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Mirvac (ASX:MGR) outlines retail property pain

Mirvac (ASX: MGR) has announced its distribution and valuation update for the year ending 30 June 2020.

What is Mirvac?

Mirvac is leading Australian property group with approximately $21 billion of assets under management. Operations include both commercial and residential projects, primarily based in Sydney and Melbourne, but also include Brisbane and Perth developments. Mirvac now has 47 years of experience since their establishment in 1972.

What did the property business announce?

Mirvac announced that the distribution for the half year to 30 June 2020 is 3 cents per share, bringing the total distribution for the year to 9.1 cents per share.

The property business also revealed its preliminary property valuations across 63 assets. It indicated a reduction of value of $306 million, or approximately 2.8%, compared to December 2019.

For the six months to June 2020, the office properties have been revalued 0.4% higher and the industrial properties have been valued 1.4% higher. However, retail properties have suffered a 9.9% valuation decline.

At 19 June 2020 Mirvac had cash and undrawn debt facilities of more than $1.3 billion with only $200 million of debt due for repayment between now and early 2020. Since 31 December 2019, Mirvac has entered into $810 million of new debt facilities with maturities ranging from 3 years to 4.5 years.

Mirvac CEO and Managing Director Susan Lloyd-Hurwitz said: “COVID-19 has transformed the world in the space of a few short months. No sector has been untouched by the health and economic crises that have developed. These are unprecedented times and Mirvac is taking necessary measures to address these challenges including appropriate capital management.”

Summary

It’s a tough time for property businesses right now, particularly ones that own retail properties. I’m not sure if Mirvac is good value, it’s uncertain how long COVID-19 impacts will affect Australia and the world. I think there are better shares for growth out there like Bubs (ASX: BUB).

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Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned. 

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