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Mirvac Group (ASX: MGR) have released their FY 2019 results this morning, reporting a NPAT of $631m up 4% from FY 2018. The company has also announced guidance for FY 2020 of 3-4% EPS growth as well as dividend distribution of 12.2 cents per stapled security up from 11.6 cpss. MGR is trading up 4.39% at a price of $3.33 in response.
Mirvac is a property asset development and management company, operating over $18 Billion worth of assets in the office, retail, residential and industrial sectors. MGR develops commercial and residential property allowing it to grow its investment portfolio organically. This enabled MGR to achieve a Group Return on Investment of 10.1%, whilst its strategically positioned investments spread between Sydney, Melbourne, Perth and Brisbane experienced several revaluation uplifts adding $516m to the portfolio. The Company has also added $214m worth of assets to its portfolio through acquisitions whilst securing future access to another $3.2 Billion in office and industrial assets.
Mirvac’s office sector performed strongly over FY 2019 with net operating income reaching $338m up 5.7%. This was supported by high occupancy levels at 98.2% and the completion of MGR’s South Eveleigh precinct. MGR office holdings are highly leveraged towards Sydney and Melbourne allowing it to benefit from continually favourable market conditions, MGR is now Australia’s second largest office manager.
The industrial sector provided consist returns for MGR with occupancy rates across its portfolio at 99.7%. The company also increased its industrial presence in Sydney by $1.2 Billion which will generate substantial future returns, with the development of a 244-hectare sight at Badgerys Creek close to Western Sydney’s future international airport. It is worth considering MGR’s industrial investments are 100% weighted in Sydney and therefore any downturn in the Sydney market could be especially damaging.
MGR’s retail sector saw income gains of 2.6% with revaluation gains adding an additional 2.2% to the portfolio. The Company has also seen considered gains in its attempts to diversify its retail holdings with speciality sales productivity at $10, 063 per square metre.
The residential sector has slowed across the market however MGR’s developments remain sought after by investors and home buyers alike. Evident in the $1.7 Billion MGR secured in pre-sales for FY 2019. This success in a slowing property market is due to MGR’s innovative developments that have won multiple architectural awards.
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