Asset sale may put Mirvac on prowl

Mirvac Group’s transformation under chief executive Susan Lloyd-Hurwitz is stepping up a gear with private equity giant Blackstone eyeing the purchase of about $800 million worth of passive assets from the listed group.

Selling off a substantial slice of the $7.2 billion property portfolio would enable the group to pour the proceeds back into its higher-returning development pipeline just as the residential market booms.

It would also be a coup for Ms Lloyd-Hurwitz who was controversially brought into Mirvac with a mandate to win over international investment partners and follows from the group securing US financial services powerhouse TIAA-CREF in February as a partner on its office development pipeline.

The portfolio deal — foreshadowed by The Australian last week — is to be anchored by Mirvac disposing of a half-stake in the $900 million Sydney landmark Westpac Place to Blackstone, which is chasing a further six assets from Mirvac.

Agents JLL and CBRE are handling the Westpac Place sale, while Blackstone is thought to be looking at other Mirvac assets including Sydney’s 1 Castlereagh Street and properties in West Pennant Hills and North Ryde.

One analyst suggested Mirvac could deploy the sale proceeds into buying joint venture partner Leighton Properties out of the Perth City Link project, including the Queen’s Square mixed use precinct.

Perth City Link, a $5.2bn public-private partnership contract issued by the WA state government, will comprise 1200 apartments and about 150,000sq m of office and retail space.

The $800m could also be funnelled into a takeover bid if Mirvac could muster the support of TIAA-CREF, the analyst said.

“It’s a lot of money to give back to shareholders right away,” the analyst said, indicating that a capital return was unlikely in the short-term.

Mirvac last November outlaid $552m to buy the Harbourside Shopping Centre in Sydney and two office buildings in Melbourne. It also paid $584m to buy seven office towers from GE Real Estate Investments Australia.