DEEP DIVE MIRVAC GROUP ON
ACKNOWLEDGEMENTS
EDITOR
IN CHIEF:
Samuel Yu
AUTHORS: Richard Ly, Will Tsui, David Wang
DESIGNERS: Rama Mahadik, Zachary Ni, Dev Punjabi, Kyan Nikkhah
DISCLAIMER
1 The information in this free guide is provided for the purpose of education and intended to be of a factual and objective nature only. REISA makes no recommendations or opinions about any particular financial product or class thereof.
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01 COMPANYOVERVIEW
Mirvac Group is an ASX-listed ~$8.4 billion market cap Australian integrated real estate investor, developer and manager with three main operating arms: (1) Investment, (2) Funds and (3) Development Mirvac’s real estate strategy involves investing, developing and managing capital and assets across sectors ranging from living, industrial, premium CBD office, retail, and mixed-use precincts. Mirvac operates domestically with a focus on Australian capital cities.
Source: FY24 Annual Report
Notes: (1) Capital IQ as at 25 March 2025.
INVESTMENTARM
Mirvac’s Investment arm strategically manages a diversified portfolio across office, industrial, retail, and living sectors to deliver long-term financial returns. Investment earnings primarily consist of rental income, coupled with Mirvac’s share of profits from partnerships and co-investments. Key drivers for Mirvac’s investment performance include increasing asset occupancy and rental yields, enhancing asset quality through strategic acquisitions and developments, and actively managing operational efficiencies and financing costs.
As of 1H25, Mirvac manages a ~$10 3 billion investment portfolio, characterised by high occupancy rates averaging 96 2% and a weighted average lease expiry (WALE) of 5.2 years. The portfolio predominantly features premium-grade office spaces, Sydney-based industrial facilities, urban retail assets and rapidly growing presence in the living sector through build-to-rent and land lease assets.
Company Filings
FUNDSARM
Mirvac’s Funds arm includes their Funds Management and Asset Management platforms. The Funds Management platform focuses on raising and managing capital from third-party domestic and international partners where earnings are generated primarily from management fees and performance fees. The Asset Management platform provides operational expertise of the real estate assets within Mirvac’s portfolio where earnings are generated from fees for property management services.
As of 1H25, Mirvac’s Funds Management platform manages ~$16 billion in thirdparty capital, including partnerships, mandates, and joint ventures whilst the Asset Management arm oversees ~$22 billion in assets. Mirvac continues to attract domestic and international partners by leveraging its integrated development capabilities to create high quality assets that meet growing investor demand for sustainable and strategically located properties, highlighted by successful ventures such as the Mirvac Wholesale Office Fund (MWOF), Mirvac Industrial Vehicle (MIV), and the Build to Rent (LIV) Venture
DEVELOPMENTARM
Mirvac’s Development arm strategically focuses on site acquisition, urban planning, and construction within Australia's key urban markets. Development earnings primarily consist of development management fees, performancerelated revenues from joint ventures, gains or losses from project sales, and net income from property revaluations. The primary drivers for development earnings include the level of development projects, effectiveness in managing construction costs, property valuations, and the ongoing availability of third-party capital partnerships to fund development initiatives.
As of 1H25, Mirvac’s Development arm manages a pipeline valued at approximately $29 billion, consisting of commercial and mixed-use (CMU) and residential projects. Notable projects include the Aspect Industrial Estate and 55 Pitt Street in Sydney, LIV Aston in Melbourne, and significant mixed-use ventures such as Harbourside Residences. Mirvac continues to leverage its integrated model and development capabilities to capitalise on rebounding market conditions, particularly in the living and office sectors
02 INVESTMENT HIGHLIGHTS
Increased portfolio resilience achieved through disposals
Successfully executed ~$1 bn in strategic non-core asset sales over the past 18 months, freeing up capital for potential acquisitions for funds, development opportunities and boosting overall portfolio quality.
$29 bn development pipeline with strong pre-leasing commitments
Assets such as Harbourside, Sydney and Aspect Industrial Estate are 80% pre-sold and 67% pre-leased respectively showing strong demand. Looking forward, this presents opportunities for asset disposal if cash is needed given their high occupancy rates and premium positioning.
Exposure to living sector plays into Integrated Model strengths
By acquiring a 47.5% interest in Serenitas for ~$1 bn in late 2023, this provided immediate entry and scale in the land lease sector benefiting from Australia’s aging demographics and undersupply in affordable housing solutions tailored for retirees and downsizers.
Robust occupancy driven by desirable location and asset positioning
Maintained a high portfolio occupancy rate of approximately 96.2% as of 1H25, underpinned by robust leasing activity and resilient demand across its premium-grade office, industrial, retail, and living portfolios.
03 REALESTATE PORTFOLIOOVERVIEW
Source: 1H25 Property Compendium
$5.4 billion portfolio; 20 properties; 95% occupancy; 6.10% cap rate
Source: 1H25 Property Compendium
NOTABLEOFFICEASSETS
$5.4 billion portfolio; 20 properties; 95% occupancy; 6.10% cap rate
Address: 275 Kent Street, Sydney, NSW
Size: 76k sqm
Valuation: $759 3 million
Book cap rate: 5 50%
Address: Olderfleet 477 Collins Street, Melbourne, VIC
Size: 59k sqm
Valuation: $413.5 million
Book cap rate: 5.63%
Address: South Eveleigh Precinct, Eveleigh, NSW
Size: 102k sqm
Valuation: $395.0 million
Book cap rate: 6.13%
Address: Heritage Lanes 80 Ann Street, Brisbane, QLD Size: 62k sqm
Valuation: $387.5 million
Book cap rate: 5.88%
INDUSTRIAL
$1.7 billion portfolio; 12 properties; 96% occupancy; 5.39% cap rate
Source: 1H25 Property Compendium
NOTABLEINDUSTRIALASSETS
$1.7 billion portfolio; 12 properties; 96% occupancy; 5.39% cap rate
Address: Nexus Industry Park, Preston, NSW
Size: 76k sqm
Valuation: $256.0 million
Book cap rate: 5.34%
Address: Hoxton Distribution Park, Hoxton Park, NSW
Size: 140k sqm
Valuation: $222 7 million
Book cap rate: 5 30%
Address: 274 Victoria Road, Rydalmere, NSW
Size: 23k sqm
Valuation: $77 0 million
Book cap rate: 5 25%
Address: 39 Herbert Street, St Leonards, NSW
Size: 36k sqm
Valuation: $252 8 million
Book cap rate: 5 64%
Address: Calibre Estate (1-5), Eastern Creek, NSW
Size: 110k sqm
Valuation: $201 2 million
Book cap rate: 5 35%
Address: 1-47 Percival Road, Smithfield, NSW
Size: 24k sqm
Valuation: $73 5 million
Book cap rate: 5 63%
$2.2 billion portfolio; 9 properties; 99% occupancy; 5.78% cap rate
Source: 1H25 Property Compendium
NOTABLERETAILASSETS
$2.2 billion portfolio; 9 properties; 99% occupancy; 5.78% cap rate
Address: Orion Springfield Central, Springfield, QLD
Size: 73k sqm
Valuation: $479.5 million
Book cap rate: 5.50%
Address: Broadway Sydney, Glebe, NSW
Size: 52k sqm
Valuation: $392 6 million
Book cap rate: 5 25%
Address: Birkenhead Point Outlet, Drummoyne, NSW
Size: 33k sqm
Valuation: $415 5 million
Book cap rate: 6 00%
Address: East Village, Zetland, NSW
Size: 33k sqm
Valuation: $301 0 million
Book cap rate: 5 75%
Address: Rhodes Waterside, Rhodes, NSW
Size: 35k sqm
Valuation: $180 0 million
Book cap rate: 5 75%
Address: Kawana Shoppingworld, Buddina, QLD
Size: 45k sqm
Valuation: $178 0 million
Book cap rate: 6 25%
BUILDTORENT
$434 million portfolio; 3 properties; 70% occupancy; 4.25% cap rate
Asset: LIV Indigo, Sydney Olympic Park, NSW
Ownership: 44% Mirvac, 56% Unlisted Partners
Total apartments: 316
Status: Operational
Asset: LIV Munro, Melbourne, VIC
Ownership: 44% Mirvac, 56% Unlisted Partners
Total apartments: 490
Status: Operational
Address: LIV Aston, Melbourne, VIC
Ownership: 44% Mirvac, 56% Unlisted Partners
Total apartments: 474
Status: Operational
Address: LIV Albert, Brunswick, VIC
Ownership: 44% Mirvac, 56% Unlisted Partners
Total apartments: 498
Status: Under Construction
LandLease(Serenitas)
$286 million portfolio; 30 properties; 100% occupancy; 5.40% cap rate
Source: 1H25 Property Compendium
05 TRADING PERFORMANCE
18 Oct 23: Mirvac Group and Pacific Equity Partners and Tasman Capital Partners enter into binding agreement to acquire Serenitas Management. (0.3%) change
02 Apr 24: Keppel REIT agree to acquire 50% stake in 255 George Street, Sydney from Mirvac Wholesale Office Fund I for $360 million. +0.2% change
28 Jun 24: Mitsui Fudosan agree to acquire 66% stake in 55 Pitt Street, Sydney from MGR. +3.8% change
08 Aug 24: MGR reports FY24 results, with earnings at the bottom end of confirmed guidance (14.0cps). (8.8%) change
14 Feb 25: MGR reports 1H25 results, with OEPS guidance of 12.0-12.3cps reaffirmed and improving settlements. +6.5% change
SHAREPRICEVSASX200
3 YEAR TRADING PERFORMANCE ($ PER SHARE)(1)
06 TRADINGCOMPS
Trading comparables, or “trading comps”, are a valuation method used to compare the value of a company or part of a company by comparing it to similarly publicly trading companies The idea is similar to how real estate agents determine house prices by looking at recent listings of similar quality homes in the same area. In financial markets, analysts look at key financial ratios or metrics to gauge how a particular company is valued compared to its peers.
FUNDSMANAGEMENTCOMPS
(1) Company filings as at 30 December 2024.
(2) Capital IQ as at 25 March 2025.
(3) Annualised FY25 EBITDA.
07 INVESTMENT RISKS
Asset writedowns
Weighted cap rates across the Mirvac portfolio increased to 5.89% in 1H25 - up from 5.48% in 1H24 - indicating ongoing risks related to capital market volatility and revaluations.
Ballooning construction costs
FY24 residential margins were 17.4%, continued inflationary pressures in the construction industry risk delaying residential settlements and compressing development margins below Mirvac’s through-cycle gross margin target of 18-22%.
Exposure to office sector
Mirvac’s office portfolio remains exposed to structural headwinds from flexible working, evidenced by an 8% decline in office NOI in 1H25. Though its concentration in Premium and A-Grade assets provides partial insulation through strong tenant retention.
Elevated gearing and slower earnings amid asset recycling
FY24 net debt / EBITDA rose to 4.5x and is expected to increase in FY25 amid slower earnings. If the $1bn in asset sales in FY24 (at 11.6% discount to book) is not recycled efficiently this may further dilute earnings.
