The diversified Australian property business is exposed in multiple areas from Industrial, Office, Residential & Retail making it a play on the broader space as opposed to picking the eyes out of one specific area, which is generally our preference – i.e. when office is oversold, we buy a pure-play office REIT, or we like Self Storage assets, so we buy a pure-play self-storage operator.
In terms of commentary on their residential property business at their recent results, MGR said “Momentum in the residential business remains sluggish and margins tight.” and while this should improve noticeably over the coming years, it does highlight how tough it remains for developers of new residential real estate in this country.
MGR is a good operator, well positioned in the space that will benefit from lower interest rates and a building boom through 2024/5.
- While we are positive on property generally, and Mirvac specifically, but we usually prefer to target more specialised operators.
