Mirvac scales up unit projects

Mirvac is looking to defy predictions of a sharp fall-off in the residential market with two new Sydney unit projects.

Mirvac CEO Susan Lloyd-Hurwitz at their head office in Sydney. Picture: Britta Campion

Property developer Mirvac is looking to defy predictions of a sharp fall-off in the residential market with two new Sydney projects, one with a build-to-rent component at Olympic Park and a super-tall luxury city skyscraper.

Mirvac on Friday topped out its Pavilions project in the Olympic precinct, saying the soon-to-be-launched rental product, one of the first offered by an institution in Australia, could support prospective renters looking for options in the wake of the coronavirus crisis.

With Verde, the first building at Pavilions, completed, residents began moving in last month, and renters are expected to follow by September. This would put Mirvac ahead of rival schemes by developers including Grocon, Salta Properties and US giant Greystar.

Mirvac chief executive Susan Lloyd-Hurwitz said the 696 apartments at Pavilions would be split between traditional sale and rental products.

About three-quarters of units have pre-sold and defaults are at just 2 per cent.

Ms Lloyd-Hurwitz said volumes were down but the rental product could open up new markets.

“We have more than 1500 leads in our database from very little social marketing,” Ms Lloyd-Hurwitz said, noting the attraction of longer security of tenure with an institutional landlord.

With unemployment forecast to top 10 per cent, she said some families may struggle to service mortgages but should still have access to the stable housing that build-to-rent provided. Offshore the buildings have also been the least affected asset class during the COVID-19 crisis due to their steady cash flows.

Mirvac is also preparing for the next luxury apartment cycle and has won approval for a Sydney CBD scheme it is managing for landowner Coombes Property, which will become the city’s highest apartment tower once it is built.

Mirvac and Coombes have just secured planning consent for a residential-led precinct at 505 George Street with the super-tall 270m tower aimed at re-establishing Sydney’s iconic George Street as the centre of the city.

The site, with significant street frontage to George and Kent streets, is currently occupied by Event Cinemas, food retailers, a Timezone and a college.

The swish 90-level tower is to include 507 apartments, including luxury serviced suites and a rooftop restaurant and bar, while the podium comprises a boutique cinema, retail and conferencing facilities. The pair are keen to push ahead with the project even as developers confront a tough environment for luxury unit sales, although Crown Resorts and Lendlease have been able to pre-sell units at the harbourside Barangaroo precinct at a premium.

Coombes director Michael Coombes said the project had the potential to redefine Sydney’s mid-city area.

“With its prominent location at the city’s southern gateway and its distinctive design, 505 George St will become a new icon for the city skyline. Its delivery will signal the resurgence of Sydney’s Mid-Town, revitalising the historic precinct, which includes the adjacent Town Hall complex, and bringing it back into line with nearby Darling Harbour and Circular Quay, by making it a global destination in its own right,” he said.