Mirvac taps Campbell Hanan as next CEO

The property veteran will step up at time when the housing market is turning.

Campbell Hanan, Mirvac Head of Office & Industrial

Property developer Mirvac has rapidly elevated senior executive Campbell Hanan to the post of chief executive, and he will step into the role next year after incumbent Susan Lloyd-Hurwitz departs.

The company this month announced the departure of chairman John Mulcahy and Ms Lloyd-Hurwitz in a dramatic shake-up of its top ranks.

The developer rode the residential property boom and grew its funds platform but has now been hit by the slowing of sales in its housing estates.

The chairman will depart at year end and the chief executive will stay until the end of March. The company said this month it would kick off the process for a new leader, with Mr Hanan being locked in just a week later.

He was tipped as the top internal contender and rival contenders included Lendlease’s departing global chief operating officer and US boss, Denis Hickey, and Stockland’s CEO Communities Andrew Whitson.

His elevation had been expected after he was drafted from Investa six years ago and built-up the company’s office and industrial unit and he led Mirvac’s efforts to secure the management of an $8bn AMP office fund.

The move is part of a broader switch across the property industry as veteran executives exit amid share market carnage for property companies.

More senior departures are expected and property groups will slash the value of their holdings and look for new strategies to get them out of the crisis.

Mr Hanan will be on fixed pay of $1.5m per annum, with short-term incentives of up to $2.25m and long-term incentives of same amount, taking his total package to up to $6m.

He has been on Mirvac‘s executive team since he joining in 2016 and is now head of Mirvac’s integrated investment portfolio. Mr Hanan will take up this appointment from early March.

In addition to his six years at Mirvac he has 29 years of experience in the property and funds management industry, 12 of which were with Investa Office, where he served in a number of senior positions, including as CEO.

Mr Mulcahy said that during his time at Mirvac, Mr Hanan had made a significant contribution and was instrumental in contributing to its urban strategy and transforming its portfolio into modern, sustainable assets.

Mirvac’s chair-elect, Rob Sindel, said the combination of Mr Hanan’s deep property investment, operational and funds management knowledge, together with his understanding of the Mirvac business, “makes him the ideal successor”.

Further executive changes are expected as chief investment officer Brett Draffen is also leaving.

Mirvac shares added 4.5c, or 2.3 per cent, to $2 on Friday.

Morgan Stanley analysts Simon Chan and Lauren Berry said after Mirvac released its quarterly update on Thursday that wet weather is impacting on delivery.

“Contingencies are still in place but these have reduced since June 2022,” they said.

Investors are concerned as Mirvac sold just 415 lots, in line with expectations but down against 583 in the previous quarter, due to the slowdown in first home buyers. Sales at key apartment projects like Willoughby and Waverley remain slow, with the bulk of activity in housing estates, they said.

Morgan Stanley noted that guidance for about $50m development profits remain unsecured. They cited positives including the integration of the former AMP fund and an uptick in occupancy of the office portfolio.

They said its retail portfolio is somewhat lagging peers with rent collection still 89 per cent and -2 per cent spreads.

Macquarie analysts have an outperform rating on Mirvac and are bullish on its prospects. “While the short term could be difficult given office and residential headwinds (albeit, office occupancy rose in the period), residential pre-sales provides a level of certainty for fiscal 2024 operating earnings per security and the current valuation does not factor in upside scenarios,” the bank‘s property team said.

It pointed to the potential for government moves in the residential market given tight vacancy and limited supply, and its plans for major commercial developments in Sydney and Melbourne.

Mirvac is selling assets to fund new development. The company and US private equity house Blackstone are selling Sydney landmark 60 Margaret St and MetCentre, with the complex to trade for close to $900m. Mirvac is also offloading a complex in Melbourne’s Collin St for about $450m and chasing a partner for its build to rent operations.