Slide 1: FY16 Results
INDUSTRIAL RESIDENTIAL For personal use only 1 6 AU G U S T 2 0 1 6 FY16 Results OFFICE RETAIL EVERYTHING’S connected
Slide 2: Agenda
Agenda For personal use only Overview Susan Lloyd-Hurwitz, CEO and Managing Director Financial Results Shane Gannon, Chief Financial Officer Capital Allocation Brett Draffen, Chief Investment Officer Office & Industrial Campbell Hanan, Head of Office & Industrial Retail Susan MacDonald, Head of Reta
Slide 3: Overview
For personal use only Susan Lloyd-Hurwitz, CEO and Managing Director OVERVIEW MIRVAC FY16 RESULTS 16 AUGUST 2016 02
Slide 4: Mirvac delivers on promises
Mirvac delivers on promises For personal use only 13.0cpss EPS Focused 9.9cpss 12.3cpss FY15 urban strategy DPS 9.4cpss delivers strong 13.8% FY15 results Development ROIC Delivered EXCEEDED TARGET OF 12% top end of guidance MIRVAC FY16 RESULTS 16 AUGUST 2016 03
Slide 5: Office & Industrial
Office & Industrial For personal use only — Divested $787m non aligned office assets 28% — Completed 200 George Street development OF PORTFOLIO LEASED IN — Office occupancy 96.5% Creating one FY16 — Leased 28% of office portfolio of Australia’s — Secured 110,000 sqm of pre-lease commitments 7.9years
Slide 6: Retail
Retail For personal use only — Leasing spreads of 3.5% 9%SALES — Leasing spreads positive for 16 consecutive quarters Transforming — Retail occupancy 99.4% PRODUCTIVITY GROWTH ON FY15 — Sales productivity up 9% to $9,623 per sqm retail business — Retail developments delivered and on track into an ur
Slide 7: Residential
Residential For personal use only — Residential EBIT contribution up 51% — 2,824 lots settlements, up 24% on FY15 12.4% Delivering — Secured pre-sales 45% higher at $2.9bn RESIDENTIAL — Settlement defaults <1% record ROIC — Sales activity up 8% performance in — ROIC 12.4% and gross margins 24.4% res
Slide 8: Capital Management
Capital Management For personal use only — Gearing 21.9% — $15m cost reductions on track 21.9% GEARING Maintain — Highly selective in acquisitions — Greater clarity and visibility in reporting agility through disciplined capital management In summary, this business is extremely $15m and continued we
Slide 9: Key enablers supporting value creation
Key enablers supporting value creation For personal use only INNOVATION PEOPLE + LEADERSHIP TECHNOLOGY SUSTAINABILITY SAFETY — Hatch innovation — Strengthened — Implemented hardware — Launched Social Return on — Achieved an LTIFR of program progressed leadership team and software solutions Investmen
Slide 10: Financial Results
For personal use only Shane Gannon, Chief Financial Officer FINANCIAL RESULTS MIRVAC FY16 RESULTS 16 AUGUST 2016 09
Slide 11: Achieved top end of guidance with EPS growth of 5.7%
Achieved top end of guidance with EPS growth of 5.7% For personal use only Statutory profit Operating EPS FFO per security DPS $1,000m 13.0 cents 14.0 cents 10.0 cents $1,033m 13.0c 13.5c 9.9c 750 12.5 12.0 12.7c 9.5 12.2c 9.4c 12.3c 500 $610m 12.0 10.0 9.0 9.0c $447m 11.9c 250 11.5 8.0 8.5 0 11.0 6
Slide 12: Strength through diversified earnings
Strength through diversified earnings For personal use only Operating EBIT of $640m, up 7% on FY15 Operating results — Office & Industrial contribution impacted by $260m of asset FY16 FY15 sales in FY15 $m $m Office & Industrial 358 388 — Retail contribution slightly up on FY15 reflecting operating
Slide 13: Maintaining an optimal capital structure
Maintaining an optimal capital structure For personal use only — Maintained gearing within target range of 20-30% Capital management metrics FY16 FY15 — Average borrowing cost reduced to 5.0% NTA $1.92 $1.74 — Average debt maturity of 4.0 yrs expected to increase to 5.4 yrs following: Balance sheet
Slide 14: High level of visibility over future cashflows
High level of visibility over future cashflows For personal use only — Consistent operating cashflows driven by rental income, Operating cashflow $600m residential settlements and commercial fund-through $509m developments 400 $386m $399m $413m — Achieved a positive operating cashflow in FY16 of $50
Slide 15: Capital Allocation
For personal use only Brett Draffen, Chief Investment Officer CAPITAL ALLOCATION MIRVAC FY16 RESULTS 16 AUGUST 2016 14
Slide 16: Disciplined allocation of capital delivering solid returns
Disciplined allocation of capital delivering solid returns For personal use only — 82% of capital in FY16 allocated to investment 13.0% — Stable income that underpins the Group distribution — 18% of capital in FY16 allocated to development — Secured capital partners to fund new opportunities — Dispo
Slide 17: Capital strategy leveraging our capability
Capital strategy leveraging our capability For personal use only Balance Third party capital Office & Industrial sheet assets under management — Deliver $500m (MGR cost to complete) of active developments — Increase scale through future pipeline and acquisitions in conjunction with aligned third par
Slide 18: Office & Industrial
For personal use only Campbell Hanan, Head of Office & Industrial OFFICE & INDUSTRIAL MIRVAC FY16 RESULTS 16 AUGUST 2016 17
Slide 19: Transition to a higher quality portfolio
Transition to a higher quality portfolio For personal use only Repositioning the portfolio Results FY16 FY15 — NOI impacted by timing differences between non-aligned asset sales $m $m and new developments Office & Industrial NOI 331 350 Development EBIT 33 52 — Divested $787m of suburban office asse
Slide 20: Strong office portfolio metrics underpinned by record leasing success
Strong office portfolio metrics underpinned by record leasing success For personal use only — Record leasing activity across the office portfolio, representing 28% Office portfolio metrics 1 FY16 FY15 of portfolio income Portfolio value $4,402m $4,485m — 275 Kent St, NSW (58,460 sqm) WACR 6.23% 7.01
Slide 21: Industrial portfolio 100% leased and long WALE
Industrial portfolio 100% leased and long WALE For personal use only — Further improving already exceptional metrics with >79,500 sqm of leasing Industrial portfolio metrics activity, representing 17% of portfolio income FY16 FY15 — Retained Pacific Brands on a 7 year lease at 47-67 Westgate Drive,
Slide 22: Young office portfolio heavily weighted to Sydney and Melbourne
Young office portfolio heavily weighted to Sydney and Melbourne For personal use only Geographic Diversification Grade Diversification FY14 FY16 FY14 FY16 Sydney CBD/Fringe CBD: 49% Sydney CBD/Fringe CBD: 57% Premium: 26% Premium: 35% Melbourne CBD/Fringe CBD: 20% Melbourne CBD/Fringe CBD: 24% A-Gra
Slide 23: Funding office investments through disposals
Funding office investments through disposals For personal use only — Asset sales of $1.6bn since 2014, on a passing yield of 7.1%, replaced with new developments at 200 George St, Sydney, Treasury Building, Perth, 699 Bourke St, Melbourne and 8 Chifley, Sydney on a yield on cost of 7.7% $1,000m Expe
Slide 24: 200 George Street: Unlocking value to generate superior returns
200 George Street Unlocking value to generate superior returns 200 George Street Value (Mirvac interest) $371m Cap rate 5.38% Ownership 50% For personal use only NLA 38,970 sqm WALE 10 yrs Maximise income — Maintained rental income during planning and approvals phase De-risk leasing — Secured major
Slide 25: Portfolio transition continues
Portfolio transition continues $1.5bn of committed development pipeline will further strengthen portfolio quality For personal use only 1H17: WAREHOUSE 1, 2H17: 2 RIVERSIDE QUAY, $2.9BN POTENTIAL PIPELINE CALIBRE INDUSTRIAL ESTATE MELBOURNE 100% SYDNEY & MELBOURNE 6.8% AVERAGE TARGET YOC FY18: 664 C
Slide 26: Focus on maximising income while delivering development pipeline
Focus on maximising income while delivering development pipeline For personal use only FY17 outlook Office lease expiry profile (by income) — Office portfolio well-positioned to take advantage of Sydney market 60% 49% — 56% of vacancy and FY17 expires weighted to Sydney 40 — Major FY17 expires: 275
Slide 27: Retail
For personal use only Susan MacDonald, Head of Retail RETAIL MIRVAC FY16 RESULTS 16 AUGUST 2016 26
Slide 28: Delivering value through continued execution of urban strategy
Delivering value through continued execution of urban strategy For personal use only — NOI in line with FY15, with acquisitions and development completions Retail FY16 FY15 partially offsetting $158m of asset sales in Jun 15 and development $m $m impacted assets Retail NOI 125 125 — Like-for-like NO
Slide 29: Focused portfolio delivering sales and leasing outperformance
Focused portfolio delivering sales and leasing outperformance For personal use only — Leased ~14% of portfolio GLA (410 transactions across over 52,000sqm) Retail sales by category — Positive leasing spreads of 3.5% FY16 FY15 FY16 Comparable Comparable — 16 consecutive quarters of positive leasing s
Slide 30: Trends support clear strategy
Trends support clear strategy For personal use only Outlook Mirvac strategy SYDNEY ATTRACTING 80% Urbanisation — Densification of eastern seaboard cities — 100% urban and metropolitan markets — Higher population growth and lower unemployment — Overweight to Sydney — Record infrastructure investment
Slide 31: Increasing our inner urban footprint in FY17
Increasing our inner urban footprint in FY17 M1 For personal use only TRAMSHEDS, SYDNEY — 3km from Sydney CBD — New 6,200 sqm urban village — Densely populated infill site — Light rail access M2 — Key retailers: Gelato Messina, Bodega 1904, Fish & Co, Butcher M1 & The Farmer and Supamart IGA Greenwo
Slide 32: Acquisitions and developments underpin EBIT growth in FY17
Acquisitions and developments underpin EBIT growth in FY17 For personal use only ACQUISITIONS DEVELOPMENT PIPELINE FY17 OUTLOOK East Village, Sydney Orion Springfield Central, Stage 2, QLD CONTINUE TO DRIVE — Acquired 1 Jul 16 — 97% retail leased, completed 2H16 HIGH‑PERFORMING PORTFOLIO — Strong sa
Slide 33: Residential
For personal use only John Carfi, Head of Residential RESIDENTIAL MIRVAC FY16 RESULTS 16 AUGUST 2016 32
Slide 34: Residential results up 51% on FY15
Residential results up 51% on FY15 For personal use only — EBIT growth of 51% driven by Residential results 1 FY16 FY15 — NSW: Harold Park, The Avenue and Googong $m $m Revenue 1,119 964 — VIC: Yarra’s Edge and Tullamore Development EBIT 209 142 — Completed 2,824 gross settlements, up 24% on FY15 Ma
Slide 35: Market delivered strong levels of activity in FY16
Market delivered strong levels of activity in FY16 For personal use only — Sales activity of 3,830 lots, up from ~3,540 in FY15 Sales activity by lots — 72% weighted to Sydney and Melbourne 4,000 lots — 1H16: 51%, 2H16: 49% 3,000 — Strong sales at existing masterplanned communities projects 2,000 —
Slide 36: Managing our FIRB exposure
Managing our FIRB exposure For personal use only FY16 observations $2.9bn pre-sales by buyer profile — Settlement delays post restrictions — Alternative funding sources accessed Domestic owner occupier: 41% Domestic investor: 32% — Defaults maintained below 1% Mainland China: 21% — FIRB buyers remai
Slide 37: Outperformance in a lower growth environment
Outperformance in a lower growth environment For personal use only Market Pre-sales expected settlement profile — Markets well supported by very low interest rates and competitive lending environment 50% 47% — Mature stage of supply cycle means brand, certainty and location at forefront 40 — Future
Slide 38: Targeting significant uplift in returns underpinned by earnings visibility
Targeting significant uplift in returns underpinned by earnings visibility For personal use only — Expect to achieve Residential ROIC in FY17 of >15% FY17 major EBIT contributors — Targeting >3,300 lot settlements in FY17 FY17 % Masterplanned FY17 % Apartments lot target pre-sold communities lot tar
Slide 39: Summary & Guidance
For personal use only Susan Lloyd-Hurwitz, CEO and Managing Director SUMMARY & GUIDANCE MIRVAC FY16 RESULTS 16 AUGUST 2016 38
Slide 40: Clear and focused strategy expected to deliver attractive securityholder returns
Clear and focused strategy expected to deliver attractive securityholder returns For personal use only Urban strategy with overweight Highly visible and defensive cash flows Targeting attractive to Sydney and Melbourne securityholder returns — 98.3% investment portfolio occupancy — 5.8 year investme
Slide 41: FY17 Guidance
FY17 Guidance For personal use only Operating EPS guidance 14.0 – 14.4 cpss 8-11% growth DPS guidance 10.2 – 10.4 cpss 3-5% growth Residential ROIC target >15% Moreton, Bondi, Sydney Artists impression MIRVAC FY16 RESULTS 16 AUGUST 2016 40
Slide 42: Important Notice
Important Notice For personal use only Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust (ARSN 086 780 An investment in Mirvac stapled securities is subject to investment and other known and unknown risks, 645). This presentation (“Presentation”) has been prepared
Slide 43: Thank You
INDUSTRIAL RESIDENTIAL For personal use only THANK YOU OFFICE RETAIL EVERYTHING’S connected