Securities in property manager and investment group Mirvac
(ASX:MGR) jumped nearly 4% on Thursday after it revealed a better-than-expected net result for the year to June 30.
The company reported a statutory result of $906 million for the year to June – up just $5 million on a year ago while the operating result of $596 million was up 8% from 2020-21’s $550 million.
Earnings before interest and tax rose 10% to $773 million.
Full year distribution to security holders is 10.33 cents a security, or a total of $404 million, a rise of 3%.
Both the earnings result and the distribution increase were well behind the 6% plus inflation rate for the year to June.
The big surprise from the result and perhaps a trendsetter for other big investors was the quite obvious move to lower its investment in CBD offices.
Mirvac is planning to offload $1.3 billion in office and retail properties this financial year as it rebalances its investments to reflect ‘tenant and capital demand for modern, sustainable real estate’.
The selloff may reflect the general softening in those sectors, but Mirvac CEO Susan Lloyd-Hurwitz said the move is aimed at further improving the quality of the group’s portfolio as it ramps up investments in the industrial and build-to-rent sectors.
Despite the solid result, Lloyd-Hurwitz concedes FY22 presented greater challenges for Mirvac than previous years.
“We experienced the ongoing impacts of COVID-19, supply chain issues, labour shortages, rising inflation and interest rates, geopolitical tension, and extreme wet weather, particularly across the east coast of Australia,” she says.
“Despite this, we have delivered a strong financial and operational result ahead of guidance, demonstrating the continued resilience of our people and the value of our integrated and diversified business model.
A rebalancing was to be expected after Mirvac snatched management rights to the $7.7 billion AMP Wholesale Office Fund (AWOF) in July and after the June 30 balance date.
Ms Lloyd-Hurwitz said in Thursday’s statement that the coup would “accelerate our Funds Management strategy, broadening our investor base, and introducing new accretive income streams. The fund’s modern, sustainable, high-quality $7.7bn investment portfolio is aligned with our portfolio and investment approach, and we look forward to driving future returns for investors.”
The securities ended up 3.8% at $2.17.
