Key Highlights

  • FY27 guidance was reaffirmed at operating earnings of 13.2 to 13.4 cents per stapled security and a distribution of 9.9cpss.
  • Investment portfolio occupancy was 97%, matching 1Q26, with industrial gross leasing spreads of about 22%.
  • Residential net deposits and lots exchanged were 429, down 17% on 4Q26, alongside 291 settlements versus 265 a year earlier.
  • About 75% of the $200m on-market buy-back had been completed as at 20 October 2026.

Mirvac Group (ASX:MGR) reported an operational update for the first quarter of the 2027 financial year (1Q27) on 22 October 2026, reaffirming guidance for operating earnings of between 13.2 and 13.4 cents per stapled security (cpss) and a distribution of 9.9cpss. The guidance is subject to no material changes in the operating environment and to delivery of key initiatives.

The update describes a stable investment portfolio, a slower residential market and continued development and funds activity, while about 75% of a $200m on-market buy-back has been completed.

Investment Portfolio Occupancy and Leasing

Portfolio occupancy was 97% by area on the stabilised portfolio excluding co-investments, unchanged from 1Q26. Office occupancy was 96%, supported by about 24,460sqm of leasing, including the renewal of Google at 1 Darling Island in Sydney. Lease expiries are limited to 2% of income in FY27 and 6% in FY28. The sale of 380 St Kilda Road in Melbourne settled, and leasing at 7 Spencer Street in Melbourne improved to 32%, including agreements for lease and non-binding heads of agreement (about 24% excluding the latter).

Industrial occupancy was 97%, affected by a tenant exit at Calibre Estate in Sydney, where discussions on the vacant space are under way. Gross leasing spreads were about 22%, and all leases have commenced across the north and south precincts at Aspect Industrial Estate.

Retail occupancy was 99%, with moving annual turnover growth of 3.2%. Around 9,470sqm was leased at an average rent review of 4.6%, specialty sales grew 4.7% and specialty sales productivity rose to $12,574/sqm. In living, the stabilised build to rent portfolio was 93.7% leased at 30 September with net leasing spreads of 3.5%, and land lease recorded 84 settlements and 97 sales, including a new community at Portarlington on the Bellarine Peninsula.

Residential Sales and Development Progress

Residential net deposits and lots exchanged totalled 429, down 17% on 4Q26 and including 282 conditional exchanges. Mirvac said activity moderated, particularly in New South Wales and Victoria, with softer demand in Queensland and a resilient Western Australia. Leads fell 30% from 4Q26. There were 599 open deposits on hand, 84% weighted to Western Australia and Queensland.

Settlements reached 291 lots, compared with 265 a year earlier, and included the first apartment settlements at Highforest in Sydney. The 12-month rolling default rate was 1.1%, below the long-term average. Pre-sales stood at about $1.4bn, and the pipeline exceeds 26,000 lots. Mirvac also exchanged on about 730 lots adjacent to its Smiths Lane project in south-east Melbourne, on capital efficient terms, with settlement expected in October 2026.

On the commercial side, Harbourside and 55 Pitt Street in Sydney topped out in August and September respectively, with pre-leasing of about 30% and about 43%. The Trielle project at Yarra's Edge in Melbourne also topped out, and construction began on the first warehouse at SEED, Badgerys Creek, expected to complete in mid-2027. A condition precedent was satisfied at Hunter Street East, adding $3bn to the pipeline.

Funds Platform and Capital Management

Kit Georgeos was appointed Chief Executive Officer, Funds Management. The Mirvac Wholesale Office Fund deployed about $600m into two Premium-grade CBD office assets in Sydney and Melbourne and raised a further $50m, taking capital raised since April 2025 to the equivalent of about $680m. Another capital raise is intended to launch in the first half of FY27. LIV Mirvac Fund launched a capital raise, and Mirvac Retail Venture is actively assessing market opportunities.

Group CEO Campbell Hanan said the residential environment in FY27 has been challenging, citing interest rate rises and tax changes affecting consumer sentiment. He described the $200m buy-back, announced in August, as an attractive use of capital at the current security price while retaining flexibility for other opportunities.

Where the Quarter Leaves Mirvac

Mirvac closed 1Q27 with guidance unchanged, occupancy at 97% and a residential business showing lower sales but higher settlements than a year earlier. The FY27 assumptions include 2,800 to 3,100 residential lot settlements, weighted towards the second half, and a weighted average cost of debt rising from about 5.7% to 5.8% after a 0.25% cash rate increase in September. Mirvac said the combination of pre-sales on hand, low defaults and a ramp up in project activations provides visibility of FY27 earnings.