S&P/ASX 200 Index (ASX: XJO) real estate stock Mirvac Group (ASX: MGR) is in the green so far in 2025, with shares up 2.7% year to date.
Over the past full year, however, shares in the diversified property developer and investor have underperformed the benchmark, sliding by 6.6%. That compares to a 12.4% gain posted by the ASX 200 over this same period.
However, this doesn't include the 10.5 cents a share in unfranked dividends the company declared in 2024.
As you can see on the chart above, December was a tough month for stockholders, with Mirvac shares tumbling 13.0%.
That result was disappointing for Wilson Asset Management. In its December investment portfolio update, WAM noted that Mirvac detracted from WAM Leaders Ltd (ASX: WLE) performance during the month.
Despite its underperformance in December, WAM remains optimistic about the outlook for the ASX 200 real estate stock.
Here's why.
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Brighter skies ahead for this ASX 200 real estate stock
WAM noted that the headwinds hitting Mirvac shares in December reflected "broader challenges faced by the real estate investment trusts sector".
The fund manager said, "Rising bond yields weighed heavily on the sector, with the US government 10-year treasury bond yield climbing 0.4% during the month. Mirvac, with its dual exposure to residential and office markets, was particularly affected."
Regardless of those headwinds, WAM said it maintained a positive outlook for the ASX 200 real estate stock.
The fund manager said:
Residential margins appear to have stabilised, supported by the strong performance of new project launches. Progress on its asset sale program has been strong and office valuations have reached their trough.
At current levels, Mirvac's valuation screens as compelling, offering upside potential for the long term.
What's the latest from Mirvac?
Mirvac released its first quarter results (Q1 FY 2025) on 22 October.
Offering some insight into what's ahead, the ASX 200 real estate stock reaffirmed its operating earnings per share (EPS) guidance of 12.0 to 12.3 cents in FY 2025. Mirvac expects to pay out full-year dividends of 9.0 cents per share.
Management noted that this guidance was subject to the completion of Mirvac's core strategic priorities, including achieving 2,000 to 2,500 residential lot settlements, executing $500 million in non-core asset sales, and securing capital partners at its key development projects.
Commenting on the outlook for the ASX 200 real estate stock, Mirvac CEO Campbell Hanan said at the time:
We have a clear strategy in place, and we continue to focus on leveraging our unique asset creation capability to maintain our leadership in the living sectors and enhance our cash flow resilient investment portfolio.
It is encouraging to see the momentum building across the business, with multiple levers for growth into the future.
