Mirvac gives Hanan the keys to the CEO office

“I am truly humbled and excited to be given the opportunity to lead Mirvac,” Hanan said. “Sue is handing over the business in a strong position, with a clear strategy, a portfolio of leading assets and a high performing culture.”

But it will be a bumpy ride. The group reported a fall in residential sales in its September quarter update on Wednesday, the developer selling just 415 lots in the September quarter, down on 902 for the same quarter last year

Lloyd-Hurwitz said the results were not unexpected given concern among home buyers about rising interest rates and the economic outlook. She had forecast a slowdown in home settlements at the full-year results in August.

“With an uncertain economic environment and tenants, and capital becoming increasingly selective, our modern, sustainable portfolio characteristics and robust balance sheet position us well to manage through the cycle,” Lloyd-Hurwitz said.

“Across residential, sales activity has slowed from its peak 18 months ago, particularly in MPC, and weather is impacting our planned production timelines.”

The office sector showed resilience, with occupancy at 96 per cent, and leasing deals were signed across about 13,700 square metres. The group also earmarked close to $1 billion in asset sales, including the Met Centre and 60 Margaret Street in Sydney and 367 Collins Street, Melbourne.

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Rival Dexus also published its September quarter update on Wednesday, saying the office market was showing signs of a recovery with occupancy at 95.6 per cent and rent collections at 98.6 per cent.

Dexus chief executive Darren Steinberg said leasing conditions had shown some signs of improvement over the quarter.

“Flight to quality remains a key theme,” he said, “and many customers continue to upgrade and centralise their occupancy.

“Net absorption has been higher for prime grade stock than secondary stock for the past six quarters.”

Dexus, with an ASX market value of $8.3 billion, is the country’s largest office landlord. During the year it acquired AMP Limited’s real estate and domestic infrastructure equity business, boosting its funds under management to $44.3 billion.

For the retail sector, the country’s second-largest mall owner, Vicinity, said in its September quarter update that sales were strong coming into the busy Christmas sales period. For the three months, sales were up 21.2 per cent on the September 2019 quarter, before the COVID pandemic, when lockdowns affected results.

The drivers were apparel and footwear, Vicinity’s largest specialty category, while visitation continued to recover to 92 per cent of pre-COVID levels, notwithstanding quieter assets in the CBD.

Vicinity owns and manages $24 billion in retail assets under management across 60 shopping centres and has a market value of $8.5 billion. Its largest asset is the co-owned Chadstone shopping centre in Melbourne’s south-east, with a new office tower, Chatswood in Sydney’s north and malls in Sydney’s city.

Vicinity chief executive Grant Kelley said the first quarter operating metrics reflected continued positive momentum in the 2022 year and ongoing resilience in the retail sector.

He said the development of Chadstone’s new entertaining and dining precinct, The Social Quarter, remained on track for a summer opening this year, and construction of the One Middle Road office tower and fresh food and dining precinct had begun.

“While the macroeconomic outlook remains uncertain, consumer demand and retailer confidence remain strong, as demonstrated by the leasing performance for the quarter,” Kelley said.

“While we are yet to see the full impact of recent consecutive interest rate hikes on consumer spending, we continue to be cautiously optimistic of a soft landing for the Australian economy, given the strong employment market as well as household income growth and savings rates remain in line with historical averages.”