sales = Right model > Diversified across geography, product and capital structure > Very strong pre-sales — $1.1bn > Acquisitions and portfolio profile deliver for FY14 = sustainable
Slide 35: Disclaimer and Important Notice
DISCLAIMER AND IMPORTANT NOTICE For personal use only Mirvac Group comprises Mirvac Limited ABN 92 003 280 699 and Mirvac Property This Presentation contains certain “forward looking” statements. The words Trust ARSN 086 780 645. This presentation (“Presentation”) has been prepared “anticipated”, “e
Slide 36: Questions
For personal use only Questions