Mirvac Reports 3% EBIT Decline, Eyes $650m Value Creation Pipeline

• 1H25 Group EBIT down 3% to $361 million
• Operating profit after tax declined 6% to $236 million
• Residential pre-sales surged 51% year-on-year to 947 exchanges
• Pro forma gearing steady at 26.3%, with $1 billion raised from asset disposals
• FY25 guidance targets operating EPS of 12.0-12.3 cents and 9.0 cents distribution

Financial Performance Overview

Mirvac Group reported a slight contraction in its first half 2025 financial results, with Group EBIT falling 3% to $361 million and operating profit after tax down 6% to $236 million compared to the prior corresponding period. Despite these modest declines, the company maintained a resilient operating environment, supported by a robust $10.3 billion investment portfolio delivering strong occupancy of 96.2% and positive leasing spreads across office, industrial, retail, and living sectors.

The residential segment showed particular strength, with unconditional exchanges rising 51% to 947 and a pre-sales balance climbing to approximately $1.9 billion. This surge in sales activity, including over 140 apartments sold at the flagship Harbourside development, underpins Mirvac’s confidence in a residential market recovery and future earnings growth.

Strategic Capital Management and Balance Sheet

Mirvac’s balance sheet remains solid, with pro forma headline gearing at 26.3%, comfortably within its target range of 20-30%. The company successfully progressed its disposal program, raising around $340 million from non-core office asset sales, including notable Sydney properties such as 75 George Street and 10-20 Bond Street. These capital recycling initiatives are enabling Mirvac to redeploy funds into higher-return development projects and growth sectors like Build-to-Rent (BTR) and Land Lease communities.

Liquidity remains strong with nearly $1 billion available, and the group refinanced $1.7 billion of debt, including a $400 million green bond issuance, reflecting its commitment to sustainability and funding flexibility. The weighted average cost of debt held steady at 5.7%, with Moody’s and Fitch reaffirming credit ratings at A3/A-.

Development and Growth Outlook

Mirvac is positioning itself for a growth phase starting in FY26, driven by a pipeline of residential and commercial developments. The company forecasts approximately $100 million in new net operating income (NOI) from development completions and anticipates around $650 million in value creation from its committed commercial mixed-use projects. Key projects such as LIV Aston in Melbourne, SEED at Badgerys Creek, and Harbourside in Sydney are expected to contribute significantly to earnings and net tangible asset uplift over the coming years.

Residential margins are expected to improve beyond FY25, following a period of margin compression due to Queensland apartment productivity challenges. Mirvac is also actively partnering with capital partners like Sumitomo and Mitsui Fudosan to unlock value and accelerate project delivery, further enhancing its development platform.

Sustainability and Corporate Culture

Mirvac continues to lead in sustainability, reaffirming its net positive carbon and water targets for 2030. The company has achieved a 5.4 NABERS average carbon rating for its office portfolio and maintains 44% of its debt facilities certified green. Social initiatives, including the '100% Human at Work' award and a strong gender equality ranking, underscore Mirvac’s commitment to workforce engagement and governance excellence.

FY25 Guidance and Market Positioning

For the full year 2025, Mirvac targets operating EPS between 12.0 and 12.3 cents and a distribution of 9.0 cents per stapled security. This guidance assumes continued execution of capital partnering initiatives, residential settlements between 2,000 and 2,500 units, and a weighted average cost of debt around 5.7%. The company’s strategy to expand its living sector exposure, particularly in BTR and Land Lease developments, aligns with strong demographic trends and constrained housing supply, positioning Mirvac well for sustainable growth.

Overall, Mirvac’s 1H25 results reflect a business managing near-term headwinds while laying the groundwork for a return to growth through disciplined capital management, strategic partnerships, and a focus on sustainable, high-quality assets.

Bottom Line?

Mirvac’s steady 1H25 results mask a strategic pivot toward growth sectors and sustainability that could unlock significant value in FY26 and beyond.

Questions in the middle?

• How will Mirvac’s residential margin recovery unfold amid ongoing market uncertainties?
• What impact will capital partnering initiatives have on Mirvac’s balance sheet and earnings visibility?
• Can the company sustain positive leasing spreads and occupancy in its office and industrial portfolios amid evolving market conditions?