Company Reports

In fiscal 2026 Mirvac delivered operating earnings of AUD 12.9 cents per security, or cps, up 7% from last year. Management expects to settle 2,800 to 3,100 lots in fiscal 2027, versus 2,130 this year, sending the security price up 6%.

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-fourths of total invested capital and development (active) one-fourth. 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.

Mirvac sold about 1,900 residential lots in the first three quarters of fiscal 2026, up 28% on the prior corresponding period. Including conditional sales contracts on hand, Mirvac said it's on track to reach its settlement guidance of 2,000-2,300 lots.

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-fourths of total invested capital and development (active) one-fourth. 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.

In first half, Mirvac grew operating profit after tax by 5% to AUD 248 million, or AUD 6.3 cents per security. Residential sales momentum was encouraging, sending securities up 6% Feb. 18. Management reiterated earnings guidance, which is AUD 12.8 cps-AUD 13.0 cps (7%-8% growth from last year).

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.

Building material price inflation has remained moderate year to date, while construction worker wage growth has slowed to 3.3% by the end of June 2025, from a peak of 4.3% in late 2023. The number of builders entering administration has fallen compared with the previous corresponding period.

Mirvac's fiscal 2025 operating earnings and distributions per security both fell 14%, to AUD 12 cents and AUD 9 cents, respectively. Nonetheless, management is sanguine on the outlook for fiscal 2026.

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.

The real estate sector is not immune to the potential economic impact of US tariffs. There is growing uncertainty as the likelihood of slower Australian gross domestic product growth mounts.

Mirvac’s first-half operating earnings per share was down 6% from the previous corresponding period to AUD 6 cents, in line with our expectations. Our fair value estimate remains at AUD 2.50, following transfer of coverage to a new analyst. For fiscal 2025, we expect an operating EPS of AUD 12.2 cents, around the middle of the reaffirmed target range of AUD 12.0-AUD 12.3 cents. Our estimated distribution of AUD 9 cents is also in line with management guidance.

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.

More jobs have been added to office-using sectors. According to the Australian Bureau of Statistics, Australian white-collar job numbers rose 4% in the 12 months to Aug. 31. This is the strongest growth since May 2022. Compared with November 2019, there are 13% more office workers in Australia. The gains were largely contributed by hiring and real estate services, public administration and safety, and education and training sectors.

Mirvac trades as a stapled security, comprising one share in the corporation and one unit in Mirvac Property Trust. About 80% of earnings come from a passive commercial property portfolio housed within Mirvac Property Trust. Earnings from the rent-collecting business are relatively stable and predictable, while most of the remainder comes from a residential development business that can be lucrative but volatile. Mirvac’s REIT status results in low company tax because trusts pass income and tax liabilities through to the end investor. Mirvac pays slightly more tax than some passive real estate investment trusts, because of the development business within the Mirvac corporation.

Mirvac delivered operating earnings per security of AUD 14 cents and a distribution of AUD 10.5 cps in fiscal 2024, broadly in line with management's guidance and our expectations. However, due to cost concerns and margin compression in residential development, management forecasts lower earnings in fiscal 2025, with operating earnings falling by some 13% to AUD 12.0 cps–AUD 12.3 cps and distributions of AUD 9.0 cps, down 14%.

We cut our fair value estimate for no-moat Mirvac by 16% to AUD 2.60 per security, as we transfer coverage to a new analyst. We’ve taken a more cautious view of the group's longer-term outlook, particularly on residential development margins. Even so, Mirvac securities screen as significantly undervalued.

Mirvac trades as a stapled security, comprising one share in the corporation and one unit in Mirvac Property Trust. About 80% of earnings come from a passive commercial property portfolio housed within Mirvac Property Trust. Earnings from the rent-collecting business are relatively stable and predictable, while most of the remainder comes from a residential development business that can be lucrative but volatile. Mirvac’s REIT status results in low company tax because trusts pass income and tax liabilities through to the end investor. Mirvac pays slightly more tax than some passive real estate investment trusts, because of the development business within the Mirvac corporation.

Mirvac trades as a stapled security, comprising one share in the corporation and one unit in Mirvac Property Trust. About 80% of earnings come from a passive commercial property portfolio housed within Mirvac Property Trust. Earnings from the rent-collecting business are relatively stable and predictable, while most of the remainder comes from a residential development business that can be lucrative but volatile. Mirvac’s REIT status results in low company tax because trusts pass income and tax liabilities through to the end investor. Mirvac pays slightly more tax than some passive real estate investment trusts, because of the development business within the Mirvac corporation.

No-moat Mirvac posted first-half fiscal 2024 operating earnings per security of AUD 6.4 cents and a distribution of AUD 4.5 cps. Management reaffirmed full-year guidance for OEPS of AUD 14.0-AUD 14.3 cents per security and distributions totaling AUD 10.5 cps. Our forecasts remain in line with guidance with OEPS of AUD 14.2 cps and DPS of AUD 10.5 cps. We reaffirm our fair value estimate of AUD 3.10, and Mirvac securities screen as significantly undervalued.

The federal government’s migration review was released on Dec. 11 and it suggests high population growth remains the status quo. The review tinkers with various visa rules, but contains no major reduction in migrant numbers, suggesting high migration will persist, relative to precoronavirus levels and versus other developed countries.