Slide 1: FY14 results
For personal use only FY14 results 21 AUGUST 2014 ARTISTS IMPRESSION OF TREASURY BUILDING, WA
Slide 2: FY14 — A significant year for Mirvac
FY14 — A SIGNIFICANT YEAR FOR MIRVAC For personal use only 2014 was all about: > Delivering on our strategy > Improving the quality of our assets and earnings across all sectors > Positioning the business for future success MIRVAC I FY14 RESULTS I 21 AUGUST 2014 I 1
Slide 3: Agenda
For personal use only agenda FY14 SNAPSHOT FY14 FINANCIAL OPERATIONAL SUMMARY AND RESULTS AND CAPITAL UPDATE GUIDANCE MANAGEMENT MIRVAC I FY14 ADDITIONAL MIRVAC I INFORMATION FY14 RESULTS I 21 AUGUST 2014 I 2
Slide 4: FY14 snapshot
For personal use only FY14 snapshot MIRVAC I FY14 RESULTS I 21 AUGUST 2014 I 3
Slide 5: Snapshot
SNAPSHOT ARTIST’S IMPRESSION OF 200 GEORGE STREET, NSW For personal use only > Achieved FY14 operating EPS of 11.9cpss (statutory earnings of 12.2cpss) 1,2 and DPS of 9.0cpss in line with guidance > Delivered FY14 objectives and positioned the business for future success: — Improved the quality of i
Slide 6: Strategic acquisitions
STRATEGIC ACQUISITIONS For personal use only Acquisitions in line with investment portfolio mandates > Executed $606.8m 1 of investment acquisitions across office, retail and industrial; in line with strategic return hurdles: — 367 Collins Street, Melbourne, VIC; ability to unlock value via internal
Slide 7: Strategic divestments
STRATEGIC DIVESTMENTS For personal use only MPT PROPORTION OF ON STRATEGY AND Strategic divestments improve investment portfolio quality OFF STRATEGY ASSETS > $232.6m 1 non-core assets sold; 3.2% above book value 100% 2.3% 11.0% > Accelerated non-core asset disposal program and reduced single asset
Slide 8: People and operational excellence
PEOPLE AND OPERATIONAL EXCELLENCE For personal use only Operational excellence > Business transformation efforts focused on procurement and bureaucracy busting > “Be Safe for Life” HSE strategy launched > “This Changes Everything” sustainability strategy launched > “hatch” innovation program initiat
Slide 9: FY14 financial results and capital management
For personal use only FY14 financial results and capital management MIRVAC I FY14 RESULTS I 21 AUGUST 2014 I 8
Slide 10: FY14 financial results
FY14 FINANCIAL RESULTS 1 For personal use only STATUTORY PROFIT OPERATING PROFIT 2 FY13 TO FY14 EBIT BY DIVISION $600m $600m $600m $94.7m $0.5m ($6.3m) $590.5m $447.3m $437.8m 550 400 400 $377.6m 500 $52.8m $2.8m 200 200 $139.9m 450 $446.0m 0 0 400 FY13 FY14 FY13 FY14 FY13 Investment Investment Deve
Slide 11: FY14 financial results
FY14 FINANCIAL RESULTS 1 For personal use only NTA 2 FINANCE COSTS OVERHEADS 3 GROUP CAPITAL SPLIT 4 $2.0 $200m $200m Passive 79.3% $176.9m $1.62 $1.66 $165.7m Active 20.7% 1.5 150 $144.8m 150 1.0 100 $87.1m 100 0.5 50 50 0 0 0 FY13 FY14 FY13 FY14 FY13 FY14 Mirvac’s NTA 2 increased 2.5% from Increas
Slide 12: Capital management update
CAPITAL MANAGEMENT UPDATE For personal use only Strong capital management FY14 NET OPERATING CASH FLOW $800m > Delivered strong operating cash flow in 2H14: $512.0m $399.3m 600 — $396.3m from Era, Chatswood, NSW settlements and commercial fund through payments 400 ($112.7m) > Gearing of 27.8% 1; wit
Slide 13: Operational update
For personal use only operational update MIRVAC I FY14 RESULTS I 21 AUGUST 2014 I 12
Slide 14: Investment and development summary
INVESTMENT AND DEVELOPMENT SUMMARY For personal use only Investment FY14 1H14 FY13 > MPT outperformed IPD index over one, three and five years 1: Net valuation uplift 6 0.6% 1.0% 0.8% — Delivered a 9.4% one year un-geared total return 1 Like-for-like NOI growth 3.1% 3.3% 3.5% > Maintained strong lik
Slide 15: Office market conditions
OFFICE MARKET CONDITIONS For personal use only > Office fundamentals will remain challenging exhibited through elevated CUMULATIVE FOREIGN NET COMMERCIAL PROPERTY PURCHASES 2 vacancy and high incentives $20bn Office Industrial Retail > Leading indicators pointing to improving demand particularly in
Slide 16: Office portfolio
OFFICE PORTFOLIO For personal use only OFFICE TOTAL RETURN VS IPD BENCHMARK Strategy to create and buy prime grade CBD assets; delivering results MPT IPD 1 > Outperforming IPD index on a one, three and five year basis 1 9.1% 1 Year 9.2% — Delivered a 9.2% one year un-geared total return 1 9.3% 3 Yea
Slide 17: Office portfolio
OFFICE PORTFOLIO For personal use only > Strong portfolio WALE of 4.7 years 1, 2 OFFICE LEASE EXPIRY PROFILE 1,2 > Occupancy remains high at 96.1% 2, 3; executed 132 lease deals over 40% 38.5% 49,038sqm 30 > Completed 57 lease deals across GE portfolio representing 15,808sqm and substantially leased
Slide 18: Office development
OFFICE DEVELOPMENT For personal use only > FY14 Commercial Development EBIT of $29.3m 1; major contribution from OFFICE PIPELINE 8 Chifley, Sydney, NSW Forecast valuation on completion 2 $2,000m > Strong office development pipeline of $3.4bn 2 > Projects under construction de-risked; average 87.9% p
Slide 19: Retail market conditions
RETAIL MARKET CONDITIONS For personal use only > Retail turnover accelerating again with returning confidence post Federal INDEX OF AUSTRALIAN RETAIL SALES: SPLIT BY FOOD AND NON-FOOD CATEGORIES 4 Budget: 140 All food 5 All other retail categories — Expect continuing sales momentum into FY15 as net
Slide 20: Retail portfolio
RETAIL PORTFOLIO For personal use only RETAIL TOTAL RETURN VS IPD BENCHMARK Repositioning the portfolio has delivered FY14 strategic objective MPT IPD 1 > Outperforming IPD index on a one, three and five year basis 1 — Delivered a 10.0% one year un-geared total return 1 1 Year 7.7% 10.0% > Net valua
Slide 21: Retail portfolio
RETAIL PORTFOLIO For personal use only > Specialty occupancy costs increased to 16.8% 1, 2: TOTAL COMPARABLE CENTRE SALES PRODUCTIVITY $9,000 MAT/sqm NLA 450,000 — Portfolio re-weighted to more productive centres — Occupancy costs do not include development affected centres which are 8,500 Orange Ci
Slide 22: Retail development
RETAIL DEVELOPMENT For personal use only Yield on cost Target development IRR (10yr) Retail development pipeline Kawana Shoppingworld, Stage 4, QLD 7%–8% 10%–12% 2 > Project nearing completion and 96.9% 1 pre-leased; 84.0% 1 of MASTERPLANNING — new stores have commenced trading UNDERWAY NEXT WAVE FU
Slide 23: Industrial — market conditions
INDUSTRIAL — MARKET CONDITIONS For personal use only > Industrial demand drivers are supported by: NSW INFRASTRUCTURE INVESTMENT 1 — Positive outlooks for housing investment, consumer spending and $80bn exports $61.5bn 60 — Sizeable committed infrastructure pipeline to boost demand for well $54.3bn
Slide 24: Industrial portfolio
INDUSTRIAL PORTFOLIO For personal use only Industrial portfolio continues to deliver strong results INDUSTRIAL TOTAL RETURN VS IPD BENCHMARK MPT IPD 1 > Outperforming IPD index on a one and three year basis 1 > Net valuation uplift 2 of 0.9% and WACR narrowed to 7.43% 3 driven by: 1 Year 9.1% 9.6% —
Slide 25: Residential — market conditions
RESIDENTIAL — MARKET CONDITIONS For personal use only > Strong sales and price momentum in 1H14 carried through at slightly ANNUAL NATIONAL POPULATION GROWTH AND DWELLING APPROVALS 1 reduced pace in 2H14: 500,000 — Further price growth expected, albeit at a more modest pace 400,000 — Increased stock
Slide 26: Residential — market conditions
RESIDENTIAL — MARKET CONDITIONS For personal use only > Strength in the Sydney residential market supported by supply FY15 EXPECTED RESIDENTIAL DEVELOPMENT EBIT 1 shortage, low vacancy, above average population growth and a strengthening state economy: NSW 80.0% QLD 0.6% — Mirvac’s near term earning
Slide 27: Residential — FY14 results
RESIDENTIAL — FY14 RESULTS For personal use only > FY14 residential EBIT of $202.0m 1; settlement of 2,482 lots > Strong $1.2bn 2 of residential exchanged pre-sales contracts; $979.7m secured in FY14 > 2,320 lots released with 87.5% of lots pre-sold > Acquired 2,671 lots throughout FY14; in line wit
Slide 28: Residential — FY15 and beyond
RESIDENTIAL — FY15 AND BEYOND For personal use only > Expecting to settle 2,200 lots in FY15; 80.0% expected from profit APARTMENT RELEASE SCHEDULE generating projects vs. 70.1% at FY14 2,500 Lots Green Square, NSW 1 — Remain focused on maintaining normalised residential gross margin of 2,000 Harold
Slide 29: Summary and guidance
For personal use only summary and guidance MIRVAC I FY14 RESULTS I 21 AUGUST 2014 I 28
Slide 30: Summary and guidance
SUMMARY AND GUIDANCE For personal use only GUIDANCEFY15 Group operating profit $443 – $455m Operating EPS 12.0 – 12.3cpss DPS 9.2 – 9.4cpss Weighted average securities 3,703m MIRVAC I FY14 RESULTS I 21 AUGUST 2014 I 29
Slide 31: FY15 outlook
FY15 OUTLOOK For personal use only Office > Active leasing to keep income high > Securing future development opportunities with income in place > Improving the quality of the portfolio through capital transactions Retail > Target acquisitions where we can add value through active asset management >
Slide 32: Medium term outlook
MEDIUM TERM OUTLOOK For personal use only Office > Office market over the medium term will show strengthening demand whilst supply cycle ending > Upcoming development completions will improve the quality of the portfolio and earnings Retail > Retailers are likely to become more optimistic once the c
Slide 33: 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 Trust (ARSN 086 An investment in Mirvac stapled securities is subject to investment and other known and unknown 780 645). This presentation (“Presentation”) has been p
Slide 34: Thank you
For personal use only thank you FOLLOW US MIRVAC MIRVAC ON TWITTER INVESTOR RELATIONS FY14 PROPERTY @MIRVACIR WEBSITE COMPENDIUM