Mirvac's development division on track for 10% return
Mirvac directors believe the 2013 calendar year will represent a trough in the office market cycle, while demand for residential developments will remain high as low interest rates entice first home buyers.
In the September quarter investor update, the diversified trust reaffirmed the 2014 financial year operating earnings per security guidance range of 11.7¢ to 12¢ per security and distribution guidance range of 8.8¢ to 9¢ per security.
Mirvac chief executive and managing director Susan Lloyd-Hurwitz told analysts the group had progressed on a number of key objectives in the quarter and continued to execute on its strategy to deliver stable income and focused growth.
She said the group's office developments were on track with the demolition of 200 George Street, Sydney, and the start of construction at 699 Bourke Street, Melbourne. The new assets would augur well for attracting new leasing deals.
The environment for retailers remained challenging, but the increased residential house prices and low interest rates had improved consumer sentiment.
"I am pleased to announce that we remain on track to deliver our target of a 10 per cent return on invested capital for the development division in 2014," Ms Lloyd-Hurwitz said.