Mirvac boost residential supply with lots in Sydney’s south west and Smiths Lane, Clyde North

The developer says it was managing costs

Mirvac boost residential supply with lots in Sydney’s south west and Smiths Lane, Clyde North
Cobbitty, Camden. Image: Mirvac

Listed property developer Mirvac sees an upward trajectory around the economy, and the reopening of international borders as set to help its apartment sales.

Building supply cost issues were being managed.

“Despite the roll off of stimulus measures, we continue to see strong demand from upgraders, right-sizers, and first-home buyers who are attracted to our reputation as a trusted developer, as well as our well-located, quality product," Susan Lloyd-Hurwitz, its chief executive officer noted.

"Broader fundamentals also remain positive, with limited supply, pent up demand and the impending return of overseas migration.

"We are able to effectively manage supply chain impacts and labour shortages related to the pandemic.”

“We’re on an upward trajectory around the economy,” Susan Lloyd-Hurwitz said.

Mirvac has a 50-year history of creating high-quality apartments and masterplanned communities with a $16.4bn residential development pipeline including over 26,000 lots weighted to Sydney and Melbourne. 

It includes lots acquired over the recent quarter at Cobbitty in Sydney’s south west (approximately 950 lots) and additional lots at Smiths Lane in Melbourne (approximately 300 lots).

Their ASX update noted the COVID-19 pandemic presented a number of challenges including supply chain disruptions, labour shortages, and an economic slowdown. 

"These challenges continue to present a risk to Mirvac’s operations," it noted.

“While we had expected to see conditions normalise in the first half of 2022, the spread of Omicron has presented a number of challenges. 

The report noted Mirvac would "continue to closely monitor our operating environment.”

Mirvac posted a 44 per cent jump in first-half profit to $565m after strong residential sales amid the pandemic.

However Mirvac chief executive Susan Lloyd-Hurwitz kept guidance unchanged adding the developer would closely monitor the operating environment.

Mirvac settled 1,303 residential lots and was on track to deliver more than 2,500 lot settlements in FY22. 

It noted defaults over recent months fell back below 2 per cent, in line with historical averages.

It exchanged 1,814 lots during the quarter, with "strong sales" particularly in its Melbourne projects,

The residential pre-sales increased to approximately $1.5bn.

It released over 1,580 lots, including the launch of four major apartment projects in Sydney and Melbourne.

Residential EBIT in 1H22 was 17 per cent higher compared to 1H21, driven by higher lot settlements (up 21 per cent), largely from MPC projects at Smith’s Lane, Tullamore and Woodlea, and our apartment project, Voyager at Yarra’s Edge, all in Melbourne.

It noted a higher development margin in 1H22 has been driven by stronger apartment margins. 

"Strong sales activity is demonstrated by a more than 30 per cent increase in lot exchanges over the prior corresponding period and our pre-sales increasing to $1.5bn.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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