strong office conditions buffer weakening residential market mirvac

The group has responded to an increasingly competitive retail landscape by reweighting its portfolio to the best and most resilient urban markets, focusing on centres that are located in densely populated catchments.

Mirvac’s impressive retail portfolio retained a 99.2 per cent occupancy over the September quarter.

The company sounded out Sydney and southeast Queensland as retail hotspots where spending is still strong.

Earlier this year, softening residential conditions triggered a 6 per cent fall in net profit for the development giant, with revenue down 7 per cent to $2.8 billion from $3.02 the previous year.

In the first quarter of 2019, Mirvac settled 560 residential sales hitting pre-sales of $2.1 billion, and is on track to settle over 2,500 lots.

Sydney and Melbourne’s markets have continued to perform thanks to strong population growth, very low unemployment levels and jobs growth across a number of industries.

“While changes to lending have seen market conditions return to more normalised levels, and as anticipated, sales in some sub-markets are slower, we are still seeing demand for land and medium-density residential product, particularly in Melbourne.”

“This is reflected by strong sales volumes at our masterplanned community releases, such as Olivine and Woodlea.”

Earlier this year, Mirvac established Australia’s first partnership with one of China’s leading travel agencies, Ctrip, in a bid to strengthen retail performance through new channels.

The partnership provides shopping incentives to Chinese tourists in Sydney who shop at Mirvac’s Birkenhead Point outlet centre, in the city’s inner west.

Mirvac also announced the formation of the Australian build-to-rent “club”, tapping into the emerging asset class.

Mirvac’s first purpose-built build-to-rent asset in Australia will be Indigo at Mirvac’s Pavilions project at Sydney Olympic Park, billed for completion in 2021.

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