Mirvac Group will focus on more residential and mixed use projects to take advantage of the buoyant housing market and to help directors achieve its forecast 1 to 3 per cent earnings growth for the 2015 financial year.
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In its quarterly results, Mirvac said it is on track to settle 2200 residential lots in 2015, with 588 lots settled in the first quarter. It remains on track to release 2700 lots in the same time frame.
The levels of residential pre-sales has seen $1.2 billion of exchanged pre-sales. About $550 million of these are expected to settle in the year to June 30, 2015.
One of the major projects to come on line is at Green Square in South Sydney. Mirvac was to have a launch party on Tuesday, but it was postponed until early next year.
For the year, Mirvac has forecast operating profit of $443 million to $455 million. It reaffirmed its operating earnings forecasts of 12¢ to 12.3¢ per stapled security and full-year distributions of 9.2¢ to 9.4¢ per stapled security.
Property analysts said the forecasts and residential numbers were consistent with market expectations.
Mirvac chief executive Susan Lloyd-Hurwitz said there was no significant evidence from Mirvac's sales data that overseas investors were pushing up housing prices.
"Taking advantage of buoyant conditions in the residential sector, we have a significant release program in the 2015 financial year of over 2700 lots, with a strong focus on projects in Sydney and Brisbane, which is where we have seen the strongest activity," she said.
"We also continue to look at opportunities to restock our residential pipeline to ensure future income for the group, being focused and disciplined in where and how we compete for sites."
The diversified real estate investment trust will also build up its retail and office business, as evidenced by recent deals, including the $300 million acquisition of the Birkenhead Point shopping centre and marina at Drummoyne.
The earnings forecast comes amid the confirmation that Mirvac's joint venture partner, the US's TIAA Henderson Real Estate, has paid $300 million for a 50 per cent stake in 101 Miller Street and the Greenwood Plaza retail centre at North Sydney from Eureka Funds Management. Rob Sewell and Simon Rooney of JLL and CBRE were the agents to the deal.
Mirvac maintains 50 per cent ownership of the office tower and Greenwood Plaza on 101 Miller Street, but will continue to operate 100 per cent of the asset
But Ms Lloyd-Hurwitz, said the group would not pursue deals across all its businesses that do not stack up.
That was evidenced by Mirvac pulling out of the development joint venture of the City Tattersalls site in Sydney's Pitt Street.
Ms Lloyd-Hurwitz told analysts at the briefing that the numbers did not work for Mirvac, so a mutual decision was made with the City Tatts club to end the agreement.
"I won't go into to the details but we made the decision that it was not a deal we wanted to proceed with," Ms Lloyd-Hurwitz said.
