Mirvac will focus on expanding its residential developments after this week announcing it has entered into a project delivery agreement to develop a master-planned community site in Marsden Park North, Sydney.
The agreement is subject to several conditions, including rezoning of the landholding within the next three years and a minimum net developable area.
Located in Sydney's North-West growth centre, the site, which is about 153 hectares, is zoned rural residential and was released for planning under the NSW Government's Precinct Acceleration Protocol in June 2014.
The group has also entered into an agreement with PwC, for office space at its proposed development, 2 Riverside Quay, Melbourne, in the heart of Melbourne's Southbank precinct.
PwC has committed to about 17,200 square metres over 10 levels, or about 82 per cent of the total lettable office area, for an initial term of 12 years.
The development at Riverside Quay will see the construction of a 21-level commercial office tower, which will include the existing eight-storey car park.
Speaking at the group's annual general meeting in Sydney on Thursday, chairman John Mulcahy said the primary driver of the housing boom was supply led not demand led.
"From an operations perspective, we have received queries regarding the residential market, and in particular the recent focus on foreign investors and whether we are experiencing a 'housing bubble', " he said.
"While we agree the level of activity in the sector has increased, and pricing has improved in certain geographies, we believe the primary driver of this is the fundamental undersupply of housing across the country.
"In relation to foreign investors, we continue to see demand from offshore buyers, particularly for apartment projects located in our major cities. For the 2014 financial year, foreign buyers comprised 11 per cent of all settlements."
Mr Mulcahy said the percentage of total investors, foreign and domestic, versus owner occupiers is slightly greater than 50 per cent in apartments.
"This is at the top end of our historical band, however, we would need to see this reach much higher levels to suggest a bubble."
The group chief executive, Susan Lloyd-Hurwitz, reaffirmed operating earnings guidance of 12.0 to 12.3 cents per stapled security, and a full year distribution guidance remains at 9.2 to 9.4 cents per stapled security.
"Within our residential business, we settled almost 2500 lots last financial year, ahead of our revised 2014 target, and we are on track to settle 2200 lots in 2015," Ms Lloyd-Hurwitz said.
"We've already made a good start, with around 600 lots settled year to date, and we have maintained strong sales activity with $1.2 billion of exchanged pre-sales contracts as at 30 September. This positions us well for the balance of 2015."
During the year, Mirvac has acquired over $600 million of strategic assets, across retail, industrial and office and also undertook over $1 billion of strategic divestments.
