Mirvac slashes value of shopping centres

Sharp devaluations on its portfolio of retail properties have delivered at $306m hit to property manager Mirvac.

Mirvac’s Stanhope Village shopping centre in Sydney. Picture: Supplied.

Property developer Mirvac has revealed sharp devaluations, cutting about $306m off its portfolio. The falls confined to its hard hit retail business, which was down by close to 10 per cent.

The value shifts shows this sector remains the most vulnerable while office and industrial properties are holding up even as the coronavirus ravages the economy.

“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,“ Mirvac chief executive Susan Lloyd-Hurwitz said.

The company‘s preliminary valuations for June 30, 2020, across 63 assets indicate a reduction in value of $306m, or about 2.8 per cent compared to the book value as at the end of December.

The retail portfolio was off by $349m representing a plunge of 9.9 per cent. Mirvac owns centres including Sydney‘s Broadway and Tramsheds, where trading has been down.

The office portfolio rose by $23m, lifting in value by 0.4 per cent, and industrial was up $13m, or 1.4 per cent. Mirvac owns towers including a stake in the new Commonwealth Bank building in Redfern in South Sydney.

Mirvac said it had entered into $810m of new debt facilities with maturities ranging from 3 to 4-and-a-half years and it had cash and undrawn debt facilities of more than $1.3bn with only $200m of debt due for repayment between now and early 2022. The group has A3/A- credit ratings with stable outlooks from Moody’s and Fitch.

Mirvac also announced that its full distribution for this financial year was 9.1c per security, meaning the distribution for this half year would be just 3c per security.