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MIRVAC GROUP — Investor Presentation 2024
May 5, 2024
65328_rns_2024-05-05_4fe36e1e-be8c-4172-8368-04d15d266d0f.pdf
Investor Presentation
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7 MAY 2024
Macquarie Australia Conference
Campbell Hanan Group CEO & Managing Director
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55 Pitt Street, Sydney (artist impression, final design may differ)
Macquarie Australia Conference
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Acknowledgement of Country
Mirvac acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Owners and Custodians of the lands and waters of Australia, and we ofer our respect to their Elders past and present.
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Driving value for our securityholders
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Executing on our strategic objectives
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Retain balance sheet Increase cash flow resilience Leverage integrated Expand funds Continued focus on
flexibility of Investment portfolio development capability management offering sustainability and culture
~$1.1BNNON-CORE COMPLETED PROGRESSING SELL-DOWNS INDUSTRIAL ~$1BN
ASSETS SALES [1] SERENITAS AT 55 PITT ST VENTURE
ACQUISITION & ASPECT SOUTH WITH ART [3,4]
97% 1,539
RESIDENTIAL
PORTFOLIO
SETTLEMENTS
OCCUPANCY [2]
FYTD
~123,000sqm
LEASING FYTD
6 STAR
GREEN STAR #2
BUILDINGS RATING [6] BEST WORKPLACES
AT HERITAGE TO GIVE BACK (GOOD
LANES, COMPANY)
BRISBANE
367 Collins Street, MEL Tuart Lakes Lifestyle Resort, WA 55 Pitt Street, SYD [5] Aspect, SYD National Community Day
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- Includes ~$470m sold/settled FYTD, ~$550m assets under HoA and ~$80m in advanced discussions. 2. By area, excluding BTR and Land Lease. 3. Represents 100% expected end value / revenue (including GST), subject to various factors outside Mirvac’s control, such as planning outcomes, market conditions, construction cost escalation, supply chain risks, weather and other uncertainties. 4. Total vehicle size subject to execution of non-binding HoA for Aspect South, event occurred post 31 March 2024. 5. Artist impression, final design may differ. 6. Green Building Council of Australia (GBCA) rating.
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LEADERS IN LIVING
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Leveraging our market leadership across a wide spectrum of living sectors
Deep capability and track record to take advantage of chronic under supply across the wider housing market
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Flexibility to adapt and capture the full value chain of living
MID & HIGH RISE LAND LEASE
LAND SUBDIVISION HOMES TERRACES BUILD TO RENT MIXED USE
APARTMENTS COMMUNITIES
NEW
OFFERING
GUMNUT PARK, OLIVINE, TULLAMORE, GREEN SQUARE, WATERFRONT QUAY, LIV MUNRO, HARBOURSIDE,
SERENITAS
MELBOURNE MELBOURNE SYDNEY [1] BRISBANE [1] MELBOURNE SYDNEY [1]
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LEADERS IN LIVING
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Long-term structural tailwinds to persist
Strong population growth forecast
Australia – net visa arrivals vs net overseas migration rolling annual
Tight vacancy | renting for longer | apartment relative affordability
Residential vacancy remains low and supportive rent growth
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600,000 People
400,000
200,000
0
(200,000)
'14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24
March
Permanent Permanent Permanent Temporary Temporary
family visa skilled visa other visa skilled visa student visa
Temporary work Net overseas migration
Source: ABS, March 2024.
Ageing demographic
Population aged 55+
Intergenerational review projections
53%
15,000,000 people
43
10,000,000
33
5,000,000 23
1,000,000 13
'73 '83 '93 '03 '13 '23 '33 '43 '53 '63
June
Number (LHS) % of total (RHS)
Source: ABS Historical Population, Estimated Resident Population, Federal Treasury 2023 Intergenerational Report.
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6%
4 2.9%
1.3% Total Australian
2 1.2% 15+ population
growth [1]
1.1%
1.0%
0
'14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24
March
Sydney Melbourne Brisbane Australia 1.1%
Source: All dwellings, seasonally adjusted, SQM Research, March 2024, Macrobond. Residential
vacancy [2]
Restricted supply with constraints
Restricted apartment supply outlook
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Restricted apartment supply outlook
Sydney, Melbourne Brisbane Apartment Completions vs. Population additions
60,000 apartments >17%
400,000 people Market rent growth [3]
40,000
200,000
20,000 0 ~40%
0 (200,000) Discount between apartment and
'18 '19 '20 '21 '22 '23 '24 '25 '26 established
June house price [4]
High Density Dwelling Under Construction Marketed (LHS) Population
Completions (LHS) (LHS) Additions (RHS)
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Source: Charter Keck Cramer, Sydney, Melbourne, Brisbane (Dec 2023 Forecast), ABS, Centre for Population Statement 2023 (Dec 2023).
- Source: ABS, annual change to February 2024. 2. All dwellings, seasonally adjusted, Source: SQM Research March 2024, Macrobond. 3. Source: Domain Group/APM Research February 2024, Greater Sydney, Melbourne, Brisbane, 3-month unit median 4. Source: Domain/APM Research, Greater Sydney, 3 month median to February 2024.
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LEADERS IN LIVING
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Residential pipeline ready for improving conditions
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Enquiries strengthened, with modest stable sales activity
1,200 Unconditional exchanges Leads 16,000
12,000
800
8,000
400
4,000
0 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2019 2020 2021 2022 2023 2024
Apartments (LHS) MPC (LHS) Leads (RHS)
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Settlements expected to commence from FY25
100% 93%
PRE-SOLD PRE-SOLD
93%
PRE-SOLD
Waterfront Quay, QLD Waterfront Isle, QLD Charlton House, QLD
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Deep pipeline of DA-ready projects to take advantage of under supply
~8,400 lots
secured 42% 42%
PRE-SOLD
FYTD [1] PRE-SOLD
1HFY25 initial release of
91 premium apartments
$2.2bn project end value [2]
Mulgoa, NSW Trielle Yarra’s Edge, VIC Harbourside, NSW
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Note: All images are artist impressions, final design may differ.
- Includes Monarch Glen, QLD and Mulgoa, NSW. Subject to conditions precedent.
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- Represents 100% expected total project end value/revenue (including GST), subject to various factors outside Mirvac’s control such as planning outcomes, market conditions, construction cost escalation, supply chain risks, weather and other uncertainties.
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LEADERS IN LIVING
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Living sector investment portfolio delivering strong operating metrics
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BUILD TO RENT LAND LEASE
Strong momentum in Land Lease settlements
805 OPERATIONAL APARTMENTS
Rolling 12 months settlements (including DSA projects) 27
Communities
400 settlements 386
~4,400
Occupied sites
200
LIV Indigo, Sydney LIV Munro, Melbourne ~$480,000
Average sale price [2]
~96% +8.2%
Occupancy [1] Net re-leasing spreads FYTD
100%
0 Occupancy [3]
March 22 March 23 March 24
~1,368 APARTMENTS IN DEVELOPMENT
Proposed clubhouse at Thyme Lifestyle Resort, Evans Head, NSW [5]
Sites in
~1,800 development [4]
LIV Aston, Melbourne LIV Anura, Brisbane [5] LIV Albert Fields, Melbourne [5]
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- By apartment number, excluding display apartments, as at 31 March 2024. 2. 12 month average price to March 2024. Excludes GST and DSA projects. 3. By number of sites, as at 31 March 2024. 4. As at 31 March 2024. Includes 2 projects currently under external development service agreements (DSA Projects). 5. Artist impression, final design may differ.
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UNIQUE CREATION ADVANTAGE
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Our competitive advantage
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Integrated asset creation and curation capability is our key competitive advantage: > Unique in-house asset creation capability across multiple asset classes delivering:
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New, quality sustainable product to Investment portfolio and capital partners
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Development earnings and NTA uplift over time
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Strong, aligned asset curation capability and focus on asset quality:
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Delivers consistent superior, long-term investment portfolio returns
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Attracts capital, providing highly aligned and recurring funds management income streams and balance sheet support
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MIRVAC CONSTRUCTION
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5 GOLD STAR
ICIRT RATING RETAINED
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Award-winning Australian urban asset creator, owner and manager
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Development EBIT
NTA Uplift
Delivers new
sustainable assets
New recurring
high quality
rental income
New recurring
asset & funds
management fees
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Harbourside, Sydney (artist impression, final design may differ)
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UNIQUE CREATION ADVANTAGE
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Delivering the next wave of projects into our Investment portfolio
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Lifting premium office exposure Modern Sydney based industrial Creating Living sector income streams
~$1.2bn
Build to Rent DEVELOPMENTS
UNDERWAY [4]
~$2bn ~77%
DEVELOPMENT [2] PRE-LEASED [3]
LIV Aston, Melbourne [1] LIV Anura, Brisbane [1] LIV Albert Fields, Melbourne [1]
Land Lease
386
SETTLEMENTS [5]
Recently completed clubhouse at Thyme Lifestyle Resort, Hervey Bay
55 Pitt Street, Sydney [1] Aspect Industrial Estate, Sydney
1. Images are artist impressions only, final design may differ. 2. Represents 100% expected end value/revenue (including GST), subject to various factors outside Mirvac’s control, such as planning outcomes, market conditions, construction cost escalation, supply chain
risks, weather and other uncertainties. Industrial expected end values exclude the sale of any undeveloped land. 3. Aspect North and South. As at 30 April 2024, includes Agreement for Lease (AFL) and non-binding Heads of Agreement (HoA). Excluding HoA, Aspect
is ~57% leased and 55 Pitt St is ~9% leased at 31 March 2024 and 30 April 2024. 4. MGR operating as development manager. Represents forecast value on completion, incorporating a stabilisation allowance and subject to various factors outside of Mirvac’s control,
7 MAY 2024
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- Images are artist impressions only, final design may differ. 2. Represents 100% expected end value/revenue (including GST), subject to various factors outside Mirvac’s control, such as planning outcomes, market conditions, construction cost escalation, supply chain risks, weather and other uncertainties. Industrial expected end values exclude the sale of any undeveloped land. 3. Aspect North and South. As at 30 April 2024, includes Agreement for Lease (AFL) and non-binding Heads of Agreement (HoA). Excluding HoA, Aspect is ~57% leased and 55 Pitt St is ~9% leased at 31 March 2024 and 30 April 2024. 4. MGR operating as development manager. Represents forecast value on completion, incorporating a stabilisation allowance and subject to various factors outside of Mirvac’s control, such as planning outcomes, market conditions, construction cost escalation, supply chain risks, weather and other uncertainties. 5. New Home Sales Settlements in 12 months to 31 March 2024.
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UNIQUE CREATION ADVANTAGE
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Capital partnering to unlock ~$31bn[1] development pipeline
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Mirvac Industrial Venture BTR Venture Living sector partnership opportunities
Expanding Industrial venture with Australian Retirement Trust Progressing BTR venture Active discussions to expand Residential partnerships
JO with
Supalai
TOTAL
VEHICLE SIZE [1,2]
Switchyard, Sydney LIV Munro, Melbourne | image credit: James Horan ~$1.8bn Smith Lane, Melbourne [3]
~$1bn VENTURE [1]
Aspect Industrial Estate, Sydney LIV Anura, Brisbane [3] Harbourside, Sydney [3]
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- Represents 100% expected end value / revenue (including GST), including where Mirvac is only providing Development Management Services, subject to various factors outside Mirvac’s control, such as planning outcomes, market conditions, construction cost escalation, supply chain risks, weather and other uncertainties. 2. Total vehicle size subject to execution of non-binding HoA for Aspect South, event occurred post 31 March 2024. 3. Artist impression, final design may differ.
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Lifting exposure to cash flow resilient Investment assets
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CASH FLOW RESILIENT INVESTMENTS
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MODERN, PRIME, CORE CBD OFFICE INCREASED INDUSTRIAL EXPOSURE
UNDERSUPPLIED LIVING SECTORS URBAN RETAIL FOCUS
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CASH FLOW RESILIENT INVESTMENTS
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High-quality Office portfolio performing strongly, with minimal expiry risk
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95.0% ~56,400sqm 8.2 yrs 100% 5.3 star 9.5 yrs
Occupancy [1] Leasing deals FYTD Average lease term Prime grade [2] Average NABERS Average
(3Q23: 96.1%) additional ~20,240sqm under HoA on 3Q24 deals energy rating [3] portfolio age
(3Q23: ~36,500sqm)
Tenants continue to demand Premium space Strong leasing activity resulting in low near-term expiry profile
Core market rolling annual absorption by grade
300,000 sqm TENANT TENANT TENANTS
SECURED RETAINED SECURED
Optiver AGL Gadens &
Work Club
0
(300,000)
(600,000)
9,225sqm | 10yr lease term 19,303sqm | 8yr lease term 4,708sqm | 9yr average lease term [4]
Premium A-Grade Secondary
275 Kent Street, SYD 699 Bourke Street, MEL 8 Chifley Square, SYD
Sydney, Melbourne, Brisbane, Perth | Source: JLL Research March 2024
Mar 20 Sep 20 Mar 21 Sep 21 Mar 22 Sep 22 Mar 23 Sep 23 Mar 24
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By area, excluding assets held for sale (367 Collins St, Melbourne), properties held in co-investments and IPUC, as at 31 March 2024.
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By portfolio valuations, as at 31 December 2023, excluding properties held in co-investments and IPUC.
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Average for Mirvac office assets (excluding MWOF assets).
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Blended average lease term of 2 deals.
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CASH FLOW RESILIENT INVESTMENTS
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Sydney Industrial portfolio benefiting from strong demand and tight supply
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99.0% 6.6 yrs ~22,400sqm +17.1% 100%
Occupancy [1] WALE [2] Leasing deals FYTD 3Q24 gross re-leasing spreads Sydney portfolio
(3Q23: 100%) (3Q23: 6.2yrs) (3Q23: ~40,900sqm)
$2.5bn [4] development pipeline located nearby new Western Sydney Airport
M2
M1
PENRITH
BLACKTOWN SWITCHYARD PARRAMATTA
COMPLETED
M4 1H24 ~18%
ASPECT:
COMPLETIONFIRST Rent growth [3]
3Q24 IRON COVE LINK AND
ROZELLE INTERCHANGE
ELIZABETH OPENED 2023
ENTERPRISE M7 M4
M12 FAIRFIELD
M12 CONSTRUCTION M4-M5 SYDNEYCBD
COMPLETES 2026
WESTERN SYDNEYAIRPORT LIVERPOOL BANKSTOWN NOW OPENNEW M5 SYDNEY 1.3%
NEW 24HR INTERNATIONAL AIRPORT – OPENING 2026 M5 M5 AIRPORTBOTANYPORT Vacancy [3]
Switchyard, Sydney
Recently completed new road infrastructure Mirvac Industrial portfolio assets
SYDNEY MARKET
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- By area, as at 31 March 2024. 2. By income, as at 31 March 2024. 3. Source: JLL Research March 2024, SA1 Property March 2024. Rent is average of all Sydney sub-markets. 4. 100% expected end value of Aspect, Kemps Creek & Elizabeth Enterprise, Badgery’s Creek, subject to various factors outside Mirvac’s control such as planning outcomes, market conditions, construction cost escalation, supply chain risks, weather and other uncertainties.
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CASH FLOW RESILIENT INVESTMENTS
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Repositioning Retail to drive continued performance
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98.1% ~44,200sqm 3.3% $11,174/sqm 13.8% 4%
Occupancy [1] Leasing deals FYTD Specialty MAT growth Specialty sales Speciality Foot traffic
(3Q23: 97.3%) (3Q23: ~61,600sqm) (3Q23: 28.6%) occupancy cost [2] growth
Active management improving retail portfolio quality
20% Occupancy cost $12,000/sqm
$11,174/sqm
~18%
above benchmark
10,000
Mirvac customer
spend $1,759 [3]
15
13.8% 8,000 ~25%
above national income
Mirvac main
trade area average
personal income [3]
10 6,000
3Q20 1Q21 3Q21 1Q22 3Q22 1Q23 3Q23 1Q24 3Q24
Specialty occupancy cost (comparable) (LHS) [2] Specialties comparable MAT productivity (RHS) Orion Springfield Central, Brisbane
MIRVACRETAIL
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By area, as at 31 March 2024.
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Includes contracted COVID-19 tenant support.
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Source: CommBank iQ and ABS, December 2023.
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FY24 guidance
Subject to no material changes to the operating environment, and executing on our FY24 priorities including:
Completion of 55 Pitt St sell-down
Mirvac is targeting
Completion of Aspect South sell-down
Operating EPS of
Distribution of
14.0-14.3c 10.5c
Residential settlements
Multiple drivers of growth over time
Investment portfolio
Funds management
Residential completions
Development pipeline
Resilient, modern, high-quality assets benefiting from growing tenant and capital preference for quality, modern, sustainable assets and development completions
Delivery of residential pipeline into under supplied market, underpinned by ~$1.3bn pre-sales[1]
Value creation from diversified ~$11.2bn CMU development pipeline[2] , utilising internal design and construction platform
Growth opportunities across multiple asset classes utilising deep operational capabilities
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Thyme Lifestyle Resort Evans Head, NSW
(artist impression, final design may differ)
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Aspect Industrial Estate, Sydney
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Waterfront Isle, Brisbane
(artist impression, final design may differ) Harbourside, Sydney (artist impression, final design may differ)
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Secure balance sheet position supported by deep capital partnerships
Proven >50 year track record, Sustainability Strong employee integrated platform focus engagement
Underpinned by balance sheet, culture and capability
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- Represents Mirvac's share of total pre-sales and includes GST. 2. Represents 100% expected end value / revenue (including GST) including where Mirvac is only providing Development Management Services, subject to various factors outside Mirvac’s control such as planning outcomes, market conditions, construction cost escalation, supply chain risks, weather and other uncertainties. As at 31 December 2023.
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MIRVAC MACQUARIE AUSTRALIA CONFERENCE
Thank you
Contact
Gavin Peacock, CFA | General Manager Investor Relations [email protected]
Authorised for release by
The Mirvac Group Continuous Disclosure Committee
Mirvac Group
Level 28, 200 George Street, Sydney NSW 2000
IMPORTANT NOTICE
Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust (ARSN 086 780 645). This document has been prepared by Mirvac Limited and Mirvac Funds Limited (ABN 70 002 561 640, AFSL number 233121) as the responsible entity of Mirvac Property Trust (collectively “Mirvac” or “the Group”). Mirvac Limited is the issuer of Mirvac Limited ordinary shares and Mirvac Funds Limited is the issuer of Mirvac Property Trust ordinary units, which are stapled together as Mirvac Group stapled securities. All dollar values are in Australian dollars (A$). This document is not financial advice or a recommendation to acquire Mirvac stapled securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision prospective investors should consider the appropriateness of the information in this document and the Group’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange having regard to their own objectives, financial situation and needs and seek such legal, financial and/or taxation advice as they deem necessary or appropriate to their jurisdiction. Mirvac Funds Limited is entitled to receive ongoing fees in connection with the authorised services provided under its Australian Financial Services licence to Mirvac Property Trust. Mirvac directors and employees do not receive specific payments of commissions for the authorised services provided under Mirvac Funds Limited’s Australian Financial Services licence. The information contained in this document is current as at 31 March 2024, unless otherwise noted.
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