Archive | Mirvac

World property W1Jul15 – Qataris fund Sydney tower, Brisbane congestion, Mirvac buys for apartments & houses

Qatar fund joins Lend Lease for $A2 billion Barangaroo tower
Lend Lease wins tender for Brisbane motorway widening
Mirvac buys Sydney apartments site & 481ha for Brisbane homes

Qatar fund joins Lend Lease for $A2 billion Barangaroo tower

Lend Lease Corp Ltd has launched a wholesale open-ended property fund to invest in the $A2 billion commercial Tower 1 at Barangaroo South, in the 22ha redevelopment zone between Darling Harbour and the Sydney Harbour Bridge. The former container port is being transformed to become a global financial hub, with a headland park.

Lend Lease One International Towers Sydney Trust is the second fund established to invest in the precinct and takes total equity raised to $A3.4 billion. Construction of Tower 1, the third & largest commercial tower, began in April 2014.

Barangaroo, beside the old Sydney cbd.

Barangaroo, beside the old Sydney cbd.

The new fund will acquire 100% of Tower 1 with $A1.4 billion of equity commitments from capital partners & $A600 million of debt financing. The Qatar Investment Authority has committed to a 37.5% investment and the Lend Lease-managed Australian Prime Property Fund Commercial has committed to a 25% investment. Consistent with its strategy of investing alongside capital partners, Lend Lease will hold the remaining 37.5% as a co-investor.

Lend Lease recently signed leasing arrangements with Marsh & McLennan Companies for 10,400m² (4½ floors) and Servcorp for 2300m² (one floor). PricewaterhouseCoopers & HSBC were already signed up.

Lend Lease group chief executive & managing director Steve McCann said pre-leasing of the 3 towers had reached 66%. All 3 are under construction. Completion of Towers 2 & 3 is expected in the 2016 financial year (which starts today) and Tower 1 in the 2017 financial year.

Tower 1, 48% leased, will have 101,000m² of commercial net lettable area & 6000m² retail, Tower 2 88,000m² & 1000m² (79% leased) & Tower 3 78,000m² & 4500m² (76% leased).

The Barangaroo South precinct will also host a Crown Resorts Ltd integrated resort, agreed a month ago after Lend Lease lodged a modification to its revised concept plan

Links: Barangaroo South
Lend Lease

Lend Lease wins tender for Brisbane motorway widening

Lend Lease Corp’s Lend Lease Engineering Pty Ltd was named last Friday as the successful tenderer for design & construction of the $A1.162 billion Gateway upgrade north project in Brisbane.

Queensland’s Assistant Minister for Infrastructure & Regional Development, Jamie Briggs, and Minister for Main Roads, Road Safety & Ports, Mark Bailey, said the project would fix one of the state’s most congested & important motorways which formed a vital link between key freight hubs, such as the Port of Brisbane & Brisbane Airport.

It will widen an 11km kilometre section of the motorway from 4 to 6 lanes and widen the Deagon Deviation to 2 lanes in each direction.

The Federal Government has committed up to $A929.58 million and the Queensland Government $A232.42 million to the project, scheduled for completion in 2018.

Link: Gateway project

Mirvac buys Sydney apartments site & 481ha for Brisbane homes

Australian masterplanned residential developer Mirvac Group has signed up for 2 new sites in the last 3 weeks, one for 500 apartments & 7500m² of commercial space at St Leonards, 5km from the Sydney cbd. The other is a 481ha acquisition in a Brisbane growth corridor for 3000 homes.

The 5000m² St Leonards site, near the train station at 472 & 486 Pacific Highway, has recently been zoned for mixed use. Mirvac has bought it from CIMIC Group Ltd for $A121 million.

In Brisbane, Mirvac has bought a 481ha parcel at Greenbank, in the greater Flagstone priority development area 30km south-west of the cbd. The Australian Financial Review estimated it cost $A15-20 million.

Links: Mirvac
Australian Financial Review story
Brisbane Courier-Mail story

Attribution: Lend Lease, Mirvac, AFR, Courier-Mail

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property W15Oct14 – Mirvac buys Birkenhead Pt, NAB adds UK asset manager, Scotland replaces stamp duty, Sovereign funds trade in London

Mirvac buys Birkenhead Point
NAB buys into UK manager Orchard Street
Scotland replaces stamp duty
Norges Bank buys $1.2 billion London building from GIC

Mirvac buys Birkenhead Point

Birkenhead Point, Sydney.

Birkenhead Point, Sydney.

Mirvac Group has entered into an agreement to acquire the Birkenhead Point Shopping Centre at Drummoyne, 5km from the Sydney cbd, including the adjoining carparking facility & marina, for $A310 million.

CDL Hotels NZ Ltd (now Millennium & Copthorne Hotels NZ Ltd) sold Birkenhead Point to Intro International Ltd (Denis Jen) in 2004 for $120 million. It had been an asset of Kingsgate International Corp Ltd, controlled by CDL & Tai Tak Securities Pte Ltd.

Abacus Property Group & the Kirsh Group bought it in 2010 for $A174 million and upgraded the retail offer into a convenience-based shopping centre & fashion outlet centre. The 187-berth marina was in the final upgrade stages.

Mirvac said its purchase, expected to be completed in November, represented a fully let passing yield of 6.6%.

The 3.7ha waterfront site has a gross lettable area of 33,100m² and parking for 1395 cars. Moving annual turnover is $A228.5 million at $A8082/m².

Link: Mirvac Group

NAB buys into UK manager Orchard Street

National Australia Bank’s global asset management business, NAB Asset Management, has bought a majority stake in UK specialist commercial property investment manager Orchard Street Investment Management LLP from the existing partners.

The bank has 12 other global asset managers operating in all major asset classes, managing $A178 billion in 50 investment strategies.

Orchard Street has grown its assets under management from £800 million to £4 billion in 10 years.

Scotland replaces stamp duty

A new land & buildings transaction tax will replace stamp duty in Scotland next April, and Property Wire editor Ray Clancy said at the weekend he expects this to herald change in the rest of the UK.

The starting threshold is £135,000, up from the stamp duty threshold of £125,000. A marginal tax of 2% will apply to the proportion of a transaction between £135-250,000, a 10% rate will apply between £250,001-1 million and there will be a new 12% tax on properties costing more than £1 million.

The Scottish Government’s Cabinet Secretary for Finance, Employment & Sustainable Growth, John Swinney, announced the rates & bands for the tax last Thursday, as part of the draft budget for 2015-16. The proposed rates & bands are subject to parliamentary approval.

It’s the first tax created by a Scottish parliament in 300 years.

Links: Scottish Government, land & buildings transaction tax
Property Wire, Property tax set for major change in the UK

Norges Bank buys $1.2 billion London building from GIC

The Bank of America Merrill Lynch Financial Centre, London.

The Bank of America Merrill Lynch Financial Centre, London.

Norway’s state-owned investment fund based on oil royalties, Norges Bank Investment Management, bought a 54,350m² London office complex (at left, aerial shot above) for £582.5 million ($NZ1.182 billion) cash last week from the Singapore Government’s sovereign wealth fund, GIC.

GIC bought the property from Merrill Lynch & Co Inc in 2007 for £480 million.

The property, the Bank of America Merrill Lynch Financial Centre at 2 King Edward St, is a freehold office campus consisting of 4 independent office buildings occupying a 1.3ha site. It’s fully leased to Bank of America Merrill Lynch, which will continue to manage it.

The Norwegian fund also bought a 50% interest in a 42,000m² Dutch logistics property last week, through its joint venture with US company Prologis.

Norges paid €12.4 million, again with no debt financing, for the building in Born.

Link: Norges Bank Investment Management

Attribution: Mirvac, Abacus, NAB, Orchard St, Scottish Government, Norges Bank

Regular leads: Europe Real Estate, Mingtiandi, Planetizen, World Property Channel

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Mirvac venture pays $A5.7 million to manage $A3.1 billion US fund

Updated 24 January 2006

Mirvac Group put a price tag on the rights Quadrant acquired yesterday (story below): $A5.7 million.


Original story: Mirvac adds $A3.1 billion to funds under management with new US business


Published 23 January 2006

Mirvac Group of Australia has almost doubled its funds under management to $A6.5 billion by putting together a 50:50 US-based institutional real estate funds management business, Quadrant Real Estate Advisors LLC, with a group of former GMAC executives.

Quadrant has acquired the rights to manage $A3.1 billion in US real estate debt funds from GMAC Institutional Advisors LP. These investments are managed in both separate accounts and commingled (wholesale) funds for a range of institutional & pension fund clients, including CalPers (the California Public Employees’ Retirement System).

The GMAC group joining Quadrant were senior executives of GMAC Institutional Advisors LP’s real estate fixed income group.

Atlanta-based Quadrant will also manage a construction-to-permanent loan programme between GMACCM & TIAA-CREF, one of the largest retirement systems in the US and one of the largest institutional real estate investors in the US.

Paramor says it’s a funds management platform

Mirvac managing director Greg Paramor said: “Quadrant is consistent with Mirvac’s strategy of growing its funds management business. Quadrant provides a platform for Mirvac to enter the US real estate funds management business by partnering with a team of high-calibre professionals in the real estate business that have built a strong track record and enjoy a very positive reputation amongst US institutional investors & asset consultants.”

Mirvac’s existing funds management business is through James Fielding Funds Management. Its chief executive, Adrian Harrington, said Quadrant was well placed to raise capital from US institutional investors and would allow Australian institutional & retail clients to invest “across the entire $US3 trillion US real estate investment universe.” Quadrant would also enhance the ASX-listed JF US Industrial Trust, which has been investing in Chicago-based industrial property.

Quadrant chief executive Kurt Wright said many of the GMAC group had worked together since the early 90s and there would be no change in the team’s personnel or processes.

He said the new company would launch a commingled fund in the first quarter of 2006. The new Quadrant Fund’s objective would be to allow both US & Australian investors to receive a high stable income return with liquidity by seeking relative value across the 4 quadrants (public & private, debt & equity) of the US real estate investment market

Quadrant will contract with GMAC Commercial Mortgage Corp for certain infrastructure support, and will also continue to access GMAC’s extensive regional mortgage origination network.

Blake Eagle, chief executive of the National Council of Real Estate Investment Fiduciaries and former president of Frank Russell’s real estate consulting business, will be an independent director of Quadrant.

Ex-Lend Lease executive Michael Wood at the centre of new project

Quadrant will be represented in Sydney by Michael Wood, who will be an executive vice-president & management committee member. Mr Wood was a Lend Lease Corp executive, most recently as executive vice-president of both Lend Lease Capital & Real Estate Services LLC & Bovis Lend Lease Americas Inc, until Lend Lease pulled out of the US.

In 2004 he established Wood Capital Advisors to identify & advise on US real estate investment opportunities for institutional investors, and has since provided strategic advice to both Australian & other foreign institutional investors on equity real estate acquisitions exceeding $US400 million.

Mr Paramor said Mr Wood had also been instrumental in developing & marketing US real estate-based hybrid debt & equity investment products in Australia.

If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


Attribution: Mirvac/Quadrant statement, story written by Bob Dey for this website.

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Mirvac expands housing estates business outside Sydney

Published 20 December 2005

Mirvac Homes is about to launch itself into the Victorian housing market with a 600-house estate 25km north of Melbourne.

Chief executive Robert Lynch said Mirvac had secured 43ha in Melbourne’s northern growth corridor, within the City of Whittlesea, for $A23 million.

Mirvac Group is one of Australia’s largest property groups, with over $15.0 billion of assets under control across the property spectrum, from investment and development to hotels and funds management.

The Melbourne master-planned estate will be Mirvac Homes’ first housing development outside Sydney, where it occupies a strong position at the quality end of the residential market. Mirvac Group has commercial, highrise apartment & integrated housing business in Victoria.

Mr Lynch said today the housing division’s expansion into Victoria was prompted by a critical shortage of suitable housing sites in Sydney and a desire to expand operations outside New South Wales. He said the company was also looking at South Australia.

If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

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Mirvac takes a hit after forecasting profit fall

Published: 8 May 2005

The Mirvac Group said on Tuesday it expected profit in the June 2005 year to fall 8.6% from last year’s $A252.7 million, but would use retained earnings to make up the $A266 million payout to securityholders.

Mirvac’s share price dive A75c as a consequence of the announcement, but regained A14c to end the week $A3.62.Managing director Greg Paramor said accounting policy changes meant the group had to recognise some earnings before they were realised, but instead of paying out early Mirvac had moved that money to retained (& deferred) earnings.

Based on expected sales for the June quarter, contract completion rates at pre-sold residential developments & delays to the completion of some projects, Mr Paramor said Mirvac’s 2005 net profit would be in the order of $231 million. Its $A252.7 million profit last year was a 13% increase on the 2003 figure.

Mr Paramor said the decrease would come equally from deferred sales at residential projects, increased development costs & a decision to retain projects previously earmarked for sale. The $A266 million distribution for the full year, maintaining the 95% payout ratio of the past 2 years, will require $A35 million from retained earnings.

Mr Paramor said retained earnings included a large amount of profit that Mirvac was originally forecast to realise in 2006-07. Introduction of international accounting standards from July meant Mirvac would return to its policy of only recognising profit on presale contracts on actual completion.

Strong March-quarter sales have pushed the value of Mirvac’s presales & deposits to more than $A800 million. 3 major Sydney apartment projects – Epica in Chatswood, Latitude in Milsons Point & Towns Place at Walsh Bay – have helped generate more than $A175 million in sales since 31 December.

The value of Mirvac’s exchanged contracts at the end of April, on which profit is yet to be recognised, has grown to $A803 million compared to the $A623 million reported in the half-year results.

Mr Paramor said the sales figures showed Mirvac’s ability to sell quality product in a slowing market, reflecting the strong Mirvac brand & the quality of the group’s residential development. Settlements are due this quarter at developments at Ephraim Island on the Gold Coast Broadwater, Epica and Tower 5 at Yarra’s Edge in Melbourne.

An earlier accounting standards change meant that since June 2003 Mirvac has been forced to recognise profits on some presales contracts before actual settlement, but Mirvac based its distributions to securityholders on actual realised profits, not recognised profits. This led to an increase in the group’s retained earnings.

“As a result our retained earnings, which in part are actually deferred earnings, have grown to $161.9 million and are available for us to support our distribution payments going forward in line with our original projections. We could have boosted the 2005 number but this would have been at the expense of future earnings,” Mr Paramor said.

Mirvac intends to recognise a proportion of the value created by the development of non-residential property delivered by its development divisions for long-term holding, supporting future distributions, but Mr Paramor said no profit from that value creation was included in the 2005 forecast.

He said Mirvac would provide guidance for the 2006 year after completion & review of the group budget cycle in early June.

Website: Mirvac


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

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Mirvac lifts profit 5.1%

Published: 17 February 2005

The Mirvac Group increased its December half-year profit by 5.1% to $A123 million on revenue up 17.4% to $A801 million.

The accounting period was closed on 28 December, the day before Mirvac acquired the James Fielding Group and James Fielding managing director Greg Paramor took over from Bob Hamilton as managing director of the enlarged group.

The ratio of pretax profit:revenue slipped from 19.2% in 2003 to 18.1% and the ratio of after-tax profit:equity slipped from 5.6% to 5.3%. Basic & diluted earnings/security were down from A17.23c to A17.07c. Asset backing increased by 4.6%, from $A3.02 to $A3.16.

Mirvac has increased dividend payment for the quarter from A8c to A8.3c/stapled security (A3.32c franked). Distributions for the half total A16.6c and the group is aiming for a total A33.8c distribution for the year.

Total assets increased from $A4.3 billion to $A4.55 billion. Net equity is up from $A2.24 billion to $A2.32 billion, including reserves of $A103 million & retained profits of $A162 million.

8 new acquisitions boosted the property investment division’s revenue by 5.7% to $A125 million and its after-tax profit rose 8% to $72 million.

Property development revenue from external customers rose 19.7% to $A618 million with recognition of several major projects nearing completion plus a strong contribution from housing developments. After-tax profit rose 9% to $A49.5 million. Mr Paramor said the development division would produce the bulk of its year’s contribution in the 2nd half.

In the hotels division, average room rates fell slightly, to $A171/night, and occupancy to 74%, but total external sales revenue rose 14.8% to $A55.4 million after after-tax profit rose 7.5% to $A6.2 million.

One accounting change 2 years ago, which the group didn’t like, will disappear in 2006 when international accounting standards are adopted.

The change in accounting standards 2 years ago forced Mirvac to start reporting profits from pre-sold apartments & homes from its development division. This was contrary to the group’s previous policy of only reporting development profit on settlement. At the time Mirvac happened to be holding an all-time high in exchanged presale contracts and the development division’s contribution to reported profits increased by 40%.

Reporting of development profits will revert to a cash settlement basis in 2006.

Website: Mirvac

If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

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Mirvac chief says having single tenant limits rental growth

Mirvac Group managing director Bob Hamilton put a positive spin on losing a 36,000m² tenant today: Having a single tenant in what is “without question the best building in North Sydney” limits rental growth.

Optus will vacate Mirvac’s 101 Miller St property when its lease expires on 31 October 2007, and will keep paying $A485/m² net until then.

Mr Hamilton said the decision by Optus would allow Mirvac its preferred option of reweighting the building’s tenancy profile.

“It is without question the best building in North Sydney and to have a single tenant is not our long-term preference as it limits rental growth.

“Market research from several commentators suggests there will be a significant increase in demand for office space in Sydney leading up to 2007, and we are confident there will be strong interest from potential tenants,” Mr Hamilton said.

Mirvac plans to upgrade certain areas of the building once Optus has completed its make-good requirements.

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Mirvac to take over James Fielding, with Paramor at helm

Mirvac Group – noted in Auckland as developer of the Quay West apartments hotel – said late on Tuesday it would acquire James Fielding Group, but that James Fielding managing director Greg Paramor would take over the helm from Bob Hamilton.

Mr Hamilton will remain as an executive director responsible for Mirvac’s development business.

The deal is a novelty for Mr Paramor. Previously, when he’s built up a business which has been sold, he’s walked away to start a new job. He was co-founder of Growth Equities Mutual, Paladin Australia & James Fielding.

Mirvac is a developer across all sectors and has property trusts, hotel management & funds management businesses. James Fielding has been a fast-growing funds manager after aggressively pursuing property trust management contracts. (Click on thumbnail for new structure).

The enlarged group will have $A15 million of assets under its control.

The proposal has to be voted on by James Fielding securityholders. They’ll get the explanatory memo mid-November and vote on the special resolution late in December. Assuming the scheme is given court approval, the takeover would take effect by the end of this year. Deloitte Corporate Finance Pty Ltd has been appointed as independent expert.

Mirvac is offering James Fielding securityholders 0.73 of a Mirvac security for every one of their securities, valuing James Fielding at $A3.33/security based on Mirvac’s 11 October closing price of $A4.56.

That’s a 6.4% premium on the James Fielding closing price of $A3.13 & 38.2% premium over the $A2.41 net asset backing.

It will make Mirvac the 4th largest ASX-listed property group by index weight. The group will have $A4.9 billion of total assets, a $A2.3 billion investment development pipeline & $A1.8 billion of funds under management.

James Fielding will add a range of businesses to the Mirvac operations. Apart from more funds management, it will add infrastructure, property financing, syndications & financial products businesses.

The important viewpoint is that of Mr Paramor, a former chairman of the Property Council of Australia: “The combination of the businesses provides James Fielding securityholders with access to a significantly larger balance sheet, more attractive funding options & a broader operating platform which will maximise JFG’s ability to capitalise on its existing projects.

“The ASX-listed JF Meridian Trust, which JFG manages, and in which JFG owns 15%, will continue as a separate vehicle at this time. JF Meridian investors will benefit from the larger capital base & resources that Mirvac will offer.”

Making the offer more enticing, Mirvac’s board said it would pay a distribution of A33.8c/Mirvac security for the 2005 financial year, up 5%. James Fielding securityholders will get their own distribution for the December half (A12.56c/security), then participate in the Mirvac quarterly distributions from 1 January 2005, giving them a total A24.81c/security for the year, up 4.2%.

Mr Hamilton said he’d decided to step back from the daily obligation of overseeing the whole group and approached Mr Paramor to take over.

Mr Paramor said: “Bob’s continued association with the group is integral to its future success. My decision to take on the role of managing director of Mirvac was predicated on Bob’s continuing active involvement & guidance. I have signed on for an initial term of 5 years.”

Mr Hamilton will hold 3 million securities and Mr Paramor, who has 4.4% of James Fielding, will initially hold 4.6 million Mirvac securities.

James Fielding’s executive director & head of property, Nicholas Collishaw, will head the group’s investment division, and Mirvac executive director Barry Neil will retire after 20 years with the group.

Leighton Holdings Ltd has 7% of James Fielding and said it supported the deal. It’s in an infrastructure joint venture and said there would be joint opportunities for the enlarged Mirvac & Leighton Properties.

Websites: Mirvac Group

James Fielding Group

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