Slide 1: FY07 Results Presentation
For personal use only FY07 Results Presentation 21 August 2007 FY07 Results Page 1
Slide 2: Agenda
Agenda For personal use only > Group overview > Financial performance > Divisional performance > Outlook & strategy FY07 Results Page 2
Slide 3: Mirvac platform delivers growth
Mirvac platform delivers growth For personal use only > Strong full year performance above market guidance > Restructured divisions into 2 integrated operating units: - Funds Management internal & external - Development: residential, commercial, retail and industrial > Recycling of capital delivered
Slide 4: Strong financial performance
Strong financial performance For personal use only $319.1m 32.97c $7.4bn $3.80 16.3% 4.2% 20.8% 12.5% Operating1 EPS1 Total NTA Profit Assets 1. Operating profit after tax excluding non-cash AIFRS adjustments. FY07 Results Page 4
Slide 5: Operational highlights
Operational highlights For personal use only > Acquired $1.124bn1 of assets from Walker and purchased a $328.3m1 hotel portfolio from Carlton Crest > External funds management: - established $655.5m of new wholesale funds - renewed AustralianSuper mandate through to June 2010 > Mirvac Property Trust
Slide 6: $26.3bn activities under control
$26.3bn activities under control For personal use only 1. Funds under management before adjusting for joint venture interests 2. Activities under control, including lots not held on balance sheet FY07 Results Page 6
Slide 7: Results: Strong earnings across integrated platform
For personal use only Justin Mitchell Results Strong earnings across integrated platform FY07 Results Page 7
Slide 8: Headline financial result
Headline financial result For personal use only FY07 FY06 Change Revenue $2,220.9m $1,806.0m 23.0% NPAT $556.1m $441.1m 26.1% EPS 58.65c 52.18c 12.4% NTA1 $3.80 $3.38 12.5% 1. NTA based on issued securities excluding EIS securities FY07 Results Page 8
Slide 9: Operating performance
Operating performance For personal use only FY07 % split FY06 % split Change Operating profit1 $319.1m $274.4m 16.3% EPS1 32.97c 31.64c 4.2% DPS 31.90c 31.00c 3.0% Divisional operating profit: Funds Management $267.3m 73% $207.6m 69% 28.7% Development $98.6m 27% $91.7m 31% 7.5% 1. Operating profit a
Slide 10: Internal Funds Management
Internal Funds Management1 For personal use only FY07 FY06 Change Net profit after tax $505.4m $339.0m 49.1% EBIT2 $288.0m $226.9m 26.9% Portfolio value $4.2bn $3.5bn 20.7% Net income growth (like for like) 3.7% 2.8% Gross revaluations3 $245.1m $180.2m 1. Includes MPT and MRES 2. EBIT excluding non-
Slide 11: External Funds Management
External Funds Management For personal use only FY07 FY06 Change Net profit after tax $24.0m $20.1m 19.6% EBIT1 $35.9m $29.8m 20.5% FUM2 $9.2bn $7.8bn 16.6% Hotels 42 27 55.6% Rooms 5,439 3,124 74.1% 1. EBIT excluding non-cash AIFRS items 2. FUM before adjusting for JV interests FY07 Results Page 11
Slide 12: Development
Development For personal use only FY07 FY06 Change Net profit after tax $98.6m $91.7m 7.5% EBIT1 $211.8m $203.0m 4.3% Settlements2 1,958 lots 2,463 lots Exchanged contracts $689m $730m EBIT margin on cost (residential)3 22% 21% 1. EBIT excluding non-cash AIFRS adjustments 2. Settlements exclude sale
Slide 13: Capital Management
For personal use only Tim Regan Capital Management FY07 Results Page 13
Slide 14: Capital management
Capital management For personal use only Jun 07 Jun 06 S&P rating BBB BBB Total interest bearing debt $2,552m $2,326m % hedged 79.6% 70.5% Weighted average hedge maturity 4.5 yrs 4.5 yrs Average borrowing rate1 6.79% 6.38% Gearing2 35.3% 38.0% 1. Includes margins & line fees. 2. Interest bearing lia
Slide 15: Debt maturity profile
Debt maturity profile For personal use only $m 800 Weighted average expiry: 4.2yrs 700 600 500 400 300 200 100 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 CMBS Bank MTN USPP As at 30 June 2007 FY07 Results Page 15
Slide 16: Funds Management
For personal use only Nick Collishaw Funds Management FY07 Results Page 16
Slide 17: Key achievements
Key achievements For personal use only Internal Management > MPT delivers $1.1bn growth through asset acquisitions, development completions, revaluations, co-investment in external funds > Re-balancing portfolio through $340.5m disposal of non-core assets External Management > 2 wholesale funds laun
Slide 18: For personal use only
For personal use only 1. Funds under management before adjusting for joint venture interests FY07 Results Page 18
Slide 19: Internal Funds Management: Principal investment realising growth
For personal use only Internal Funds Management Principal investment realising growth FY07 Results Page 19
Slide 20: Expanding stable earnings platform
Expanding stable earnings platform For personal use only $525m $(340)m $4,163m $287m $243m $3,449m 30 Jun 06 Revaluations Redevelopments & Acquisitions Disposals 30 Jun 07 Capex Mirvac Property Trust total portfolio value. FY07 Results Page 20
Slide 21: Sector diversification
Sector diversification1 For personal use only 1. By book value. Excludes development. 2. Other- includes hotels and parking. FY07 Results Page 21
Slide 22: MPT development pipeline
MPT development pipeline For personal use only No. of Area sqm Transfer value $m projects Commercial 0 0 0 Industrial 1 9,709 13 Retail 4 76,875 229 Completions 5 86,584 2421 Commercial 1 19,250 150 Industrial 2 47,650 46 Retail 3 58,244 133 Current 6 125,144 3292 Commercial 2 74,622 340 Industrial
Slide 23: External Funds Management
For personal use only External Funds Management Platform delivering growth through diversified funds FY07 Results Page 23
Slide 24: Expanding Mirvac's platform
Expanding Mirvac’s platform For personal use only $443m $9,160m $227m $193m $463m $7,834m 30 Jun 06 MWHF MWRDP MREIT Net movement in 30 Jun 07 other funds 1. Funds under management before adjusting for joint venture interests FY07 Results Page 24
Slide 25: External funds
External funds For personal use only 1. Funds under management before adjusting for joint venture interests. FY07 Results Page 25
Slide 26: Hotel Management
For personal use only Hotel Management FY07 Results Page 26
Slide 27: Delivering consistent growth
Delivering consistent growth For personal use only Average Room Rate $198 $184 $176 Number of Hotels under Management FY05 FY06 FY07 42 25 27 Rooms under Management FY05 FY06 FY07 5,439 2,750 3,124 FY05 FY06 FY07 FY07 Results Page 27
Slide 28: Diversified scale
Diversified scale For personal use only 1. By rooms at 30 June 2007. FY07 Results Page 28
Slide 29: Funds Management strategy
Funds Management strategy For personal use only > A suite of entities to satisfy investor needs and facilitate balance sheet activity > Expand retail product offerings > Cement existing investor relationships > Identify suitable international partners to expand Mirvac’s offer FY07 Results Page 29
Slide 30: Development: Re-stocking for future growth
For personal use only Adrian Fini Development Re-stocking for future growth FY07 Results Page 30
Slide 31: Key achievements
Key achievements For personal use only > Continued re-stocking with acquisitions of 11,903 residential lots and expanded non residential development pipeline to $1.9bn; - The Royal at Newcastle NSW - Leighton Beach WA - Gainsborough Greens QLD - Rockbank VIC - Walker non-residential developments > $
Slide 32: For personal use only
For personal use only 1. Activities under control including lots not held on balance sheet FY07 Results Page 32
Slide 33: Residential activities under control
Residential activities under control For personal use only FY07 Results Page 33
Slide 34: Residential pipeline: 29,016 lots under control
Residential pipeline- 29,016 lots under control For personal use only FY07 Results Page 34
Slide 35: Lot reconciliation
Lot reconciliation For personal use only 11,903 29,016 30,000 25,000 20,715 1,958 1,644 20,000 15,000 10,000 5,000 0 30 Jun 06 Settlements Options not proceeding / Acquisitions 30 Jun 07 changes to projected lots FY07 Results Page 35
Slide 36: Residential market outlook
Residential market outlook For personal use only > Underlying factors are positive - High immigration, low unemployment - Dwelling supply below underlying demand - Rental market tightened in all capital cities – rents rising - Investors and first home buyers returning to the market > Issues - Afford
Slide 37: Non-residential development pipeline
Non-residential development pipeline1 For personal use only No of projects Project value Commercial 5 $362m Industrial 8 $478m Retail 5 $291m Current2 18 $1,130m Commercial 2 $340m Industrial 5 $181m Retail 4 $219m Future 11 $741m Total current and future pipeline 29 $1,871m 1. Includes MPT developm
Slide 38: Divisional outlook
Divisional outlook For personal use only > $680m exchanged contracts > Re-stocking across all sectors > Continue to focus on major integrated developments > Residential pipeline strong > Expansion of commercial, industrial, retail and hotel continues > New projects released in FY08 across all market
Slide 39: Outlook and Group Strategy
For personal use only Greg Paramor Outlook and Group Strategy FY07 Results Page 39
Slide 40: The economy
The economy For personal use only > Economic outlook remains positive - growth to accelerate in FY08 - inflation pressures contained but need watching - labour markets extremely strong – recruitment strategies essential - business investment and construction activity will remain strong - housing con
Slide 41: Financial outlook
Financial outlook For personal use only > Repricing of risk: short-term pain for long-term gain - likelihood of further interest rate increases diminished in Australia - no flow- through to housing market from non-bank mortgage lender problems - decline in bond yields a positive for commercial secto
Slide 42: Group strategy
Group strategy For personal use only > Business well placed with resilient earnings and appropriate debt levels > Strong balance sheet capacity to manage risk and capitalise on opportunities > Further successful asset recycling – assets and development to Funds Management (Mirvac’s second balance sh
Slide 43: FY08 guidance
FY08 guidance For personal use only EPS 34.3 cents (+4%) DPS 32.9 cents (+3%) Composition: Funds Management 70-75% Development 25-30% FY07 Results Page 43
Slide 44: For personal use only
For personal use only FY07 Results Page 44
Slide 45: Annexures
For personal use only Annexures IMAGE TO BE UPDATED FY07 Results Page 45
Slide 46: FY07 AIFRS reconciliation
FY07 AIFRS reconciliation For personal use only $m INT FM EX FM HOT DEV CORP TOTAL NPAT (AIFRS) 505.4 17.2 6.8 98.6 (72.0) 556.1 Investment property revaluations (245.8) - - - 6.3 (239.5) Unrealised gains on financial instruments (38.7) - - - 14.2 (24.5) Expensing share based payments - - - - 2.3 2.
Slide 47: FY06 AIFRS reconciliation
FY06 AIFRS reconciliation For personal use only $m INT FM EX FM HOT DEV CORP TOTAL NPAT (AIFRS) 339.0 13.6 6.5 91.7 (9.7) 441.1 Investment property revaluations (151.8) - - - - (151.8) Unrealised gains on financial instruments - - - - (30.2) (30.2) Expensing share based payments - - - - 8.9 8.9 Depr
Slide 48: Interest reconciliation
Interest reconciliation For personal use only $m FY07 FY06 Net borrowing costs 167.5 166.7 Less: capitalised interest (75.2) (92.0) Capitalised interest expense to COGS 49.4 55.6 Borrowing costs amortised 5.4 4.6 Net interest expense 147.1 134.9 Intercompany loan (MPT to Mirvac Ltd) 900.0 830.0 FY07
Slide 49: Fixed interest maturity profile
Fixed interest maturity profile For personal use only $m 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 As at 30 June 2007 FY07 Results Page 49 Finance
Slide 50: Commercial overview
Commercial overview For personal use only Properties owned 22 NLA 356,151 sqm Asset value $1,639.3m Gross revaluation1 $145.2m Net income $116.3m Net income growth 1.6% (like for like) Occupancy 99.2% 1. Excluding OEI and includes joint ventures FY07 Results Page 50 Internal Funds Management- MPT
Slide 51: Commercial performance
Commercial performance For personal use only Leasing transactions 98,290sqm (27.6% of portfolio) Tenant rent reviews 221 (204,516 sqm) WALE 4.9 yrs Disposals $215.5m FY07 Results Page 51 Internal Funds Management- MPT
Slide 52: Commercial disposals
Commercial disposals For personal use only Book Disposal Proceeds $m value proceeds above BV1 9 Help Street, Chatswood, NSW 34.0 38.2 2.2 Lovett Tower, 13 Keltie Street, Woden, ACT 48.0 73.2 19.7 67 Albert Avenue, Chatswood, NSW 73.5 81.3 7.2 30 Cowper St, Parramatta, NSW 19.2 20.3 0.4 Norbery Terra
Slide 53: Commercial lease expiry
Commercial lease expiry For personal use only 40% 35% 30% 25% 20% lettable area sqm 15% 10% 5% 0% Vacant FY08 FY09 FY10 FY11 FY12 Beyond FY07 Results Page 53 Internal Funds Management- MPT
Slide 54: Commercial market
Commercial market For personal use only > Underlying demand strong – white collar employment growing above trend > Supply increasing in most markets but no threat to rental growth – ageing office stock and rising tenant aspirations implies high level of obsolescence in existing stock > CBD office ma
Slide 55: Industrial overview
Industrial overview For personal use only Properties owned 9 NLA 151,388 sqm Asset value $205.2m Gross revaluation1 $5.0m Net income $15.9m Net income growth 2.7% (like for like) Occupancy 87.2% 1. Excluding OEI and includes joint ventures FY07 Results Page 55 Internal Funds Management- MPT
Slide 56: Industrial performance
Industrial performance For personal use only Leasing transactions 20,209 sqm (13.3% of portfolio) Tenant rent reviews 24 (100,835 sqm) WALE 5.3 yrs Development completion $12.9m1 Nexus Industry Park EWR, Prestons, NSW Disposal $21.5m 20-30 Scrivener St, Warwick Farm, NSW 1. Development completion co
Slide 57: Industrial lease expiry
Industrial lease expiry For personal use only 50% 45% 40% 35% 30% 25% 20% lettable area sqm 15% 10% 5% 0% Vacant FY08 FY09 FY10 FY11 FY12 Beyond FY07 Results Page 57 Internal Funds Management- MPT
Slide 58: Industrial market
Industrial market For personal use only > Underlying drivers point to growth in demand for modern, well-located facilities – imports forecast to rise, stock-to-sales ratio in long-term decline, supply chain investment by retailers, wholesalers and transport companies > Global trend to larger contain
Slide 59: Retail overview
Retail overview For personal use only Retail centres owned 20 GLA 431,189 sqm Asset value $1,588.6m Gross revaluation1 $82.9m Net income $79.8m Net income growth 6.8% (like for like) Occupancy 99.3% Group MAT 4.2% (like for like) Specialty sales2 $8,100 per sqm 1. Excluding OEI and includes joint ve
Slide 60: Retail performance
Retail performance For personal use only Leasing transactions 124,672sqm (28.9% of portfolio) Tenant rent reviews 835 (187,859 sqm) Occupancy costs 11.7% WALE 6.6 yrs Acquisitions $363.2m Development completions $228.9m1 Orion Town Centre, QLD Stanhope Gardens Stg 2, NSW Logan Megacentre, QLD Waverl
Slide 61: Retail acquisitions
Retail- acquisitions For personal use only Total Acquisition Yield on Acquisitions Acquisition Date Costs Cost Manning Mall, Taree, NSW Nov 06 $32.5m 6.51% Rhodes Shopping Centre, NSW Jan 07 $105.9m 5.60% Broadway Shopping Centre, NSW Jan 07 $224.8m 5.75% Total $363.2m Development Completions Transf
Slide 62: Retail lease expiry
Retail lease expiry For personal use only 60% 50% 40% 30% lettable area sqm 20% 10% 0% Vacant FY08 FY09 FY10 FY11 FY12 Beyond FY07 Results Page 62 Internal Funds Management- MPT
Slide 63: Retail market
Retail market For personal use only > Consumer spending to grow around 5% through FY08 – close to trend levels > Short term, impact of another interest rate hike may offset other positives – wages growth, low unemployment, strong household balance sheet > Supply pipeline strong but will not impact r
Slide 64: Other disposals
Other disposals For personal use only Book Disposal Proceeds $m value proceeds above BV1 20-30 Scrivener St, Warwick Farm, NSW Industrial 21.5 26.5 4.6 Sydney Marriott Hotel, 26 & 36 College St, NSW Hotel 78.7 79.6 0.4 Cairns International Hotel, Cairns, QLD2 Hotel 18.1 18.4 0.3 Bundaberg Plaza, Bun
Slide 65: For personal use only
For personal use only 1. Funds under management before adjustment to joint venture interests. 2. Takeover offer announced by Vicaroma Pty Limited on 9 July 2009. 3. Scheme of arrangement announced by MREIT on 7 August 2007, security holder approval pending. 4. Austock Property Management Limited app
Slide 66: For personal use only
For personal use only 1. Funds under management before adjustment to joint venture interests. 2. Mirvac is a 50% owner of the management entity. 3. Funds managed by Quadrant Real Estate Advisors FY07 Results Page 66
Slide 67: For personal use only
For personal use only 1. Funds under management before adjustment to joint venture interests. 2. Mirvac is a 50% owner of the management entity. FY07 Results Page 67 External Funds Management
Slide 68: Residential pipeline: $8.8bn forecast revenue
Residential pipeline- $8.8bn forecast revenue For personal use only FY07 Results Page 68 Development
Slide 69: Re-stocking during FY07
Re-stocking during FY07 For personal use only Project Project Total Description value1 lots2 Beachside Leighton, WA $449m 160 Mix use coastal village Jane Brook, WA $47m 195 Residential subdivision Dianella, WA $40m 81 Residential subdivision Gainsborough Greens, QLD $710m 1,601 Residential communit
Slide 70: Residential pipeline - lots under control
Residential pipeline- lots under control1 For personal use only Houses/Land % split Apartments % split Total % split NSW 4,790 20% 1,333 25% 6,123 21% VIC 8,321 35% 1,178 22% 9,499 33% WA 6,598 28% 1,371 26% 7,969 27% QLD 3,209 14% 1,463 27% 4,672 16% SA 753 3% 0 - 753 3% Total 23,671 100% 5,345 100
Slide 71: Residential pipeline - forecast revenue
Residential pipeline- forecast revenue1 For personal use only Houses/Land % split Apartments % split Total % split NSW $1,397m 32% $914m 21% $2,311m 26% VIC $1,419m 32% $842m 19% $2,261m 26% WA $695m 16% $1117m 25% $1,812m 20% QLD $824m 19% $1,534m 35% $2,358m 27% SA $71m 1% - - $71m 1% Total $4,406
Slide 72: Recycling into funds/mandates
Recycling into funds/mandates For personal use only Profit on $m Sale1 Magenta Shores, NSW & Burswood, WA- partnership with AustralianSuper 27.1 7 residential developments sold into MWRDP2 53.0 Rhodes Waterside, NSW Mossvale on Manly, QLD Mariner’s Peninsula, Townsville, QLD Hope Island Resort, QLD