Mirvac doubles profits, with strong contributions from Glebe's Harold Park

Off-the-plan sales for Mirvac’s $1.1 billion flagship residential development, Harold Park in the inner-Sydney suburb of Glebe, as well as its 42-storey Era tower in Chatswood helped Mirvac more than double its annual profit for the 2012 financial year.

Mirvac reported net profit of $416.1 million for the year to June 30, up from $182.6 million in the previous year, with the result boosted by the sale of its hotel management business, which added $21.4 to the bottom line.

Outgoing Mirvac managing director Nicholas Collishaw says  the profit growth came at a time when conditions in many parts of the property sector were not buoyant.

He said Mirvac had beaten its guidance despite a “tough year” and amid tough global conditions.

“The results demonstrate the business model is working,” said Collishaw today at the company's full results media briefing.

Outgoing Mirvac CFO Justin Mitchell said the group delivered returns within targeted objectives.

This included settling 1,807 residential lots and securing future income of $907 million, which exceeded previous guidance. About 88% of settlements were below $1 million.

Mirvac is targeting 1,800 lot sales in 2013 financial year, with another tough year expected for the residential sector. 

“New projects are being targeted at the right price points and right locations,” said Collishaw.

The top contributor to residential sales revenue came from the 42-level Era, with 98% of the 295 apartments sold, contributing nearly $290 million.

Mirvac reported that 190 or 64% of the 296 lots at the 10.6-hectare site at Harold Park have now been sold, contributing revenue of $262 million.

Collishaw called it Mirvac's most "significant" project" and said it was being developed on target.

Site works at Harold Park are expected to commence in August.

Mirvac’s Yarra’s Edge river houses and Yarra Edge Towers are more than 80% sold, with Collishaw saying the apartment project was the highest contributor to earnings. 

Mirvac has just under 30,000 lots in the residential development pipeline, with future projects include Clyde North in Melbourne’s south-east growth corridor, a 200-hectare site acquired in December 2011, which will have 2,100 lots on completion.