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Boral has tapped Mirvac to transform its Melbourne quarry into a $1 billion suburb.
Mirvac will manage the urban development of the Boral-owned 171-hectare site in Wantirna South, Victoria, over a multi-decade period, including a proposed new housing community and substantial new parklands.
If Mirvac receives the necessary approvals the site is expected to have a $1 billion end development value.
Boral expects to receive around $66 million in earnings through FY2026 from the development, including $3 million in FY19.
Significant earnings are expected to be generated through the project's lifespan; Mirvac expects the entire development to be completed by 2035, with Boral receiving in excess of $300 million over the life of the project.
The site in Wantirna South, also known as the Scoresby site, was formerly a manufacturing plant for Boral Bricks in Victoria.
Following a divestment of Boral's 40 per cent interest in the Boral CSR Bricks joint venture to CSR Limited in November 2016, Boral retained ownership of the quarry site, with part of it still leased to CSR.
Boral's CEO and managing director Mike Kane says the company is excited to work on the rehabilitation and development of the site with Mirvac.
"We are pleased to be working with Mirvac on another development project, following an extensive market testing process, which confirmed the strong alignment between our two organisations," says Kane.
"The Scoresby development will be a significant value-contributor for both Boral and Mirvac, as well as the local community in Melbourne's south eastern suburbs."
The Scoresby site is the second partnership between Broal and Mirvac, with the latter managing Boral's Donnybrook development currently.
Boral says the two developments are expected to deliver in excess of $500 million in proceeds.
Kane says Boral is looking at opportunities for the use of other properties.
"We also have potential property end-use opportunities at Warun Ponds and Penrith Lakes in the pipeline, which in coming years should contribute to the sustainable earnings stream we continue to generate from our property assets," says Kane.
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