MGR is one of Australia’s major apartment developers, with significant exposure to residential communities and a diversified portfolio of office, industrial and retail investment properties. Yesterday’s story in the Australian Financial Review (AFR) around the NSW Labour Party going to war with councils as the cost to build an apartment in Sydney exceeds $1mn, making projects not feasible for developers, sums up some of the issues for companies like MGR – as we’ve highlighted before, national data shows it’s now 50% slower to build apartments today than a decade ago, both embarrassing and frustrating in our opinion.
- Again, if interest rates are peaking and the Govt. is going to move to improve housing supply, MGR is very well positioned.
Mirvac is one of the ASX’s most interest rate-sensitive property stocks, with higher rates increasing funding costs, placing downward pressure on commercial property valuations and reducing housing affordability, which hurts volumes. This sensitivity was evident in late 2025, when the stock fell heavily as markets repriced a more hawkish RBA outlook. Conversely, lower interest rates provide a powerful tailwind by reducing financing costs, supporting asset valuations and improving residential demand.
We covered the company’s Q3 trading update in April here, and as we did at the time, we still like the stock at current levels, supported by its ~6% unfranked yield.
- We can see MGR trading back above $2 if/when credit markets embrace a more dovish perspective.
MM is long and bullish towards MGR
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