Mirvac has confidence in growth

PROPERTY developer Mirvac Group expects its earnings growth to continue despite serious concerns about housing affordability in parts of the country.

Mirvac’s profit in the year to June 30 rose 13 per cent from the previous year to $1.16 billion, driven by improved values in its investment portfolio, particularly in Sydney and Melbourne, and stronger operational earnings. Its operating earnings before interest and tax were up 17 per cent and it expects earnings to be 6-8 per cent higher in 2017-2018, driven by yield from its investment portfolio, rental growth and returns from its development pipeline.

Mirvac said it is focusing on a shift into the build-to-rent sector – residential products with long-term leases – to address affordability woes.

Chief executive Susan Lloyd-Hurwitz said buying at the right time and in the right locations had ensured Mirvac enjoyed strong margins across a number of its residential projects, particularly in Sydney and Melbourne.

Mirvac’s residential business delivered $302 million in earnings, an increase of 54 per cent.

It will pay an unfranked final dividend of 5.5¢ a share.