This afternoon, Mirvac Group (ASX: MGR) announced that it has entered into an agreement to acquire a landmark site in Sydney. So far, there has been minimal market reaction to the announcement, with its share price falling very slightly from when the announcement was made, although its share price is up by 0.75% so far today. Over the past 12 months Mirvac’s share price has risen strongly by 32.09%.
What did Mirvac announce?
Mirvac reports that the site is currently occupied by Nine Entertainment Co. Holdings Ltd (ASX: NEC) and is being acquired from LEPC9 Pty Ltd, which is a joint venture between Australian property fund Lotus Property Fund and Hong Kong-based fund managers Euro Properties.
The acquired site has a concept plan approval for the development of 460 new dwellings and approximately 6,000 square metres of public open space. Mirvac has also entered into an agreement to acquire the TX Australia transmission property, which adjoins the Nine Entertainment site. Mirvac intends to demolish the TX transmission tower and repurpose that site (subject to approvals).
Together, the combined site spans 3.2 hectares and will be acquired in a capital efficient manner. The majority of the total consideration of approximately $249 million is on deferred terms.
Mirvac plans to proceed in accordance with the concept plan approval. The project will feature premium residences within a collection of high-quality boutique buildings situated among open spaces and landscaping.
A range of community benefits are proposed, including approximately 6,000 square metres of publicly accessible open space, the delivery of complementary retail, new and upgraded connections, and a mix of dwellings.
What about Mirvac’s recent financial performance?
Yesterday, Mirvac released its 1H FY20 results to the market, reporting a strong first half with an operating profit after tax of $352 million, a 21% increase on the prior corresponding period. The company’s earnings before interest and tax increased by 18% to $460 million and its statutory profit fell 5% to $613 million. However, the fall in net profit was result of higher net valuation gains on investment properties in the prior corresponding period. The company lifted its distribution by 24% to 6.1 cents per stapled security.
The post Mirvac announces acquisition of landmark Sydney site appeared first on Motley Fool Australia.
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