The office and industrial portfolios weathered the global pandemic reasonably well with rent collection remaining at about 97 per cent, while retail was a bit lower at 84 per cent.
Mirvac chief executive Susan Lloyd-Hurwitz said despite the pandemic, the group delivered solid results for the half year including an operating profit of $276m, an increase of 10 per cent from second half of the 2020 year to June 30.
As a result Mirvac has initiated guidance for the full 2021 year, with operating earnings per share guidance of between 13.1 to 13.5¢ per stapled security and distribution guidance of 9.6 to 9.8¢ for the year ending June 2021.
“The pandemic continued to disrupt our operating markets during 1H21 and the world remains in crisis. Mirvac’s ability to maintain productivity and respond quickly to our customers’ changing needs has underpinned our recovery and safeguarded our business from the worst of the pandemic,” Ms Lloyd-Hurwitz said.
In the coming year it will be the growth of the build-to-rent sector that will be the focus. The sector, where developers of the buildings retain ownership and act as the landlord to renters, is in its infancy in Australia.
“The emergence of the build to rent sector is gathering pace in Australia. LIV Indigo, Mirvac’s first build to rent property, is now 48 per cent leased and we are gaining valuable insights that will inform the rollout of our growing pipeline,” she said.
“The team further extended the build to rent development portfolio during the first half of 2021 financial year with the addition of LIV Newstead in Brisbane, taking the future portfolio to about 2,200 units across five sites with an estimated total end value of $1.6 billion.”
Richard Jones from JP Morgan said operationally the result looks solid, the balance sheet is well positioned, and valuations have so far held in.
“We expect some negative valuation pressure in retail and potentially office plus development earnings, residential and commercial, are rebasing in 2021 from a high level. Mirvac provided full year guidance of 13.1-13.5¢ps and DPS of 9.6-9.8¢, this is below our 14.4¢ and 10.8¢ forecasts” he said.
Read More: Markets Live, Friday 12 February, 2021