Mirvac Property Trust ANNUAL REPORT 2023

==> picture [88 x 49] intentionally omitted <==

MIRVAC PROPERTY TRUST AND ITS CONTROLLED ENTITIES

Annual Report For the year ended 30 June 2023

The consolidated entity comprises Mirvac Property Trust (ARSN 086 780 645) and its controlled entities.

Index	Page
Directors' report	2
Auditor’s independence declaration	7
Consolidated financial statements	8
Consolidated statement of comprehensive income	9
Consolidated statement of financial position	10
Consolidated statement of changes in equity	11
Consolidated statement of cash flows	12
Notes to the consolidated financial statements	13
Directors' declaration	40
Independent auditor’s report to the stapled unitholders of Mirvac Property Trust	41

Mirvac Property Trust and its controlled entities Directors’ report For the year ended 30 June 2023

==> picture [77 x 44] intentionally omitted <==

DIRECTORS’ REPORT

The Directors of Mirvac Funds Limited (ABN 70 002 561 640, AFSL 233121), the Responsible Entity of Mirvac Property Trust (MPT or Trust), present their report, together with the consolidated report of MPT (ARSN 086 780 645) and its controlled entities (consolidated entity) for the year ended 30 June 2023.

MPT and its controlled entities together with Mirvac Limited and its controlled entities form the stapled entity, Mirvac Group (Mirvac or Group).

Responsible Entity

The Responsible Entity of the Trust is Mirvac Funds Limited, an entity incorporated in New South Wales. The immediate parent entity of the Responsible Entity is Mirvac Woolloomooloo Pty Limited (ABN 44 001 162 205), incorporated in New South Wales, and its ultimate parent entity is Mirvac Limited (ABN 92 003 280 699), incorporated in New South Wales.

Directors

The following persons were Directors of Mirvac Funds Limited during the whole of the year and up to the date of this report, unless otherwise stated:

Robert Sindel
Campbell Hanan (appointed 1 March 2023)
Christine Bartlett
Damien Frawley
Jane Hewitt
James M. Millar AM
Samantha Mostyn AO
Peter Nash
John Mulcahy (resigned 31 December 2022)
Susan Lloyd-Hurwitz (resigned 1 March 2023)

Principal activities

The principal continuing activities of the consolidated entity consist of property investment for the purpose of deriving rental income and investments in unlisted funds. There has been no significant change in the principal activities of the consolidated entity during the year.

REVIEW OF OPERATIONS AND ACTIVITIES

FINANCIAL, CAPITAL MANAGEMENT AND OPERATIONAL HIGHLIGHTS

Our diversified and integrated model continued to underpin our resilience to deliver strong, visible cash flows, sustainable distribution growth, and attractive returns for our securityholders.

Key financial highlights for the year ended 30 June 2023:

Loss attributable to the stapled unitholders of MPT of $104 million (2022: $712 million profit)
Operating cash inflow of $501 million (2022: $427 million)
Distributions of $414 million (2022: $402 million), representing 10.5 cents per stapled unit (2022: 10.2 cents per stapled unit)
Net tangible assets per stapled unit of $2.27, down from $2.40 (June 2022)

Refer to the consolidated statement of financial position and notes to the consolidated financial statements, for the consolidated entity’s value of assets and basis used to value its assets.

Mirvac Property Trust and its controlled entities Directors’ report For the year ended 30 June 2023

==> picture [77 x 44] intentionally omitted <==

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

FINANCIAL, CAPITAL MANAGEMENT AND OPERATIONAL HIGHLIGHTS (continued)

Key capital management highlights for the year ended 30 June 2023:

The Trust’s capital structure is monitored at the Mirvac Group level. The Group capital position remains strong, despite the volatility in markets, and the Group continues to deploy capital to advance record development pipeline for the benefit of securityholders. Key capital management highlights related to the Group for the year ended 30 June 2023 include:

a well-diversified maturity profile, which has delivered a weighted average debt maturity of 5 years, with only $250m of debt due for repayment in the next 12 months;
A- and A3 credit rating with stable outlooks from Fitch Ratings and Moody’s Investor Services maintained;
$1.4bn of cash and undrawn debt facilities at 30 June 2023;
gearing slightly above the mid point of our preferred range of 20-30 per cent.

Key operational highlights for the year ended 30 June 2023:

Key drivers of our operational results were:

growth in net operating income, led by development completions at 80 Ann Street, Brisbane and Locomotive Workshop, Sydney;
growth in MPT portfolio from our investment in MWOF; and
improved collection of Covid 19 arrears with cash collection at 99 per cent.

Outlookand risks[1]

Office:

Sentiment within Australia’s major markets has softened, as businesses assess the implications of the broader macroeconomic environment and the impact of new ways of working on office space requirements. Leasing volumes remain steady, with increased activity from tenants looking for less than 1,000 square metres. A focus on wellbeing and sustainability continues, as tenants implement strategies to encourage employees back to the office. Meanwhile, capital demand is becoming increasingly bifurcated, with low investor appetite for secondary assets. This supports Mirvac’s view that the flight to quality theme will continue. Our office portfolio, which is 98 per cent weighted to prime assets and has an average age of 10.3 years, is well placed to benefit from these trends.

Industrial:

Operating fundamentals in the industrial sector remain positive, with strong occupier demand, improved e-commerce penetration, constrained supply, and very low vacancy levels resulting in strong market rental growth. This is helping to mitigate the potential impact of expanding capitalisation rates expansion across our industrial portfolio, as a result of recent interest rate rises. Our industrial portfolio, which is 100 per cent occupied and weighted to Sydney, is expected to benefit from market rent growth and continued capital demand for high-quality, well-located industrial assets, while upcoming development completions are also expected to bolstering our recurring income streams.

Retail:

Sales activity in the retail sector continues to improve, although early signs indicate to a moderation in spending as the impact of interest rate rises and cost of living weighs on household budgets. Momentum in the investment market has also moderated, with economic headwinds and a widening gap in pricing expectations between buyers and owners contributing to the yield expansion. At the same time, Australia’s population is expected to reach its highest level on record in FY24 and remain high in subsequent years relative to pre-pandemic levels. Our east coast and predominantly urban-based retail portfolio is expected to benefit from this as well as very low unemployment.

These statements are future looking and based on our reasonable assumptions at the time they were made. They include possible outlooks for our operating environments, but are subject to external factors outside of the consolidated entity’s control.

Mirvac Property Trust and its controlled entities Directors’ report For the year ended 30 June 2023

==> picture [77 x 44] intentionally omitted <==

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

Significant changes in the state of affairs

Details of the state of affairs of the consolidated entity are disclosed within the Review of Operations and Activities section above.

Interests in the Trust

	2023	2022
	No. units	No. units
	m	m
Total ordinary stapled units issued 3,945 3,942 Stapled units issued under Long-Term Incentive Plan (LTI) and Employee Incentive Scheme (EIS) 1 1
Total stapled units issued 3,946 3,943

Refer to note F2 to the consolidated financial statements for the consolidated entity’s movements in stapled units during the financial year. This includes any stapled units issued and withdrawn during the financial year.

Instruments held by Directors

Particulars of Directors’ interests in the stapled securities of Mirvac or a related body corporate, are as follows:

		Performance	Interests in securities of
	Mirvac stapled	rights/rights to acquire	related entities or related
Director	securities	stapled securities	bodies corporate
Robert Sindel	147,998	-	-
Campbell Hanan1	570,344	1,303,427	-
Christine Bartlett	127,297	-	-
Damien Frawley	32,000	-	-
Jane Hewitt	110,000	-	-
James M. Millar AM	55,172	-	-
Samantha Mostyn AO	74,045	-	-
Peter Nash	106,941	-	-

Campbell Hanan appointed as a Director on 1 March 2023.

Refer to note H3 to the consolidated financial statements for detailed information regarding Directors’ and key management personnel’s interest in the stapled securities of Mirvac including any options granted and exercised over unissued stapled securities.

Fees paid to the Responsible Entity or its associates

Fees paid to the Responsible Entity out of Trust property during the year were $29 million (2022: $28 million). Fees charged by the Responsible Entity represent recovery of costs. No fees were paid out of Trust property to the Directors of the Responsible Entity during the year. Fees paid to the Responsible Entity and its associates out of Trust property during the year are disclosed in note H4 to the consolidated financial statements.

Mirvac Property Trust and its controlled entities Directors’ report For the year ended 30 June 2023

==> picture [77 x 44] intentionally omitted <==

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

Matters subsequent to the end of the year

No events have occurred since the end of the year that have significantly affected or may significantly affect the consolidated entity’s operations, the results of those operations, or state of affairs in future years.

Environmental regulations

The consolidated entity and its business operations are subject to compliance with both Commonwealth and State environment protection legislation. The Board is satisfied that adequate policies and procedures are in place to ensure the consolidated entity’s compliance with the applicable legislation. In addition, the consolidated entity is also subject to the reporting requirements of the National Greenhouse and Energy Reporting Act 2007 and Building Energy Efficiency Disclosure Act 2010 . The consolidated entity is not aware of any incidents that have resulted in material non-compliance with environmental regulations during the financial year.

More information on Mirvac’s sustainability strategy, actions and performance for the year ended 30 June 2023 can be found in the 30 June 2023 Annual Report of the Mirvac Group.

Non-audit services

From time to time, the consolidated entity may engage its external auditor, PricewaterhouseCoopers, to perform services additional to their statutory audit duties. Details of the amounts paid or payable to PricewaterhouseCoopers for audit and non-audit services provided during the year ended 30 June 2023 are set out in note H5 to the consolidated financial statements.

In accordance with the advice received from the Audit, Risk & Compliance Committee (ARCC), the Board is satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 and did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services were reviewed by the ARCC to ensure they did not affect the impartiality and objectivity of the auditor; and
none of the services undermined the general principles relating to auditor independence as set out in Accounting Professional & Ethical Standards 110 Code of Ethics for Professional Accountants , including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Trust, acting as advocate for the Trust or jointly sharing economic risk and rewards.

Insurance of officers

During the year, the Responsible Entity has not indemnified, or entered into any agreement indemnifying against a liability, any person who is or who has been an officer of the Responsible Entity of the Trust. No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to Mirvac Funds Limited.

Mirvac Property Trust and its controlled entities Directors’ report For the year ended 30 June 2023

==> picture [77 x 44] intentionally omitted <==

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 7 and forms part of the Directors’ report.

Rounding of amounts

The amounts in the financial statements have been rounded off to the nearest million (m) dollars in accordance with the ASIC Corporations Instrument 2016/191.

This statement is made in accordance with a resolution of the Directors.

Campbell Hanan Director

Sydney 16 August 2023

==> picture [77 x 59] intentionally omitted <==

Auditor’s Independence Declaration

As lead auditor for the audit of Mirvac Property Trust for the year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Mirvac Property Trust and the entities it controlled during the period.

==> picture [102 x 66] intentionally omitted <==

Voula Papageorgiou Partner PricewaterhouseCoopers

Sydney 16 August 2023

PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999

Liability limited by a scheme approved under Professional Standards Legislation.

Mirvac Property Trust and its controlled entities Consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statement of comprehensive 9 income Consolidated statement of financial position 10 Consolidated statement of changes in equity 11 Consolidated statement of cash flows 12

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A BASIS OF PREPARATION 13	F EQUITY
	F1 Distributions 33
B RESULTS FOR THE YEAR	F2 Contributed equity 33
B1 Segment information 15	F3 Reserves 33
B2 Revenue 15
B3 Expenses 16	G CONSOLIDATED
B4 Events occurring after the end of the year B5 Income tax 16 16	ENTITY STRUCTRUE G1 Controlled entities G2 Parent entity 34 35

	H OTHER DISCLOSURES
C INVESTMENT ASSETS	H1 Contigent liabilities 36
C1 Investment properties 17	H2 Earnings per stapled unit 36
C2 Investments in joint ventures and associates 22	H3 Key management personnel H4 Related parties 37 39
	H5 Auditor’s remuneration 39
D OPERATING ASSETS AND LIABILITIES D1 Receivables D2 Other financial assets D3 Intangible assets D4 Payables D5 Provisions 24 25 25 27 27
E CAPITAL STRUCTURE AND RISKS
E1 Capital management 28
E2 Borrowings and liquidity 28
E3 Cash flow information 29
E4 Financial risk management 30
E5 Fair value measurement of financial instruments 32

These financial statements cover the financial statements for the consolidated entity consisting of Mirvac Property Trust and its controlled entities. The financial statements are presented in Australian currency.

The Responsible Entity of Mirvac Property Trust is Mirvac Funds Limited (ABN 70 002 561 640, AFSL 233121), a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business:

Mirvac Funds Limited

Level 28 200 George Street Sydney NSW 2000.

A description of the nature of the consolidated entity’s operations and its principal activities is included in the Directors’ report on pages 2 to 6, both of which are not part of these financial statements.

The financial statements were authorised for issue by the Directors on 16 August 2023. The Directors have the power to amend and reissue the financial statements.

Through the use of the internet, the Trust has ensured that its corporate reporting is timely and complete. All press releases, financial reports and other information are available in the Investor Centre section on the Group’s website.

Mirvac Property Trust and its controlled entities Consolidated statement of comprehensive income For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

	Note	2023 $m	2022 $m
Revenue B2 742 704 Other income Revaluation gain on investment properties C1 - 348 Share of net profit of joint ventures and associates C2 - 57 Gain on financial instruments - 4 Gain on sale of assets - 1
Total revenue and other income 742 1,114
Revaluation loss on investment properties C1 396 - Loss on disposal of assets 22 - Investment property expenses and outgoings B3 198 205 Amortisation expenses 58 68 Impairment loss on receivables - 31 Share of net loss of joint ventures and associates C2 42 - Finance costs B3 97 61 Loss on financial instruments 2 - Responsible Entity fees H4 29 28 Other expenses 2 9
(Loss)/profit before income tax (104) 712
Income tax expense B5 - -
(Loss)/profit for theyear attributable to stapled unitholders (104) 712
Other comprehensive income that may be reclassified to profit or loss
Other comprehensive income for theyear - -
Total comprehensive (loss)/income for the year attributable to stapled unitholders (104) 712
Earnings per stapled unit attributable to stapled unitholders Cents Cents Basic earnings per stapled unit H2 (2.6) 18.1 Diluted earnings per stapled unit H2 (2.6) 18.1

The above consolidated statement of comprehensive income (SoCI) should be read in conjunction with the accompanying notes.

Mirvac Property Trust and its controlled entities Consolidated statement of financial position As at 30 June 2023

==> picture [78 x 44] intentionally omitted <==

	Note	2023 $m	2022 $m
Current assets
Cash and cash equivalents 37 34 Receivables D1 24 24 Other assets 18 18 Assets classified as held for sale C1 759 -
Total current assets 838 76
Non-current assets Investment properties C1 8,929 10,341 Investments in joint ventures and associates C2 1,884 1,299 Other financial assets D2 59 62 Intangible assets D3 43 43
Total non-current assets 10,915 11,745
Total assets 11,753 11,821
Current liabilities Payables D4 278 220 Provisions D5 209 201
Total current liabilities 487 421
Non-current liabilities Borrowings E2 2,269 1,891 Lease liabilities 7 7
Total non-current liabilities 2,276 1,898
Total liabilities 2,763 2,319
Net assets 8,990 9,502
Equity Contributed equity F2 5,394 5,388 Reserves F3 5 5 Retained earnings 3,591 4,109
Total equity attributable to the stapled unitholders 8,990 9,502

The above consolidated statement of financial position (SoFP) should be read in conjunction with the accompanying notes.

Mirvac Property Trust and its controlled entities Consolidated statement of changes in equity For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

	Attributable to stapled unitholders	Attributable to stapled unitholders	Attributable to stapled unitholders	Attributable to stapled unitholders
	Contributed equity	Reserves	Retained earnings	Total equity
	$m	$m	$m	$m
Balance 30 June 2021	5,374 5 3,799 9,178
Profit for the year Other comprehensive income for theyear	- - 712 712 - - - -
Total comprehensive income for theyear	- - 712 712
Transactions with owners in their capacity as owners Unit-based payments Expense recognised – Employee Exemption Plan (EEP) F2 Long-term incentives (LTI) vested F2 Distributions F1	1 - - 1 13 - - 13 - - (402) (402)
Total transactions with owners in their capacity as owners	14 - (402) (388)
Balance 30 June 2022	5,388 5 4,109 9,502
Loss for the year Other comprehensive income for theyear	- - (104) (104) - - - -
Total comprehensive income for theyear	- - (104) (104)
Transactions with owners in their capacity as owners Unit-based payments Expense recognised – EEP F2 LTI vested F2 Distributions F1	- - - - 6 - - 6 - - (414) (414)
Total transactions with owners in their capacity as owners	6 - (414) (408)
Balance 30 June 2023	5,394 5 3,591 8,990

The above consolidated statement of changes in equity (SoCE) should be read in conjunction with the accompanying notes.

Mirvac Property Trust and its controlled entities Consolidated statement of cash flows For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

	Note	2023 $m	2022 $m
Cash flows from operating activities Receipts from customers (inclusive of GST) 762 654 Payments to suppliers(inclusive of GST) (230) (211)
532 443 Distributions received from joint ventures and associates 65 50 Distributions received 2 1 Interestpaid B3 (98) (67)
Net cash inflows from operating activities E3 501 427
Cash flows from investing activities Payments for investment properties (224) (213) Proceeds from sale of investment properties 442 401 Contributions to joint ventures and associates (694) (246) Deconsolidation of cash and cash equivalents upon disposal of controlled entity - (2) Return of capital from investments 1 17
Net cash outflows from investing activities (475) (43)
Cash flows from financing activities Proceeds from loans from entities related to Responsible Entity 1,267 814 Repayments of loans to entities related to Responsible Entity (889) (807) Proceeds from issue of stapled units 5 14 Distributionspaid (406) (402)
Net cash outflows from financing activities (23) (381)
Net increase in cash and cash equivalents 3 3 Cash and cash equivalents at the beginningof theyear 34 31
Cash and cash equivalents at the end of theyear 37 34

The above consolidated statement of cash flows (SoCF) should be read in conjunction with the accompanying notes.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

A BASIS OF PREPARATION

Mirvac Group – stapled securities

A Mirvac Group stapled security comprises one Mirvac Limited share ‘stapled’ to one unit in the Trust to create a single listed security traded on the Australian Securities Exchange (ASX). The stapled securities cannot be traded or dealt with separately. Mirvac Limited (the deemed parent entity) and Mirvac Funds Limited (as Responsible Entity for MPT) have common directors and operate as Mirvac Group. Mirvac Limited and MPT have a Deed of Cooperation to recharge each other on a cost recovery basis, where permitted by law, to maintain the best interests of Mirvac as a whole.

The stapled security structure will cease to operate on the first of:

Mirvac Limited or MPT resolving by special resolution in a general meeting, and in accordance with its Constitution, to terminate the stapled security structure;
Mirvac Limited or MPT commencing winding up.

The ASX reserves the right (but without limiting its absolute discretion) to remove entities with stapled securities from the official list if their securities cease to be stapled together, or either entity issues any equity securities of the same class that are not stapled.

Mirvac Limited and MPT remain separate legal entities in accordance with the Corporations Act 2001. For accounting purposes, Mirvac Limited has been deemed the parent entity of Mirvac Group.

Statement of compliance

These consolidated financial statements are general purpose financial statements. They have been prepared in accordance with Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board, the Corporations Act 2001 and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Basis of preparation

The consolidated entity is a for-profit entity for the purpose of preparing the financial statements.

These financial statements have been prepared on a going concern basis, using historical cost conventions except for investment properties, investment properties under construction and other financial assets and financial liabilities that have been measured at fair value.

All figures in the financial statements are presented in Australian dollars and have been rounded off to the nearest million (m) dollars in accordance with ASIC Corporations Instrument 2016/191, unless otherwise indicated.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

Basis of preparation (continued)

Critical accounting estimates and judgements

The preparation of financial statements requires estimation and judgement. The areas involving a higher degree of estimation or judgement are discussed in the following notes:

	Note		Note
Investment properties C1 Fair value measurement of financial instruments E5 Investments in joint ventures and associates C2 Intangible assets D3

Comparative information

Where necessary, comparative information has been restated to conform to the current year’s disclosures and are presentational in nature. These had no impact to the reported net assets or profit for the year ended 30 June 2023.

New and amended standards adopted by the Trust

Amended standards and interpretations adopted by the consolidated entity for the year ended 30 June 2023 have not had a significant impact on the current period or any prior period and are not likely to have a significant impact in future periods. These are listed below:

AASB 2020-3 Amendments to Australian Accounting Standards –Annual Improvements 2018–2020 and Other Amendments [AASB 1, AASB 3, AASB 9, AASB 116 & AASB 137 & AASB 141].

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

B RESULTS FOR THE YEAR

This section explains the results and performance of the consolidated entity, including detailed breakdowns and analysis.

B1 SEGMENT INFORMATION

The consolidated entity is a single segment for reporting to the Executive Leadership Team (ELT). The ELT is the chief operating decision maker of the consolidated entity.

The consolidated entity operates predominantly in Australia. No single customer in the current or prior year provided more than 10 per cent of the consolidated entity’s revenue.

B2 REVENUE

The consolidated entity’s revenue is principally property rental revenue. Property rental revenue comes from holding properties as investment properties and earning rental yields over time.

Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade allowances and duties and taxes paid. The consolidated entity recognises revenue from the transfer of services over time in the following revenue stream:

Property rental revenue

Lease revenue

The consolidated entity invests in properties for rental yields and capital appreciation. Rental revenue from investment properties is recognised on a straight-line basis over the lease term, net of any incentives. Modifications to the leases are accounted for as a new lease from the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new lease.

Services revenue

The consolidated entity also provides services to the lessees which primarily consist of general building management and operations in accordance with their lease agreements. Service income, representing the recovery of associated costs from the lessees, is recognised over time when the services are provided.

	2023 $m	2022 $m
Revenue
Lease revenue 582 580 Service revenue 100 99 Otherpropertyrental revenue 24 9
Total property rental revenue 706 688
Other revenue 36 16
Total revenue 742 704

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

B3 EXPENSES

Investment property expenses

Investment property expenses relate to those costs that are required to be incurred to allow for the occupation and maintenance of investment properties in order to continue to earn rental revenue. Expenses include statutory levies, insurance and other property outgoings and are recognised on an accruals basis.

	2023 $m	2022 $m
Profit before income tax includes the following specific expenses: Statutory levies 41 39 Insurance 7 5 Power and gas 23 22 Property maintanence 49 52 Otherpropertyexpenses 78 87
Total investmentproperty expenses and outgoings 198 205
Interest paid/payable 98 67 Interest capitalised (1) (6)
Total finance costs 97 61

B4 EVENTS OCCURRING AFTER THE END OF THE YEAR

No events have occurred since the end of the year which have significantly affected or may significantly affect the consolidated entity’s operations, the results of those operations, or state of affairs in future years.

B5 INCOME TAX

The consolidated entity’s profit is earned by trusts which are not subject to taxation. Income from the trusts is instead attributed to unitholders who pay income tax at their marginal tax rates.

Tax allowances for depreciation are distributed to the stapled unitholders as a tax deferred component of the distribution.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

C INVESTMENT ASSETS

…………………………………………………………………………………………………

This section includes investment properties and investments in joint ventures and associates. They represent the core assets of the business and drive the value of the consolidated entity.

C1 INVESTMENT PROPERTIES

The consolidated entity holds a property portfolio for long-term rental yields and capital appreciation. Depending on the specific arrangements for each property, they are classified as investment properties or properties held through joint ventures and associates.

Investment properties

Investment properties are properties owned by the consolidated entity. Investment properties include investment properties under construction, which will become investment properties once construction is completed.

The consolidated entity accounts for its investment properties at fair value. Revaluation gains are recognised as Other income and revaluation losses are recognised as an expense. The fair value movements are non-cash and do not affect the consolidated entity’s distributable income.

Judgement in fair value estimation

Fair value is the price that would be received to sell an asset in an orderly transaction between market participants. For all investment property that is measured at fair value, the existing use of the property is considered the highest and best use.

The consolidated entity assesses its property portfolio for environmental risks and incorporates sustainability initiatives where appropriate in determining the fair value of investment properties.

The fair value of properties are calculated using a combination of market sales comparisons, discounted cash flows and capitalisation rates.

To assist with calculating reliable estimates, the consolidated entity uses independent valuers on a rotational basis. Approximately 25 per cent of the portfolio is independently valued every six months, with management internally estimating the fair value of the remaining properties using estimation techniques by suitably qualified personnel. As at 30 June 2023, the consolidated entity undertook independent valuations covering 42 per cent of its investment property portfolio by value, excluding IPUC.

The fair value is a best estimate but may differ from the actual sales price if the properties were to be sold. The key judgements for each valuation method are explained below:

Discounted cash flow (DCF): Projects a series of cash flows over the property’s life and a terminal value, discounted using a discount rate to give the present value.The projected cash flows incorporate expected rental income (based on contracts or market rates), operating costs, lease incentives, lease fees, capital expenditure, and a terminal value from selling the property. The terminal value is calculated by applying the terminal yield to the net market income. The discount rate is a market rate reflecting the risk associated with the cash flows, the nature, location and tenancy profile of the property relative to comparable investment properties and other asset classes.

Capitalisation rate: The rate or yield at which the annual net income from an investment is capitalised to ascertain its capital value at a given date. The annual net income is based on contracted rents, market rents, operating costs and future income on vacant space. The capitalisation rate reflects the nature, location and tenancy profile of the property together with current market evidence and sales of comparable properties.

Direct comparison approach: Utilises recent sales of comparable properties, adjusted for any differences, including the nature, location, town planning/zoning, flooding and environmental impediments.

Investment properties under construction: There generally is not an active market for investment properties under construction (IPUC). Due to the inherent difficulty in valuing IPUC, fair value will typically be capitalised costs to date. Where a valuation is performed, fair value is measured using either the capitalisation rate, DCF or residual valuations. Capitalisation rate and DCF valuations for investment properties under construction are as described above, but also consider the costs and risks of completing construction and letting the property.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

C1 INVESTMENT PROPERTIES (continued)

Residual: Estimates the value of the completed project, less the remaining development costs, which include construction, finance costs and an allowance for the developer’s risk and profit. This valuation is then discounted back to the present value.

Lease incentives

The carrying amount of investment properties includes lease incentives provided to tenants. Lease incentives are capitalised and recognised on a straight-line basis over the lease term as a reduction of net property income.

Ground leases

A lease liability reflecting the leasehold arrangements of investment properties is separately disclosed in the consolidated SoFP and the carrying value of the investment properties is adjusted (i.e. increased) so that the net of these two amounts equals the fair value of the investment properties. The lease liabilities are calculated as the net present value of the future lease payments discounted at the incremental borrowing rate.

At 30 June 2023, $7 million of lease liabilities for ground leases has been recognised in the consolidated SoFP (2022: $7 million).

Lease liabilities are subsequently measured by:

increasing the carrying amount to reflect interest on the lease liability;
reducing the carrying amount to reflect the lease payments made;
remeasuring the carrying amount to reflect any reassessment or lease modifications.

Some ground leases contain variable payment terms that are linked to sales generated. Variable lease payments that depend on sales are recognised in the consolidated SoCI in the period in which the condition that triggers those payments occurs. Interest on the lease liabilities and any variable lease payments not included in the measurement of the lease liabilities are recognised in the consolidated SoCI in the period to which they relate.

Derecognition of investment properties

Investment properties are reclassified from non-current to current assets held for sale when they satisfy the conditions under AASB 5 Non-current Assets Held for Sale and Discontinued Operations.

For reclassification to occur, the disposal of the investment property must be highly probable with an exchanged contract and settlement pending. Once control of an investment property transfers to a purchaser, usually upon settlement, the consolidated entity will derecognise the book value of the investment property with any resultant gain or loss recognised in the consolidated SoFP. During the year the consolidated entity transferred $759m of investment properties to Assets classified as held for sale (2022:nil).

Commitments

At 30 June 2023, capital commitments on the consolidated entity’s investment property portfolio were $89 million (2022: $91 million). There were no investment properties pledged as security by the consolidated entity (2022: nil).

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

C1 INVESTMENT PROPERTIES (continued)

Movements in investment properties

	2023	2022
	Total	Total
	$m	$m
Balance 1 July 10,341 10,652 Expenditure capitalised 231 298 Acquisitions 71 610 Disposals (459) (880) Transfers to Assets classified as held for sale (759) - Net revaluation (loss)/gain from fair value adjustments (396) 348 Transfer to joint ventures and associates - (579) Amortisation expenses (100) (108)
Balance 30 June 8,929 10,341

Total investmentproperties 8,741 10,261
Total investmentproperties under construction 188 80

Fair value measurement and valuation basis

The basis of valuation of investment properties is fair value. Fair values are based on market values, being the price that would be received to sell an asset in an orderly transaction between market participants at the reporting date.

Investment properties are measured as Level 3 financial instruments. Refer to note E5 for explanation of the levels of fair value measurement. The following are the unobservable inputs used in determining the fair value measurement of investment properties. Movement in any of the unobservable inputs is likely to have an impact on the fair value of investment property. The higher the net market income or 10-year compound annual growth rate, the higher the fair value. The higher the capitalisation rate, terminal yield or discount rate, the lower the fair value.

The key inputs and sensitivity to changes are explained below.

	Unobservable inputs	Details
	Capitalisation rate	The rate at which net market income is capitalised to determine the value of a property.
	Discount rate	The rate of return used to convert a monetary sum, payable or receivable in the future, into present value. This should reflect the opportunity cost of capital, that is, the required rate of return the capital can earn if put to other uses having regard to a similar risk profile.
	Terminal yield	The capitalisation rate used to convert income into an indication of the anticipated value of the property at the end of the holding period when carrying out a discounted cash flow calculation.
	Market rent and growth rate	The rent at which a tenancy could be leased in the market including rental growth in future years at the date of valuation. Market rent includes gross rent and net rent. Gross rent is where outgoings are incorporated in the rent being paid. Net market rent is where the owner recovers outgoings from the tenant on a pro-rata basis.
	Market rate	The market rate per square metre uses recent transactional evidence of comparable properties to determine the fair value of the investment property under the direct comparison method.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

C1 INVESTMENT PROPERTIES (continued)

The DCF, capitalisation rate, residual valuation and direct comparison methods all use unobservable inputs in determining fair value; ranges of the inputs are included below per asset class:

Sector	Level 3 fair value	Inputs used to measure fair value	Inputs used to measure fair value	Inputs used to measure fair value	Inputs used to measure fair value	Inputs used to measure fair value	Inputs used to measure fair value
		Net market income	10-year compound annual growth rate	Capitalisation rate	Market rate	Terminal yield	Discount rate
	$m	$/sqm	%	%	$/sqm	%	%
2023
Office	5,253	350.0 – 1,367.0 3.30 – 4.10 4.88 – 5.88 - 5.13 – 6.38 6.13 – 6.50
Industrial	1,324	150.0 – 448.6 3.47 – 3.62 4.25 – 5.25 - 4.50 – 5.50 5.75 – 6.63
Retail	2,352	327.0 – 880.0 2.21 – 4.02 5.00 – 8.75 - 5.25 – 9.00 6.25 – 10.0
Total	8,929	- - - - - -
2022
Office	6,445 1,242 2,654 10,341	365.0 – 1,199.0 2.60 – 4.20 4.50 – 6.75 - 4.75 – 7.00 6.00 – 7.25 110.0 – 410.0 3.27 – 3.32 3.50 – 5.00 - 3.75 – 5.25 4.88 – 6.25 314.0 – 1,127.0 1.87 – 4.13 4.75 – 8.75 865 – 1,612 5.00 – 9.00 6.00 – 9.50 - - - - - -
Industrial
Retail
Total

Sensitivity analysis

Due to the uncertain economic climate and the judgement required to assess the fair value of the consolidated entity’s investment properties, a sensitivity analysis has been undertaken to further stress test the assessment of fair value as at 30 June 2023.

The following sensitivity analysis is based on upward and downward movement scenarios of 25 bps and 50 bps on the movement of capitalisation rates, discount rates, and terminal yields per asset class compared to the capitalisation rates, discount rates, and terminal yields adopted by the consolidated entity as at 30 June 2023. These are considered to be the key unobservable inputs that would be expected to have the most material impact on the fair values adopted if they moved. Valuations use a blended capitalisation rate and DCF approach whereby the current market income and the cash flow of the investment property are considered to determine the final fair value. Varying the capitalisation rates alone will only impact the valuation derived through the capitalisation method and has no impact on the DCF analysis. A change in discount rate and terminal capitalisation rate will only impact the DCF valuation. Accordingly, all three metrics need to be moved proportionately to ensure a consistent methodology when performing the sensitivity analysis.

Presented below is the outcome of the sensitivity analysis as the decrement or increment to the fair value of each asset class of the consolidated entity’s investment property portfolio (including Office JVA but excluding IPUC and development assets) should the unobservable inputs increase or decrease by 25 bps or 50 bps. For example, an increase of 25 bps of the capitalisation rate, discount rate and terminal yield in the consolidated entity’s Office portfolio would have resulted in a decrement of $329m in addition to the fair value presented as at 30 June 2023.

Investment properties at fair value assessed using DCF, market capitalisation and capitalisation rate	Capitalisation rate, discount rate and terminal yield movement by
	25 bps $m 25 bps $m 50 bps $m 50 bps $m
Office Industrial Retail	(329) 369 (693) 778 (72) 81 (138) 172 (103) 113 (198) 229
Total	(504) 563 (1,029) 1,179

For investment properties at fair value assessed using the direct comparison approach, a sensitivity analysis was performed. Using an increase of 5 per cent in the rate per square metre and a decrease of 5 per cent in the rate per square metre, the impact to the fair value presented as at 30 June 2023 was not material.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

C1 INVESTMENT PROPERTIES (continued)

Future committed operating lease receipts

Lease revenue from investment properties is accounted for as operating leases. The revenue from lease is recognised in the consolidated SoCI on a straight-line basis over the lease term. Future receipts are shown as undiscounted contractual cash flows.

	2023 $m	2022 $m
Future operating lease receipts as a lessor Within one year 461 503 Between one and five years 1,449 1,649 Later than fiveyears 1,150 1,512
Total future operating lease receipts as a lessor 3,060 3,664

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

C2 INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

A joint venture (JV) is a joint arrangement where the Trust has joint control over the activities and joint rights to the net assets. An associate is an entity over which the Trust has significant influence, and that is neither a subsidiary nor an interest in a joint venture. Refer to note G1 for details on how the Trust decides if it controls an entity.

The Trust initially records its JVAs at the cost and subsequently accounts for them using the equity method. Under the equity method, the Trust’s share of the JVA’s profit or loss is added to/deducted from the carrying amount each year. Distributions received or receivable are recognised by reducing the carrying amount of the JVA.

All JVAs are established or incorporated in Australia.

The table below provides summarised financial information for those JVAs that are significant to the Trust. The information below reflects the total amounts presented in the financial statements of the relevant JVAs and not the Trust’s share. The information has been amended to reflect any unrealised gains or losses on transactions between the Trust and its JVAs.

Mirvac 8 Chifley Trust Mirvac (Old Treasury) Trust The George Street Trust Mirvac Locomotive Trust	Mirvac Switchyard Trust1 Mirvac Wholesale Office Fund2 Total
2023 2023 2023 2023	2023 2023 2023
$m $m $m $m	$m $m $m
Primary Activities Property investment Property investment Property investment Property investment Accounting Classfication Joint Venture Joint Venture Joint Venture Joint Venture Summarised SoFP Cash and cash equivalents 9 6 1 3 Other current assets 1 1 9 2	Property investment Property investment Joint Venture Associate
	-
	1
Total current assets 10 7 10 5	1 65 98
Total non-current assets 441 512 1,087 443	362 7,359 10,204
Other current liabilities 7 8 11 5	-
Total current liabilities 7 8 11 5	- 652 683
Total non-current liabilities - - - -	- 969 969
Net assets 444 511 1,086 443	363 5,803 8,650
Trust’s share of net assets(%) 50 50 50.1 51	49 7.9
Trust’s share of net assets ($m) 222 255 544 226	178 459 1,884
Carrying amount in consolidated SoFP 222 255 544 226	178 459 1,884
Summarised SoCI Revenue 23 42 63 31
	13 112 284
Profit after tax (8) 45 (25) (11)	120 (558) (437)
Total comprehensive income/ (loss) (8) 45 (25) (11)	120 (558) (437)
Trust’s share of profit/(loss) after tax(%) 50 50 50.1 51	49 7.9
Trust’s share of profit/(loss) after tax ($m) (4) 22 (13) (6)	(6) (36) (43)
Distributions received/receivable from JVAs 35 44 41 16	6 5 147

1 On 8 September 2022, the Trust acquired 49 per cent of the units in Duck River Auburn Trust (later renamed MIV Switchyard Trust) for consideration of $138m and is accounted for as a Joint Venture. The MIV Switchyard Trust holds investment property at 300 Manchester Road, Auburn NSW.

2 Mirvac Property Trust invested $500m in Mirvac Wholesale Office Fund (MWOF) in two tranches, $229m in March 2023 and $271m in May 2023, equating to 7.9% ownership of MWOF. The investment is accounted for as an Associate.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

C2 INVESTMENTS IN JOINT VENTURES AND ASSOCIATES (continued)

Mirvac 8 Chifley Trust Mirvac (Old Treasury) Trust The George Street Trust Mirvac Locomotive Trust	Total
2022 2022 2022 2022	2022
$m $m $m $m	$m
Primary Activities Property investment Property investment Property investment Property investment Accounting Classification Joint Venture Joint Venture Joint Venture Joint Venture Summarised SoFP Cash and cash equivalents 7 6 4 4 Other current assets 1 1 12 3	21 17
Total current assets 8 7 16 7	38
Total non-current assets 462 497 1,159 471	2,589
Other current liabilities 7 7 18 7	39
Total current liabilities 7 7 18 7	39
Total non-current liabilities - - - -	-
Net assets 463 497 1,157 471	2,588
Trust’s share of net assets(%) 50 50 50.1 51
Trust’s share of net assets ($m) 232 248 579 240	1,299
Carrying amount in consolidated SoFP 232 248 579 240	1,299
Summarised SoCI Revenue 23 42 50 20	135
Profit after tax 20 38 42 14	114
Total comprehensive income/ (loss) 20 38 42 14	114
Trust’s share of profit/(loss) after tax (%) 50 50 50.1 51
Trust’s share of profit/(loss) after tax($m) 10 19 21 7	57
Distributions received/receivable from JVAs 24 29 19 8	80

Capital expenditure commitments

At 30 June 2023, the consolidated entity’s share of its JVA’s capital commitments approved but not yet provided for was $2 million (2022: $1 million).

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

D OPERATING ASSETS AND LIABILITIES

D1 RECEIVABLES

Receivables are initially recognised at fair value. Receivables are subsequently measured at amortised cost using the effective interest rate method, less loss allowance if required. Due to the short-term nature of current receivables, their carrying amount (less loss allowance) is assumed to be the same as their fair value.

The Expected Credit Loss (ECL) of receivables is reviewed on an ongoing basis. The consolidated entity applies the simplified approach to measuring ECL as appropriate based on the different characteristics of each financial asset class. To measure the ECL, management has grouped together the consolidated entity’s receivables based on shared credit risk characteristics and the days past due. The consolidated entity uses judgement in making assumptions about risk of default and ECL rates and the inputs to the impairment calculation, based on the consolidated entity’s past history, existing market conditions and future looking estimates at the end of each reporting period. Receivables that are known to be uncollectable are written off.

	2023	2023	2023	2022	2022	2022
	Gross	Loss allowance	Net	Gross	Loss allowance	Net
	$m	$m	$m	$m	$m	$m
Trade receivables 11 (9) 2 17 (17) - Accrued income 22 - 22 24 - 24
Total receivables 33 (9) 24 41 (17) 24

Ageing

		Days past due	Days past due	Days past due	Days past due	Days past due
	Not past due	1 - 30	31 - 60	61 - 90	91 - 120	Over 120	Total
2023
Total receivables 22 3 1 1 1 5 33
Loss allowance - (1) (1) (1) (1) (5) (9)
Balance 30 June 2023 22 2 - - - - 24
2022 Total receivables 24 1 1 2 2 11 41 Loss allowance - (1) (1) (2) (2) (11) (17)
Balance 30 June 2022 24 - - - - - 24

Loss allowance

	2023 $m	2022 $m
Balance 1 July (17) (20) Loss allowance recognised - (31) Amounts utilised for write-off of receivables 8 34
Balance 30 June (9) (17)

The consolidated entity does not have any significant credit risk exposure to a single customer. The consolidated entity holds $133 million of tenant collateral (2022: $136 million), primarily in the form of bank guarantees. The terms and conditions of the collateral are outlined in the lease agreements, however generally as a lessor, the consolidated entity has the right to call upon the collateral if a lessee breaches their lease. Refer to note E4 for further details on the consolidated entity’s exposure to, and management of, credit risk.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

D2 OTHER FINANCIAL ASSETS

Units in unlisted funds

The Trust may hold units in unlisted funds that do not give the Trust control or significant influence, as explained in note G1.These units are accounted for at fair value. Distributions received are recognised in revenue and any changes in fair value are recognised in the gain or loss on financial instruments in the consolidated SoCI.

Units in unlisted funds are traded in inactive markets and therefore the fair value is estimated based on the value of the underlying assets held by the funds.

Fair value of other financial assets is determined by giving consideration to the unit prices and net assets of the underlying funds. These are largely driven by the fair values of investment properties held by the funds.

	2023 $m	2022 $m
Non-current Units in unlisted funds 59 62
Total non-current other financial assets 59 62

D3 INTANGIBLE ASSETS

Goodwill

	2023 $m	2022 $m
Balance 1 July 43 43
Balance 30 June 43 43

Impairment testing

Goodwill acquired in a business combination is tested annually for impairment. Goodwill is impaired if the recoverable amount, calculated as the higher of the value in use and the fair value less costs to sell, is less than its carrying amount. For the purpose of assessing impairment, assets are grouped at the lowest levels for which goodwill is monitored for internal management purposes and allocated to cash generating units (CGU). The estimation of the recoverable amount of goodwill depends on the nature of the CGU. For the consolidated entity CGU, the value in use is the discounted present value of estimated cash flows that the CGU will generate, which primarily comprise of the consolidated entity’s investment properties in Office, Industrial and Retail operating segments.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

D3 INTANGIBLE ASSETS (continued)

Impairment testing (continued)

The key assumptions used to determine the forecast cash flows include net market rent, capital expenditure, growth rate, discount rate and market conditions.

Key assumption	Details of key assumption	Inputs used
Net market rent The rent at which a tenancy could be leased in the market including outgoings recovery. Lease specific assumptions including let up periods and incentives
Other cash flows These cash flows are minimal in comparison to the rental cash flows but form part of the Investments CGU. Cash flows from the Investment CGU and the associated Management & Administration expense
Capital expenditure The amount of additional investment required to upgrade or maintain the consolidated entity’s investment properties. Investment property assumptions based on the age and condition of the property
Growth rate The rate at which cash flows will grow over time. The growth rate has been adjusted to reflect current market conditions and does not exceed the long-term average growth rate. The cash flow projections are based on management approved forecasts covering an initial period of 5 years and the subsequent 5 years are based on a growth rate. 3.2% (2022: 3.0%-3.5%)
Cash flow period AASB 136 Impairment of Assets recommends that cash flow projections should cover a maximum period of 5 years, unless a longer period can be justified. As the cash flow projections used for budgeting and forecasting are based on long-term, predictable and quantifiable leases, with renewal assumptions based on asset class and industry experience, management is comfortable that a 10 year cash flow projection is appropriate. 10 years (2022: 10 years)
Terminal growth rate The constant rate that cash flows are expected to grow at into perpetuity. 3.00% (2022: 2.5%)
Pre-tax discount rate The rate of return used to convert cash flows into present value; these are specific to the risks of each of the cash flows within the consolidated entity. This includes using the weighted investment property portfolio discount rate, which was 6.3% as at 30 June 2023 (2022: 6.1%). In the prior year, a premium adjustment was applied to this rate on the basis that a prospective purchaser would expect there to be multiple benefits to acquiring a portfolio of assets. 6.3% (2022: 5.8-11.5%)

Sensitivity

If the cash flow projections used in the value in use calculations increased or decreased the pre-tax discount rate by 50 bps, and the terminal growth rate or growth rate were increased or decreased by 50 bps, and 100bps respectively, the consolidated entity would have sufficient headroom and this would not result in an impairment.

Based on information available, and market conditions as at 30 June 2023 and up to the date of this report, management have considered that a reasonably foreseeable change in the other assumptions used in the goodwill assessment would not result in an impairment to the value of goodwill as at 30 June 2023 (2022: nil).

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

D4 PAYABLES

Payables are measured at amortised costs. Due to the short-term nature of current payables, their carrying amount is assumed to be the same as their fair value. For the majority of non-current payables, the carrying amount is also not significantly different to their fair value.

Trade payables due more than 12 months after year end are classified as non-current.

	Note	2023 $m	2022 $m
Current Trade payables 17 3 Rent in advance 31 25 Other accruals 105 113 Other creditors 10 3 Amounts due to relatedparties H4 115 76
Total currentpayables 278 220

D5 PROVISIONS

A provision is made for the amount of any distribution declared at or before the end of the year but not distributed by the end of the year. Refer to note F1 for further details.

	2023 $m	2022 $m
Distributions payable Balance 1 July 201 201 Interim and final distributions declared 414 402 Payments made (406) (402)
Balance 30 June 209 201

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

E CAPITAL STRUCTURE AND RISKS

This section outlines the market, credit and liquidity risks that the consolidated entity is exposed to, and how it manages these risks. Capital comprises unitholders’ equity and net debt (borrowings less cash).

E1 CAPITAL MANAGEMENT

The consolidated entity’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so that it can provide returns to unitholders and aim to address the market, credit and liquidity risks while also meeting the Group’s strategic objectives.

The consolidated entity’s capital structure is monitored at the Group level. The Group’s target credit rating is Fitch A- and Moody’s A3 which was maintain as at 30 June 2023. The Group’s target gearing ratio is between 20 and 30 per cent.

If the Group wishes to change its gearing ratio, it could adjust its dividends/distributions, issue new equity (or buy back securities), or sell property to repay borrowings.

At 30 June 2023, the Group was in compliance with all debt covenants.

E2 BORROWINGS AND LIQUIDITY

The consolidated entity borrows using loans from related parties.

The consolidated entity has one loan facility from a related party. The total facility limit as at 30 June 2023 is $3,000 million (2022: $2,500 million) and can be drawn in Australian or US dollars. The facility expires on 15 December 2029. Interest accrues at the related party’s cost of financing from their borrowing facilities, calculated including associated derivative financial instruments.

At 30 June 2023, the consolidated entity had $731 million of undrawn facilities available (2022: $609 million).

		2023	2023	2023	2023	2023		2022	2022	2022	2022	2022
	Floating interest rate	Fixed interest maturing in:				Total	Floating interest rate	Fixed interest maturing in:				Total
		Less than 1 year	1 to 2 years	2 to 5 years	Over 5 years			Less than 1 year	1 to 2 years	2 to 5 years	Over 5 years
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Loans from related party	2,269	- - - - 2,269 1,891						- - - - 1,891

Borrowings are initially recognised at fair value, net of transaction costs. Borrowings are subsequently measured at amortised cost using the effective interest rate method. The fair value of borrowings is considered to approximate their carrying amount as the interest rates are variable.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

E3 CASH FLOW INFORMATION

For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash at bank and short-term deposits at call.

Reconciliation of profit to operating cash flow

	2023 $m	2022 $m
(Loss)/profit for the year attributable to stapled unitholders (104) 712 Revaluation of investment properties 396 (348) Share of net loss/(profit) of JVAs net of distributions received 104 (5) Loss/(gain) on sale of assets 22 (1) Net loss/(gain) on financial instruments 2 (4) Amortisation expenses 100 119 Impairment loss on receivables recognised - 31 Lease incentives and straight-lining of lease revenue (60) (79) Change in operatingassets and liabilities 41 2
Net cash inflows from operating activities 501 427

Net Debt Reconciliation

	Current lease liabilities	Non-current lease liabilities	Non- current borrowings	Total liabilities	Cash and cash equivalents	Total
	$m	$m	$m	$m	$m	$m
Balance 1 July 2021 - (7) (1,884) (1,891) 31 (1,860) Net cash flow movements - - (7) (7) 3 (4)
Balance 30 June 2022 - (7) (1,891) (1,898) 34 (1,864)
Net cash flow movements - - (378) (378) (2) (380)
Balance 30 June 2023 - (7) (2,269) (2,276) 32 (2,244)

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

E4 FINANCIAL RISK MANAGEMENT

The consolidated entity’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The consolidated entity seeks to minimise the potential impact of these financial risks on financial performance, for example, by using derivative financial instruments to protect against interest rate and foreign exchange risk.

Financial risk management is carried out by a central treasury department (Mirvac Group Treasury) under policies approved by the Board. The Board provides overall risk management principles and policies covering specific areas. Mirvac Group Treasury identifies, evaluates, reports and manages financial risks in close cooperation with the consolidated entity in accordance with Board policy.

A summary of the Group’s key risks identified, exposures and management of exposures is detailed in the table below:

Risk	Definition	Exposures arising from	Management of exposures
Market risk - interest rate The risk that the fair value or cash flows of financial instruments will fluctuate due to changes in market interest rates Borrowings issued at fixed rates and variable rates Derivatives  Interest rate derivatives manage cash flow interest rate risk by converting floating rate borrowings to fixed or capped rates with a target of 55 per cent.  Mirvac does not manage the fair value risk for debt instruments from interest rates, as it does not have an impact on the cash flows paid by the business. Market risk - foreign exchange The risk that the fair value of a financial commitment, asset or liability will fluctuate due to changes in foreign exchange rates Bonds denominated in other currencies Receipts and payments that are denominated in other currencies  Cross currency interest rate swaps to convert non- Australian dollar borrowings to Australian dollar exposures. These cross currency interest rate swaps have been designated as cash flow hedges with the movements in fair value recognised while they are still in an effective hedge relationship. Market risk – price The risk that the fair value of other financial assets at fair value through profit and loss will fluctuate due to changes in the underlying share/unit price Other financial assets at fair value through profit or loss, with any resultant gain or loss recognised in toher comprehensive income  The Group is exposed to minimal price risk and so does not manage the exposures. Credit risk The risk that a counterparty will not make payments to Mirvac as they fall due  Cash and cash equivalents  Receivables  Derivative financial assets  Other financial assets  Setting credit limits and obtaining collateral as security (where appropriate).  Diversified trading spread across large financial institutions with investment grade credit ratings.  Regularly monitoring the exposure to each counterparty and their credit ratings.  Refer to note D1 for details on credit risk exposure on receivables. The Group deems the exposure to credit risk as not significant for all other classes of financial assets and liabilities. Liquidity risk The risk that Mirvac will not be able to meet its obligations as they fall due  Payables  Borrowings  Derivative financial liabilities  Regular forecasts of the Group’s liquidity requirements. Surplus funds are only invested in highly liquid instruments.  Availability of cash, marketable securities and committed credit facilities.  Ability to raise funds through issue of new securities through placements or Distribution Reinvestment Plan.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

E4 FINANCIAL RISK MANAGEMENT (continued)

Sensitivity analysis

This sensitivity analysis shows the impact on profit after tax and equity if Australian interest rates changed by 50 basis points.

Given the consolidated entity is operating in an interest rate environment which is in a tightening cycle, a 50 bps movement is deemed an appropriate sensitivity to consider for 30 June 2023.

Total impact on profit after tax and equity	2023	2023	2022	2022
	50 bps	50 bps	100 bps	100 bps
	$m	$m	$m	$m
Changes in: Australian interestrates	$11 mdecrease $11 m increase $19mdecrease $19m increase

Based on current exposures, there is no material foreign exchange sensitivity in the consolidated entity.

Liquidity risk

Maturity of financial liabilities

The consolidated entity’s maturity of financial liabilities is provided in the following table. The amounts disclosed in the table are the contractual undiscounted cash flows:

	2023	2023	2022	2022
	Maturing in:		Maturing in:
	Less than 1 year 1 to 2 years 2 to 5 years Over 5 years	Total	Less than 1 year 1 to 2 years 2 to 5 years Over 5 years	Total
	$m $m $m $m	$m	$m $m $m $m	$m
Payables Borrowings Lease liabilities	278 - - - 278 220 - - - 220 128 125 346 2,448 3,047 137 1,963 - - 2,100 - - - 7 7 - - - 7 7
	406 125 346 2,455 3,332 357 1,963 - 7 2,327

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

E5 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

The consolidated entity measures various financial assets and liabilities at fair value ,which in some cases, may be subjective and depend on the inputs used in the calculations. The different levels of measurement are described below:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: not traded in an active market but calculated with significant inputs coming from observable market data; and
Level 3: significant inputs to the calculation that are not based on observable market data (unobservable inputs).

The consolidated entity holds no Level 1 or Level 2 financial instruments.

The methods and assumptions used to estimate the fair value of financial instruments are as follows:

Other financial assets

Other financial assets include units in unlisted funds. The carrying value of other financial assets is equal to the fair value; refer to note D2 for further details.

Investments in unlisted entities are traded in inactive markets and the fair value is determined by the unit or share price as advised by the trustee of the unlisted entity, based on the value of the underlying assets. The unlisted entity’s assets are subject to regular external valuations using the valuation methods explained in note C1.

The following table summarises the financial instruments measured and recognised at fair value on a recurring a basis:

Note	2023	2023	2023		2022	2022	2022	2022
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets carried at fair value Units in unlisted funds D2	- - 59			59 - - 62 62
	- - 59			59 - - 62 62

The following table presents a reconciliation of the carrying value of Level 3 instruments (excluding investment properties which are shown in note C1):

	2023	2022
	Units in unlisted funds $m	Units in unlisted funds $m
Balance 1 July Net revaluation (loss)/gain on financial instruments Return of capital	62 75 (2) 4 (1) (17)
Balance 30 June	59 62

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

F EQUITY

This section includes distributions, unitholders’ equity and reserves. It represents how the consolidated entity raised equity from unitholders in order to finance activities both now and in the future. …

……………………

F1 DISTRIBUTIONS

Half-yearly ordinary distributions paid/payable per stapled security were as follows:

	Distribution	Date	Total amount
	cents	paid/payable	$m
Distributions for the year ended 30 June 2023
31 December 2022	5.20	28 Feb 2023	205
30 June 2023	5.30	31 Aug 2023	209
Total distribution	10.50		414
Distributions for the year ended 30 June 2022
31 December 2021	5.10	28 Feb 2022	201
30 June2022	5.10	31 Aug2022	201
Total distribution	10.20		402

F2 CONTRIBUTED EQUITY

Ordinary units are classified as equity. Each ordinary unit entitles the holder to receive distributions when declared, and one vote per unit at securityholders’ meetings on polls and proceeds on wind up of the Trust, in proportion to the number of units held.

When new units or options are issued, the directly attributable incremental costs are deducted from equity.

Movements in paid up equity

	2023	2023	2022	2022
	No. units	Units $m	No. units	Units $m
Balance 1 July Stapled units issued under EEP Long-term performance plan, LTI and EIS stapled units converted, sold, vested or forfeited Legacy schemes vested Balance 30 June	3,941,722,042 5,388 3,936,111,448 5,374 - - 401,059 1 2,790,895 6 5,111,753 13 84,869 - 97,782 - 3,944,597,806 5,394 3,941,722,042 5,388

The number of stapled units issued as listed on the ASX at 30 June 2023 was 3,946 million (2022: 3,943 million), which includes 1 million of stapled units issued under the LTI and EIS (2022: 1 million). Units issued to employees under the Mirvac LTI and EIS are accounted for as options and are recognised by the Group in the security-based payments reserve, not in contributed equity.

F3 RESERVES

Non-controlling interests (NCI) reserve

The NCI reserve was used to record the discount received on acquiring the NCI in Mirvac Real Estate Investment Trust, a controlled entity of the consolidated entity, in December 2009.

	Capital reserve $m	NCI reserve $m	Total reserves $m
Balance 30 June2022 (1) 6 5
Balance 30 June 2023 (1) 6 5

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

G CONSOLIDATED ENTITY STRUCTURE

This section provides information on how the consolidated entity’s structure affects its financial position and performance.

G1 CONTROLLED ENTITIES

Controlled entities

The consolidated financial statements of the consolidated entity incorporate the assets, liabilities and results of all controlled entities. Controlled entities are all entities over which the consolidated entity has power to direct the activities of the entity and an exposure to and ability to influence its variable returns from its involvement with the entity.

Controlled entities are fully consolidated from the date control is obtained until the date that control ceases. Inter-entity transactions and balances are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the assets transferred.

Structured entities

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity. The consolidated entity considers that all funds and trusts in which it currently has an investment, or from which it currently earns income, to be structured entities. Depending on the consolidated entity’s power to direct the activities of the entity and its exposure to and ability to influence its own returns, it may consolidate the entity. In other cases, it may sponsor or have some form of exposure to a structured entity, but not consolidate it.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

G1 CONTROLLED ENTITIES (continued)

Structured entities (continued)

If the consolidated entity does not control a structured entity but has joint control over the activities and joint rights to the net assets, it is treated as a joint venture. Refer to note C2.

Funds and trusts

The consolidated entity invests in a number of funds and trusts which invest in real estate as investment properties. The investees finance their operations through borrowings and through equity issues. The consolidated entity determines whether it controls or has significant influence over these funds and trusts as discussed above.

The following entities were wholly owned and established in Australia and controlled by MPT as at the current year end:

10-20 Bond Street Trust	Mirvac Broadway Sub-Trust	Mirvac Property Trust No.7
367 Collins Street Trust	Mirvac Capital Partners 1 Trust	Mirvac Real Estate Investment Trust
367 Collins Street No. 2 Trust	Mirvac Collins Street No.1 Sub-Trust	Mirvac Retail Head Trust
380 St Kilda Road Trust1	Mirvac Commercial No.3 Sub Trust	Mirvac Retail Sub-Trust No. 1
477 Collins Street No. 1 Trust	Mirvac Commercial Trust1	Mirvac Retail Sub-Trust No. 2
Australian Office Partnership Trust	Mirvac Group Funding No.2 Pty Limited	Mirvac Retail Sub-Trust No. 3
Eveleigh Trust	Mirvac Group Funding No.3 Pty Limited	Mirvac Retail Sub-Trust No. 4
James Fielding Trust	Mirvac Hoxton Park Trust	Mirvac Rhodes Sub-Trust
Joynton North Property Trust	Mirvac Industrial No. 1 Sub-Trust	Mirvac Rydalmere Trust No. 1
Joynton Properties Trust	Mirvac Kensington Trust	Mirvac Rydalmere Trust No. 2
Meridian Investment Trust No. 1	Mirvac Kirrawee Trust No.1	Mirvac Smail Street Trust
Meridian Investment Trust No. 2	Mirvac Kirrawee Trust No.2	Mirvac Toombul Trust No. 1
Meridian Investment Trust No. 3	Mirvac La Trobe Office Trust	Mirvac Toombul Trust No. 2
Meridian Investment Trust No. 4	Mirvac Living Trust	Old Treasury Holding Trust
Meridian Investment Trust No. 5	Mirvac Padstow Trust No.1	Springfield Regional Shopping Centre Trust
Meridian Investment Trust No. 6	Mirvac Parramatta Sub-Trust No. 1	Mirvac Spencer Trust
Mirvac 90 Collins Street Trust	Mirvac Pitt Street Trust	Walker Sub Trust
Mirvac Allendale Square Trust	Mirvac Property Trust No.3
Mirvac Ann Street Trust	Mirvac Property Trust No.4
Mirvac Bay St Trust	Mirvac Property Trust No.5
Mirvac Bourke Street No.1 Sub-Trust	Mirvac Property Trust No.6

One unit on issue held by Mirvac Limited as custodian for MPT.

G2 PARENT ENTITY

The financial information for the parent entity, MPT, has been prepared on the same basis as the consolidated financial statements.

Parent entity	2023 $m	2022 $m
Current assets 76 139 Total assets 11,152 10,760 Current liabilities 1,173 1,046 Total liabilities 3,268 2,766
Equity Contributed equity 5,394 5,388 Reserves 8 8 Retained earnings 2,482 2,598
Total equity 7,884 7,994
Profit for theyear 298 927
Total comprehensive income for theyear 298 927

As outlined in note E2, MPT is a borrower under a loan facility from a related party of the Group. This related party mainly sources MPT’s funding needs from external debt facilities. MPT is party to a guarantee deed poll to guarantee the external debt of the related party.

At 30 June 2023, the parent entity did not provide any other guarantees in relation to the debts of its subsidiaries (2022: nil) or have any contingent liabilities (2022: nil). The parent entity had $3 million of capital commitments approved but not yet provided (2022: $12 million).

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

H OTHER DISCLOSURES

This section provides additional required disclosures that are not covered in the previous sections.

H1 CONTINGENT LIABILITIES

A contingent liability is a possible obligation that may become payable depending on a future event or a present obligation that has a low probability of requiring payment/cannot be reliably measured. A provision is not recognised for contingent liabilities.

The consolidated entity had contingent liabilities at 30 June 2023 in respect of the following:

		2023 $000	2022 $000
	Health and safetyclaims 85 119

The consolidated entity has no contingent liabilities relating to JVAs (2022: nil).

H2 EARNINGS PER STAPLED UNIT

Basic earnings per stapled unit (EPU) is calculated by dividing:

the profit attributable to stapled unitholders; by
the weighted average number of ordinary units (WANOU) outstanding during the year.

Diluted EPU adjusts the WANOU to take into account the dilutive potential of ordinary securities from security-based payments.

	2023	2022
Earnings per stapled unit
Basic EPU (cents)	(2.6)	18.1
Diluted EPU (cents)	(2.6)	18.1
Profit for the year attributable to stapled unitholders ($m) used to calculate basic and diluted EPU	(104)	712
WANOU used in calculating basic EPU (m)	3,945	3,941
WANOU used in calculatingdiluted EPU(m)	3,946	3,942

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

H3 KEY MANAGEMENT PERSONNEL

Key management personnel compensation

Key management personnel (KMP) are employed by an entity controlled by Mirvac Limited. Payments made from the consolidated entity to Mirvac Limited and its controlled entities do not include any amounts directly attributable to the compensation of KMP. The total payments made to Mirvac Limited and its controlled entities are shown in note H4.

Equity instrument disclosures relating to KMP

Securityholdings

As at 30 June 2023, the number of ordinary securities in Mirvac held during the year by each Executive KMP, including their personally related parties, is set out below:

	Balance 1 July 2022	Changes	Balance 30 June 2023	Value 30 June 2023 $	Minimum securityholding guideline $	Date securityholding to be attained
Executive KMP Campbell Hanan 490,344 80,000 570,344 1,288,977 2,250,000 March 2028 Courtenay Smith 45,218 55,087 100,305 226,689 950,000 January 2028 Scott Mosely - - - - 780,000 November 2027 Stuart Penklis 342,275 85,411 427,686 966,570 1,100,000 January 2028 Richard Seddon1 - 36,985 36,985 83,586 650,000 March 2028

Richard Seddon commenced his role and therefore became an Executive KMP on 1 March 2023. Opening balance has been adjusted to reflect securities already held.

Options

No options (i.e. a right to acquire a security upon payment of an exercise price) were granted as remuneration during the year ended 30 June 2023 and no unvested or unexercised options are held by Executive KMP as at 30 June 2023.

Performance rights held during the year

The number of performance rights in Mirvac held during the year by each Executive KMP, including their personally-related parties, is set out below:

		Long-term Performance Plan (LTP)	Long-term Performance Plan (LTP)	Deferred Short-term Incentives (STI)	Deferred Short-term Incentives (STI)
	Balance 1 July 2022	Rights issued	Rights vested/forfeited relating to performance period ended 30 June 2023	Rights issued	Rights vested/ forfeited	Balance 30 June 2023
Executive KMP Campbell Hanan 496,140 953,064 (214,787) 119,202 (50,192) 1,303,427 Courtenay Smith 307,787 229,885 (90,436) 84,319 (55,087) 476,468 Scott Mosely - 224,137 - - - 224,137 Stuart Penklis 417,802 294,540 (180,873) 100,380 (42,267) 589,582 Richard Seddon1 115,341 87,931 (61,044) - - 142,228

Richard Seddon commenced his role and therefore became an Executive KMP on 1 March 2023. Opening balance has been adjusted to reflect performance rights already held.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

H3 KEY MANAGEMENT PERSONNEL (continued)

Equity instrument disclosures relating to KMP (continued)

Details of the movement in the number and value of performance rights held by Executive KMP during the year are set out below:

						Vested	Vested	Vested	Lapsed	Lapsed	Lapsed
Executive KMP	Plan	Grant date	Number of rights granted	Value at grant date1	Vesting date	Number of rights	% of total grant	Value of rights	Number of rights	% of total grant	Value of rights
Campbell Hanan LTP 3 Dec 20 214,787 348,170 30 Jun 23 137,463 64% 222,829 77,324 36% 125,341 STI 31 Aug 21 50,192 151,693 31 Aug 22 50,192 100% 151,693 - 0% - STI 31 Aug 21 50,192 146,941 31 Aug 23 - - - - - - LTP 30 Nov 21 180,969 311,451 30 Jun 24 - - - - - - STI 31 Aug 22 59,601 119,492 31 Aug 23 - - - - - - STI 31 Aug 22 59,601 114,079 31 Aug 24 - - - - - - LTP 2 Dec22 953,064 1,337,953 30 Jun 25 - - - - - -
Total 1,568,406 2,529,779 187,655 374,522 77,324 125,341
Courtenay Smith STI 26 Mar 21 45,218 103,233 8 Mar 23 45,218 100% 103,233 - 0% - LTP 26 Mar 21 90,436 127,515 30 Jun 23 57,879 64% 81,610 32,557 36% 45,905 STI 31 Aug 21 9,869 29,827 31 Aug 22 9,869 100% 29,827 - 0% - STI 31 Aug 21 9,869 28,892 31 Aug 23 - - - - - LTP 30 Nov 21 152,395 262,274 30 Jun 24 - - - - - - STI 31 Aug 22 42,160 84,525 31 Aug 23 - - - - - - STI 31 Aug 22 42,159 80,694 31 Aug 24 - - - - - - LTP 2 Dec 22 229,885 322,723 30 Jun 25 - - - - - -
Total 621,991 1,039,683 112,966 214,670 32,557 45,905
Scott Mosely LTP 2 Dec 22 224,137 314,653 30 Jun 25 - - - - - -
Total 224,137 314,653
Stuart Penklis LTP 3 Dec 20 180,873 293,195 30 Jun 23 115,768 64% 187,645 65,115 36% 105,550 STI 31 Aug 21 42,267 127,742 31 Aug 22 42,267 100% 127,742 - 0% - STI 31 Aug 21 42,267 123,740 31 Aug 23 - - - - - - LTP 30 Nov 21 152,395 262,274 30 Jun 24 - - - - - - STI 31 Aug 22 50,190 100,624 31 Aug 23 - - - - - - STI 31 Aug 22 50,190 96,066 31 Aug 24 - - - - - - LTP 2 Dec 22 294,540 413,488 30 Jun 25 - - - - - -
Total 812,722 1,417,129 158,035 315,387 65,115 105,550
Richard Seddon LTP 3 Dec 20 61,044 117,840 30 Jun 23 47,858 78% 96,467 13,186 22% 21,373 LTP 30 Nov 21 54,297 120,633 30 Jun 24 - - - - - - LTP 3 Dec 22 87,931 148,726 30 Jun 25 - - - - - -
Total 203,272 387,199 47,858 96,467 13,186 21,373
1. The calculation of the value of performance rights used the fair value as determined at the time of grant. For the LTP grants subject to Return On Invested Capital (ROIC) performance, the initial accounting treatment assumes 75 per cent vesting, which is reflected in the above valuation.

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

==> picture [78 x 44] intentionally omitted <==

H4 RELATED PARTIES

The Responsible Entity

The Responsible Entity of the Trust is Mirvac Funds Limited, an entity incorporated in New South Wales and ultimately controlled by Mirvac Limited.

As outlined in the Explanatory Memorandum dated 4 May 1999, Mirvac Funds Limited charges MPT Responsible Entity fees on a cost recovery basis. Fees charged by Mirvac Funds Limited for the year ended 30 June 2023 were $29 million (2022: $28 million).

Transactions with related parties

	Note	2023 $000	2022 $000
Property rental revenue from entities related to Responsible Entity 6,871 8,197 Fees paid to Responsible Entity (28,697) (28,484) Interest paid to entities related to Responsible Entity (97,171) (66,802) Property management fee expense paid to entities related to Responsible Entity (16,537) (18,046) Capital expenditure paid to entities related to Responsible Entity (39,635) (113,417) Sale/(Purchase) of investment property from/to related party (69,307) 169,833 Amounts due to entities related to Responsible Entity D4 115,440 75,545 Loans from entities related to Responsible Entity E2 2,269,000 1,891,000

Capital expenditure paid to related parties is on a cost recovery basis, all other transactions with related parties were made on commercial terms and conditions.

Transactions between Mirvac and its JVAs were made on commercial terms and conditions. Distributions received from JVAs were on the same terms and conditions that applied to other unitholders.

H5 AUDITOR’S REMUNERATION

	2023	2022
	$000	$000
Audit services Audit and review of financial reports Other assurance services	798 230	712 233
Total auditor’s remuneration	1,028	945

Mirvac Property Trust and its controlled entities Directors’ declaration For the year ended 30 June 2023

==> picture [74 x 42] intentionally omitted <==

In the Directors’ opinion:

(a) the financial statements and notes set out on pages 8 to 39 are in accordance with the Corporations Act 2001 , including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the consolidated entity's financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become due and payable.

The basis of preparation note confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Officer/Managing Director and the Chief Financial Officer required by section 295A of the Corporations Act 2001 .

This declaration is made in accordance with a resolution of the Directors.

==> picture [131 x 62] intentionally omitted <==

Campbell Hanan Director

Sydney 16 August 2023

==> picture [77 x 59] intentionally omitted <==

Independent auditor’s report

To the stapled securityholders of Mirvac Property Trust

Report on the audit of the financial report

Our opinion

In our opinion:

The accompanying financial report of Mirvac Property Trust (the Registered Scheme, MPT or Trust) and its controlled entities (together the consolidated entity) is in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the consolidated entity's financial position as at 30 June 2023 and of its financial performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

What we have audited

The consolidated entity financial report comprises:

the consolidated statement of financial position as at 30 June 2023
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information
the Directors’ declaration.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the consolidated entity in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999

Liability limited by a scheme approved under Professional Standards Legislation.

==> picture [77 x 59] intentionally omitted <==

Our audit approach

An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the consolidated entity, its accounting processes and controls and the industry in which it operates.

==> picture [211 x 117] intentionally omitted <==

Materiality

For the purpose of our audit we used overall consolidated entity materiality of $23.73 million, which represents approximately 5% of the profit before tax of the consolidated entity adjusted for certain items as outlined below.

We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole.

We chose profit before tax (as adjusted) of the consolidated entity because, in our view, it is the benchmark against which the performance of the consolidated entity is most commonly measured.

Audit scope

Our audit focused on where the consolidated entity made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events.

The consolidated entity invests in property assets across Sydney, Melbourne, Brisbane, Perth and Canberra. The accounting processes are structured around a consolidated entity finance function at its head office in Sydney.

Key audit matters

Amongst other relevant topics, we communicated the following key audit matters to the Audit, Risk and Compliance Committee:

 Fair value of investment properties

These are further described in the Key audit matters section of our report.

Profit before tax is adjusted for fair value movements in investment property, unlisted equity investments and other significant non-cash items.

We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds.

==> picture [77 x 59] intentionally omitted <==

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context.

Key audit matter

Fair value of investment properties

(Refer to note C1) $8,929m Investment properties are recognised at fair value.

The consolidated entity’s estimate of fair value of investment properties includes assumptions about unobservable inputs including future market and economic conditions which are inherently subject to the risk of change.

At each reporting period, the Directors determine the fair value of the consolidated entity’s investment property portfolio having regard to the consolidated entity’s valuation policy which requires all properties to be externally valued by valuation experts at least once every two years. In the period between external valuations the Directors’ valuation is supported by internal valuation models.

Fair value of investment properties was a key audit matter because:

Investment property balances are financially significant in the Consolidated Statement of Financial Position.
The impact of changes in the fair value of investment properties can have a significant effect on the consolidated entity’s total comprehensive income.
Investment property valuations are inherently subjective due to the use of unobservable inputs in the valuation methodology.
Fair values are highly sensitive to changes in key assumptions.

How our audit addressed the key audit matter

We evaluated the design of the consolidated entity’s relevant controls over the investment property valuations and assessed whether a sample of these controls operated effectively throughout the year including:

The consolidated entity’s compliance with its policy to externally value all properties at least once in the last two years and to rotate valuation firms.
The approval of the adopted fair values for all individual properties by the Directors.

We evaluated the appropriateness of the valuation methodologies used against the requirements of Australian Accounting Standards.

We agreed the fair values of all properties to the external valuation or internal valuation model (together, the ‘valuations’) and assessed the competency, capability and objectivity of the relevant external or internal valuer.

We read recent independent property market reports to develop our understanding of the prevailing market conditions in which the consolidated entity invests.

We engaged PwC valuation experts as part of developing an understanding of the prevailing market conditions and their expected impact on the consolidated entity’s investment properties.

We met with management to discuss the specifics of the property portfolio including, amongst other things, any significant leasing activity, capital expenditure or vacancies impacting the portfolio.

We evaluated the completeness and accuracy of tenancy schedules used in the valuations on a sample basis to evaluate whether the relevant leasing information had been correctly input.

We performed a risk assessment over the consolidated entity’s investment property portfolio to determine those properties at greater risk of fair value being materially misstated. Our risk assessment was informed by our understanding of each property, consideration of the

==> picture [77 x 59] intentionally omitted <==

Key audit matter

How our audit addressed the key audit matter

results of the consolidated entity’s estimate of fair value and our understanding of current market conditions. For those properties which were assessed as being at greater risk, we performed procedures to assess the appropriateness of key assumptions used in the consolidated entity’s assessment of fair value including the performance of the following procedures over the valuations:
Obtained the valuation and held discussions with management to develop an understanding of the basis for assumptions used.
Assessed the appropriateness of the methodology adopted and the mathematical accuracy of the valuations.
Assessed the appropriateness of the significant assumptions in the valuation including capitalisation rate, discount rate market rents used in the valuation by comparing them against market data for comparable properties.
Assessed the appropriateness of rental income data used in the valuation against rental income recorded in the general ledger in FY23 for each property.

We also assessed the reasonableness of the consolidated entity’s disclosures against the requirements of Australian Accounting Standards.

Other information

The Directors of Mirvac Funds Limited, the Responsible Entity of Mirvac Property Trust (the Directors) are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

==> picture [77 x 59] intentionally omitted <==

Responsibilities of the Directors for the financial report

The Directors are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determines is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Directors are responsible for assessing the ability of the consolidated entity to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intends to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor's report.

Responsibilities

The Directors are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

==> picture [97 x 29] intentionally omitted <==

PricewaterhouseCoopers

==> picture [72 x 47] intentionally omitted <==

Voula Papageorgiou Partner

==> picture [106 x 42] intentionally omitted <==

Joe Sheeran Partner

Sydney 16 August 2023

==> picture [88 x 49] intentionally omitted <==

AI assistant

MIRVAC GROUP — Annual Report 2023

65328_rns_2023-08-15_3e18c7ff-f22b-4a85-beea-2d15141db842.pdf

Mirvac Property Trust ANNUAL REPORT 2023

MIRVAC PROPERTY TRUST AND ITS CONTROLLED ENTITIES

Annual Report For the year ended 30 June 2023

DIRECTORS’ REPORT

Responsible Entity

Directors

Principal activities

REVIEW OF OPERATIONS AND ACTIVITIES

FINANCIAL, CAPITAL MANAGEMENT AND OPERATIONAL HIGHLIGHTS

Key financial highlights for the year ended 30 June 2023:

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

FINANCIAL, CAPITAL MANAGEMENT AND OPERATIONAL HIGHLIGHTS (continued)

Key capital management highlights for the year ended 30 June 2023:

Key operational highlights for the year ended 30 June 2023:

Outlookand risks[1]

Office:

Industrial:

Retail:

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

Significant changes in the state of affairs

Interests in the Trust

Instruments held by Directors

Fees paid to the Responsible Entity or its associates

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

Matters subsequent to the end of the year

Environmental regulations

Non-audit services

Insurance of officers

REVIEW OF OPERATIONS AND ACTIVITIES (continued)

Auditor’s independence declaration

Rounding of amounts

Auditor’s Independence Declaration

CONTENTS

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Mirvac Funds Limited

Mirvac Property Trust and its controlled entities Consolidated statement of comprehensive income For the year ended 30 June 2023

Mirvac Property Trust and its controlled entities Consolidated statement of financial position As at 30 June 2023

Mirvac Property Trust and its controlled entities Consolidated statement of changes in equity For the year ended 30 June 2023

Mirvac Property Trust and its controlled entities Consolidated statement of cash flows For the year ended 30 June 2023

A BASIS OF PREPARATION

Mirvac Group – stapled securities

Statement of compliance

Basis of preparation

Basis of preparation (continued)

Critical accounting estimates and judgements

Comparative information

New and amended standards adopted by the Trust

B RESULTS FOR THE YEAR

B1 SEGMENT INFORMATION

B2 REVENUE

Property rental revenue

Lease revenue

Services revenue

B3 EXPENSES

Investment property expenses

B4 EVENTS OCCURRING AFTER THE END OF THE YEAR

B5 INCOME TAX

C INVESTMENT ASSETS

…………………………………………………………………………………………………

C1 INVESTMENT PROPERTIES

Investment properties

Judgement in fair value estimation

C1 INVESTMENT PROPERTIES (continued)

Lease incentives

Ground leases

Derecognition of investment properties

Commitments

C1 INVESTMENT PROPERTIES (continued)

Movements in investment properties

Fair value measurement and valuation basis

C1 INVESTMENT PROPERTIES (continued)

Sensitivity analysis

C1 INVESTMENT PROPERTIES (continued)

Future committed operating lease receipts

C2 INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

Mirvac Property Trust and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2023

MIRVAC GROUP Annual Report 2023