Mirvac’s urban strategy delivered excellent results in FY17, with operating earnings up 11 per cent and distributions up 5 per cent, at the top end of guidance provided.
The 2017 financial year was an outstanding year for Mirvac, and our ambition to reimagine urban life by creating, owning and managing high-quality assets in Australia’s largest cities has delivered strong results across the Group, positioning us well for the future.
Mirvac is an integrated, urban property group and a key contributor to Australia’s major cities.
Mirvac’s urban strategy and a strong focus on capital management delivered growth in FY17, and has ensured the Group is well placed for the year ahead.
In February this year, we launched Marrick & Co in Sydney’s inner west: a 220-apartment development on the old Marrickville Hospital site.
Mirvac has a priority focus on the health and safety of its employees, contractors and customers, and in FY17, we launched a refreshed policy and focus to strengthen our safety practices, behaviours and culture across our business, while supporting the wellbeing of our people, places and the communities in which we operate.
Developing a Reconciliation Action Plan (RAP) has been one of Mirvac’s key cultural goals over the past 12 months.
This Changes Everything is Mirvac’s sustainability strategy, comprised of four focus areas with long-term missions.
This Changes Everything FY17 at a glance
Mission: To create a framework for the future of place
As an integrated property developer, Mirvac is in a unique position to create a wide variety of places, from community precincts to office towers. One factor that’s consistent in our approach for all these project types is our long-term perspective. Given the fact we are more than just developers – we also own and manage our buildings – it’s in our best interests to really understand and embrace what these communities value and collaborate for the long term.
While technology is rapidly changing the way we live, work and communicate, some things – such as our basic human need to feel safe, supported and connected – remain consistent. When designing a new asset or residential project, we’re looking to meet these needs, creating places that will enhance the quality of life for the people who use them for many years to come.
Not only does this information allow us to better plan and design to provide these key elements, our initiative to measure its social return on investment has enabled good conversations with local and state governments about the wider benefits our developments deliver.
In FY17, our future focus saw us articulate a new vision for Mirvac as a whole: to Reimagine Urban Life.
Toby Long, General Manager of Residential Development NSW
Many of our customers want to live more sustainably, whether that entails growing their own produce, or cycling instead of taking the car. By integrating sustainable features into the fabric of our developments, we hope to deliver on the needs of these customers and make sustainable choices easier to make, driving positive change in the communities where we operate.
Mirvac’s commitment to sustainable living is nowhere better illustrated than at Marrick & Co, a newly launched residential project. The result of close collaboration with Inner West Council, Marrick & Co has environmental and social responsibility at its heart. This year, it became the very first One Planet Living community in NSW. For the full story, click here.
Following considerable internal and external consultation, we launched our sustainable lifestyles index this year in the form of the Mirvac liveability survey. This survey helps us to understand which elements of sustainable living are important to the choices our customers make. So we can respond directly to these needs.
The survey was piloted at two projects: Elizabeth Hills and Harold Park in Sydney, the first a suburban master planned community and the latter, predominantly apartments in the inner city. Their responses confirm the importance of the built form in creating and enabling sustainable lifestyles. For us, it’s a win-win, we’re innovating to ensure that customers get what they want, while we improve our ability to enable people to live well.
Part of our plan for a more sustainable future involves encouraging people to embrace alternative modes of transport, rather than depending only on our cars; whether it’s by integrating bicycle paths or end-of-trip facilities into our designs, or finding innovative ways to help people move around.
This year, we continued working towards our target to deliver green transport plans for all our assets, creating tailored plans for 21 of our assets across NSW. After assessing location, access, customer behaviours, and existing transport options, each plan sets out a number of ways to encourage sustainable travel, including installing bike racks and providing electric vehicle charging points, as well as carpooling programs and incentives to promote the use of public transport.
Climate change: reading the risks
Climate change has become an increasingly pressing concern for many Australians, including in the built environment. Given our reliance on water and exposure to the elements, as well as the long lifespans of our assets, it is important that we understand, inform, and minimise the risks climate change presents to our business, from damage caused by flooding or hailstorms, to loss of property value or insecurity of tenants’ tenure. There are also risks that may not be so immediate, but are potentially just as significant, such as vulnerability to rising energy, water and materials costs.
We have been working to build greater resilience across our business. While it’s our duty to meet compliance, we are also mindful that it’s good for us and better for the community to continuously improve the way we deliver sustainable infrastructure. Better, more resilient buildings mean improved risk management, including more predictable responses to the changing climate and better ability to meet changing customer requirements. To this end, we’ve adopted a climate change policy and are undertaking a climate risk disclosure review.
Housing affordability has reached crisis levels in parts of Australia, and Mirvac has made it our business to adapt as our customers’ needs change. The costs of both housing and living are big issues for many Australians and we are thinking deeply about how we can use our expertise, products and partnerships to make a difference. We launched an initiative called The Right Start at Sydney Olympic Park, which is designed to make it easier for first home buyers to secure a property by addressing some of the hurdles they face in securing a home. Read the full story here.
We have also been exploring other ideas to address affordability and access, including:
the multi-generational house, a modular housing design that can be added to over time, as a family’s needs change;
built-to-rent, which combats tenant insecurity by creating residential products with long-term leases in high-quality, well-maintained properties; and
the House with No Bills project, which we started work on last year.
House with No Bills becomes concrete
After announcing our concept for a house with no bills last year, we are happy that this concept is now close to delivery. Over the past 12 months, we secured key partnerships with specialist providers, including Evergen (Solar PV, Batteries and Intelligent controls) and Schneider (home automation and metering). Construction began on the house in August 2017, and we anticipate the selected family will be living there by 2018.
Our initial residential solar power battery storage pilot, conducted in collaboration with specialist partner, Evergen has offered key learnings about installation and set-up, and confirmed that batteries are certainly worth pursuing. We plan to offer batteries as an upgrade option in all of our masterplanned community homes, and are working through our innovation program, Hatch, to understand the best ways in which we can also offer them to customers buying apartments.
Protecting and improving biodiversity is an integral part of reimagining urban life, which we have continued to progress which our initiatives this year. Through landscaping, native species and habitat protection, and tree planting we’re working to leave a positive and lasting legacy in the areas where we operate – particularly in locations that are adjacent to protected or sensitive ecosystems.
Developed last year, our first bio-matrix has now been piloted on nine residential projects nationally, enabling us to measure the biodiversity at these sites before and after development. We have also created biodiversity plans at 23 assets this year to help understand biodiversity at the local level and identify actions to improve on the current status.
For example we installed an individual asset level can be showcased by the recent work to install an interior green wall at the Broadway Shopping Centre, Sydney. As well as its obvious aesthetic appeal, this green wall delivers great environmental benefits, improving air quality by absorbing pollutants and releasing oxygen creating a healthier place to work and play. Located right in the heart of the centre, it’s a great illustration of how improving biodiversity can positively affect the customer experience in even the most unexpected context.
Situated in the leafy suburb of Pimpana in south-east Queensland, Mirvac’s masterplanned community, Gainsborough Greens, gave opportunity to create a series of vibrant and distinctive landscaped villages, interspersed by recreational areas and green space.
We sourced fill (low grade soil) from a nearby empty paddock that had been degraded by previous grazing activity, and worked with ecological habitat experts to completely rehabilitate the 50 hectare area.
By using an innovative direct seeding planting technique, instead of traditional tube stock planting, we were able to rehabilitate the site more quickly and cost efficiently, while introducing more diversity from the beginning which has proved beneficial.
In just 18 months, our rehabilitated site evolved into a large thriving wetland community, home to 34 native plant species. Fed by shallow lagoons, the site continues to evolve, with no need for irrigation, fertilisers, herbicides or pesticides.
We even witnessed a breeding pair of painted snipes (an endangered species listed by the International Union for the Conservation of Nature) which is a fantastic outcome for Mirvac and the local community.
Importantly, since rehabilitation began, the site has been subject to both severe flooding and drought conditions, and has responded with a very high degree of resilience thanks in part to replacing the introduced grasses with native species and the creation of the wetlands. An outstanding achievement by our team, we are now transferring the site to its local council as a conservation area.