Mirvac has reaffirmed its guidance for earnings to grow by six to eight per cent in the current financial year after maintaining solid metrics in its major portfolios in the first quarter.

Operating earnings per share is expected to be 15.3 to 15.6 cents per stapled security, the property developer confirmed, while distribution is likely to increase six per cent to 11 cents per security.

The company has maintained strong occupancy levels in its office and industrial portfolios, with tenant demand continuing to be strong, particularly in Sydney and Melbourne.

It also has retained strong occupancy levels in retail despite uncertainty in the sector and sales have grown, chief executive Susan Lloyd-Hurwitz says.

“Mirvac’s retail portfolio continued to perform well during the quarter, despite headwinds facing the retail sector,” she said.

“The solid metrics we’ve achieved, such as high occupancy, strong sales – including specialty sales growth of 6.0 per cent – increased sales productivity and steady leasing activity, are underpinned by our urban-focused strategy.”

Mirvac’s retail highlights for the quarter included strong occupancy maintained at 99.4 per cent; solid comparable MAT sales growth of 4.2 per cent, with specialty MAT growth of 6.0 per cent; maintained strong comparable specialty sales productivity at $9,944 per square metre, with specialty occupancy costs of 14.9 per cent; and executed 85 lease deals across approximately 14,580 square metres, with leasing spreads remaining positive.

Mirvac also acquired a 50.1 per cent interest in East Village, Zetland for a total consideration of $155.3 million, following the purchase of a 49.9 per cent interest in July 2016.

Residential conditions continue to be mixed, with price growth in Sydney easing after a long period of above-average gains, but price growth in Melbourne remaining elevated.

“Our ability to accelerate releases in positive market conditions means we have a high-quality pipeline with strong embedded margins, which supports our residential earnings outlook,” Ms Lloyd-Hurwitz said.

Residential sales activity is expected to remain solid in the current financial year, but 80 to 90 per cent of expected residential earnings will be skewed to the second half of year, Mirvac said.

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