Mirvac Group Placement - Past Deals Did Not Hold up Well

Charter Hall Long WALE REIT Placement - Neither Here nor There

Charter Hall Long WALE REIT Placement - A Little More Positive on This, Index Inclusion Should Help

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

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Morningstar, Inc.

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Equity Bottom-Up

In this note, we critique the earnings outlook and risks of each of Mirvac’s activities (office, retail, industrial, residential/commercial development, and funds management), valuing each under five scenarios using a sum-of-the parts approach.At current levels, we consider other property firms to offer a superior risk-reward profile. The key issue we have with Mirvac is its capital allocation, with the firm having significant capital allocated to sectors where we see little scope to generate superior through-the cycle returns; this is one reason why we do not assign the firm a narrow economic moat rating. Analyst: Tony Sherlock

In this note, we critique the earnings outlook and risks of each of Mirvac’s activities (office, retail, industrial, residential/commercial development, and funds management), valuing each under five scenarios using a sum-of-the parts approach.At current levels, we consider other property firms to offer a superior risk-reward profile. The key issue we have with Mirvac is its capital allocation, with the firm having significant capital allocated to sectors where we see little scope to generate superior through-the cycle returns; this is one reason why we do not assign the firm a narrow economic moat rating.  Analyst: Tony Sherlock

Whether to Own Mirvac Depends on View on Australian Residential