Mirvac Buys Sydney Mall, Melbourne Offices for A$552 MillionIain McDonald
Mirvac Group, Australia’s third-biggest diversified property trust by market value, said it will spend A$552 million ($526 million) to buy the Harbourside Shopping Centre in Sydney and two office buildings in Melbourne.
Mirvac will acquire the shopping mall in Sydney’s Darling Harbour on the western edge of the city center for A$252 million, the Sydney-based company said in a statement today. The three purchases are debt funded, boosting the company’s gearing ratio to 27.7 percent from 23.6 percent at the end of June, it said. Mirvac closed 0.3 percent higher at A$1.76 in Sydney and has advanced 19 percent this year.
The company said in May it would focus on high-quality offices and investment partnerships to increase returns after writedowns in its residential development business. The Sydney mall will increase Mirvac’s market share in the city center and benefit in the long-term from a planned A$3 billion redevelopment of much of the Darling Harbour precinct, the company said in today’s statement.
“The three assets will deliver attractive returns in excess of our stated targets,” Chief Executive Officer Susan Lloyd-Hurwitz said in the statement. “We are taking advantage of opportunities to build our Melbourne CBD office portfolio.”
Mirvac expects the three properties will add to operating earnings per share in the year ending June 30, 2014. The company reiterated its forecast for operating earnings per share of 11.7 cents to 12.0 cents this fiscal year.
The office buildings purchased in Melbourne are at 367 Collins Street, which has a fully-let yield of 7.8 percent, and 477 Collins Street, with a fully-let yield of 7.6 percent, Mirvac said.