Concerns were raised during Mirvac’s annual general meeting on Thursday but did not stop shareholders to strongly support the firm’s remuneration report and long-term performance plan.
According to The Australian Financial Review
, shareholder apprehension over apartment settlement risk and house prices “dominated” the AGM where the firm’s strategies were also challenged.
Nonetheless, shareholders approved the firm’s remuneration report, chief executive Susan Lloyd-Hurwitz’s long-term performance plan and the re-election of chairman John Mulcahy.
The default rate seen by the firm for its most recent year, higher than its usual 1%, was raised by shareholders and addressed by the firm during the meeting.
“In regard to the settlement of our existing pre-sold lots to foreign buyers, we are experiencing delays of around one to two months as customers find alternate sources of finance,” Mulcahy said, according to the AFR
’s Su-Lin Tan.
“We have had just a handful of foreign buyer apartment defaults to date, and pleasingly, all defaulted lots marketed for sale have been resold,” Mulcahy added.
The firm also noted that it takes a 10% deposit from buyers which is kept when the company resells apartments. Mulcahy also stressed that their default rate is historically low.
“Even in the global financial crisis, we only had 3% [defaults],” Mulcahy said.
Furthermore, the firm has also limited pre-sales to foreign buyers and set aside provisions for defaults, AFR
reported. The firm also has an upbeat long-term outlook despite some correction in Sydney and Melbourne apartment prices.
Mirvac said it is not restocking in Brisbane and is prepared for residential property prices just sustain. The firm’s leadership also said they will only consider good locations in Melbourne and Sydney for future developments.