We Maintain Mirvac's Fair Value Estimate After In-Line First Half and Transfer of Analyst Coverage

Mirvac is best known as one of Australia’s largest residential property developers. But the majority of its earnings are passive, from collecting rents, and investment and property management fees. Active income from selling developed properties is lumpy and volatile. The investment portfolio (passive) accounts for roughly three quarters of total invested capital, and development (active) a quarter. Depending on projects available in the pipeline and the property market cycle, the investment/development split varies year by year. But in general, the group allocates less than 30% of capital to development.