I would like to hand the conference over to your first speaker today, Ms. Susan Lloyd-Hurwitz, CEO and Managing Director. Please go ahead.
Thank you and w elcome to our FY 2021 results presentation. I'm joining you from the lands of the Darug people of the Eora Nation and pay my respects to elders past and present right around the country, wherever you are today, lockdown or not. As we're working remotely here in Sydney, we've gone with the least risky remote presentation method this morning, a good old-fashioned phone call and a webcast of the slides. We look forward to meeting with many of you virtually in the coming days and truly look forward to meeting in person next time. With me on the call today are Courtenay Smith, Brett Draffen, Campbell Hanan, and Stuart Penklis. We've got a lot to get through so let's go.
Our resolutely urban strategy continues to evolve. It seems clear that trends that were trends before COVID have been turbocharged: work from anywhere, rapid digitization, online shopping, retail as an experience, demand for logistics space, and a focus on sustainability, health, and wellbeing. Citizens have elevated expectations around communities and places. We were well-placed before COVID to respond to these trends, and are even more so now, aspiring to be a leading creator and curator of extraordinary places and experiences to make life better for millions of people in Australia. ESG is at the heart of everything we do through our This Changes Everything strategy, which we've been running since 2014. We've been heartened by the significant increase in ESG-related meetings with our investors over the past few years and look forward to more engagement. There's obviously way too much here for me to get into today.
The summary is we continue to have very ambitious goals and we are well on our way to meeting them. I'd like to call out a couple of highlights. We have a goal to be net positive carbon by 2030 and we already have achieved an 80% reduction in our carbon footprint. During the year, we launched our second reconciliation action plan, including confirmation of our support for the Uluru Statement from the Heart. We also released our first modern slavery report. We were pleased to be ranked third for ESG in property out of a survey of 1,400 companies in the Asia ex- China Institutional Investor Survey. We drove Mirvac forward with significant momentum over the last year, exceeding earnings guidance and positioning us for future growth, despite all the challenges COVID continues to throw at us all as a society and as individuals.
Our statutory profit is up 61%, operating cash flow up 41%, DPS up 9%, AUM is up 8%, NTA up 5%, and ROE increased by 200 basis points. We undertook multiple transactions, selling AUD 840 million of non-core assets, 22% ahead of book, including Australia's largest hotel transaction. We also facilitated the purchase of 49.9% interest in 200 George Street by inline capital partner, which was Australia's largest office transaction for the year. In July, we formed a new partnership to manage a portfolio of Sunsuper's real estate assets and sold a 49% interest in the Locomotive Workshops to this partner. Our average debt cost reduced to 3.4%, and our future development pipeline grew by 18%.
We responded to strong residential conditions and increased releases by 117%, achieved our best sales level in over five years with sales up 83%, and we comfortably exceeded our settlement target with 2,562 lots settled. Most importantly, throughout all the challenges of constantly changing rules, lockdowns, isolation, mental health challenges, and homeschooling, we have kept our focus on doing our very best to care for our people and our customers. As you would expect, we've been unwavering in our commitments to sustainability, innovation, safety, and diversity. This considerable momentum is set to continue into our 50th year with our risks well managed. I pay tribute to the founders of Mirvac, Bob Hamilton and Henry Pollack, and we look forward to honoring them in our 50th year reflections.
As we move into FY 2022, you can expect us to continue to execute on our core competencies, creating new high-quality assets, curating those assets through customer experience and management, moving our residential business forward, and growing our third-party capital under management. We will continue to respond to favorable capital market conditions and recycle non-core assets, with capital release being recycled into funding the next wave of value-accretive projects. Most importantly, we have a clear runway for future growth. Our secured pipeline is AUD 28 billion across all sectors of the business. Some of this is going to take some time to play out, but in the near term, we hold AUD 1.2 billion of residential pre-sales and expect to release over 2,700 lots in FY 2022, including seven apartment buildings.
Visibility for FY 2022 is exceptional, with over 90% of residential EBIT secured and substantial commercial development profit from 80 Ann Street and Locomotive Workshops locked in. This is all part of our journey. We have shifted from being a predominantly residential developer to demonstrating our award-winning capability as a top-tier commercial developer. Now we are aspiring to be a leading creator and curator of extraordinary urban places. Our asset creation capability delivers four benefits for security holders: development profit, new recurring high-quality income, asset and fund management fees, and valuation uplift. Over the past six years, this flywheel has delivered development profit of AUD 368 million, new recurring high-quality income of AUD 113 million per annum, asset and funds management fees of AUD 30 million per annum, and development revaluation gain of AUD 518 million.
Before I hand to Courtenay, I'd like to underscore our commitment to culture. Employee engagement is the single most important predictor of company performance. Regular pulse checks over the year confirm that our engagement remains high, and more importantly, reveal areas we could work on. We are extremely focused on our people, HSC, diversity, innovation, and aspiring to be a force for good even when we don't get it quite right. I'm especially proud that we were ranked number two globally for gender equity, according to Equileap, for the second year in a row, and that we were named AFR BOSS Most Innovative Companies in the property sector also for the second year in a row. There is so much more that we can do, and we'll keep working on it. Now, I'd like to hand to Courtenay to discuss the financial results.
Thanks, Sue. Good morning, everyone. As a relative newcomer, it's clear to me that the people at Mirvac are passionate and truly believe in Mirvac's purpose to reimagine urban life. I'm particularly impressed by the commitment and dedication of everyone I've met within the business to date. I'm excited to have joined the Mirvac team and look forward to being part of Mirvac's continuing success. It's a pleasure today to be delivering these financial results. Today, we report an operating profit after tax of AUD 550 million, a statutory profit after tax of AUD 901 million, earnings per share of AUD 0.14, and distributions per share of AUD 0.099.
As market sentiment and conditions have progressively improved over the last year, the business has built considerable earnings momentum, particularly in the last six months, with the result being delivered today exceeding the earnings guidance provided in February this year, as well as the upgraded guidance provided in April as part of our Q3 operational update. In addition to this strong earnings outcome, operating cash flows of AUD 635 million are materially higher in FY 2021, with growth of 41%, and NTA increasing by 5%, overall delivering a 7.2% return on invested capital. The key performance drivers of this result include in our integrated investment portfolio, better cash collections with reduced rental relief, a nd an increase in operating income, principally from the completion of our newest asset, Olderfleet in Melbourne and South Eveleigh in Sydney.
We saw an uplift in value of AUD 274 million in our investment portfolio, reflecting the quality of the portfolio. We finished the year with 100% of our aged arrears covered by our ECL provision. Commercial and mixed-use earnings were driven by development profit recognition relating to Olderfleet, South Eveleigh, as well as 80 Ann Street in Brisbane, which is now 81% pre-committed and on track to reach practical completion in late FY 2022. In residential, we've experienced strong sales and settlements during FY 2021, with sales up 83% and settlements of 2,526 lots, comfortably exceeding our guidance of greater than 2,200 lots. Our residential growth margins were elevated at 26%, driven by the higher weighting towards higher-margin MPC projects.
Whilst we are cautious given the current circumstances, with an expectation of markets opening toward the end of this calendar year, we are confident that this momentum will continue into FY 2022 and beyond, reflecting the strength of the platform. Moving to the status of our rent collection, we have made good progress through the year with 89% of tenant relief requests resolved. The FY 2021 result includes an AUD 20 million negative impact on NOI relating to the resolution of those tenant requests. In FY 2020, the total equivalent COVID impact was a negative AUD 48 million. As business conditions improved during the year, cash collection rates improved each quarter, with an overall cash collection outcome of 98% of net billings. The impact of COVID has effectively been contained to retail, which represents only 27% of our NOI.
Despite the challenges in the retail sector, our cash collections reached 94% of net billings by the end of the year. At 30 June, aged arrears stood at AUD 32 million, mainly in retail, and 100% of these arrears are covered by our ECL provision. While we are monitoring the impact of the latest lockdowns, we believe we are appropriately positioned, benefiting from having a strong track record of managing relationships with our tenants. Turning now to the detail of the FY 2021 result. Investment EBIT of AUD 576 million is a 6% growth from the prior year, largely driven by a 5% increase in net operating income following the completion of Olderfleet and South Eveleigh earlier in the year, improved cash collections, plus lower COVID relief. The overall development EBIT of AUD 201 million is lower in FY 2021 by 32%.
Commercial and mixed-use development earnings include contributions from the completion of Olderfleet and South Eveleigh, as well as profit recognized on 80 Ann Street. Given they completed earlier in this financial year, contributions from Olderfleet and South Eveleigh are lower in FY 2021 compared to FY 2020. In residential, notwithstanding the number of lots settled in FY 2021 being similar to FY 2020, the earnings contribution in FY 2021 is lower due to 82% of lots settled being MPC lots, which have higher margins but a lower profit contribution compared to FY 2020, which was made up of a greater percentage of apartment settlements, which have a higher profit contribution. Unallocated overheads reflect the overheads within the group, which are not directly incurred by or allocated to a business unit.
These overheads, whilst increased materially when compared to FY 2020, have actually started to normalize, and t his has been driven by four factors. Firstly, FY 2020 did not include short-term incentive payments, with AUD 14 million included in FY 2021. Secondly, in FY 2020, Mirvac received the benefit of AUD 9 million in JobKeeper payments, with no benefit recognized in FY 2021, following our decision to repay all JobKeeper payments received in FY 2021 in March this year. Thirdly, as was highlighted at the half year, insurance costs across the market have risen materially in FY 2021, and M irvac has not been immune from these increases. Finally, FY 2021 includes a AUD 7 million increased expense relating to software as a service or SaaS implementation costs due to a change in accounting for these types of costs. Overall, operating profit is 9% lower in FY 2021.
However, statutory profit has increased by 61%, driven mainly by an AUD 395 million gain in property revaluations across the portfolio, made up of an AUD 121 million development gain and a net uplift of AUD 274 million across our investment property portfolio. Operating cash flows in FY 2021 are strong at AUD 635 million, which represents a 41% increase compared to FY 2020, driven by the capitalization of Olderfleet at 477 Collins Street, a nd improved cash collection rates within our investment portfolio. FY 2021 distributions are comfortably funded from both operating earnings and adjusted funds from operations, with a 71% and 88% payout ratio on each respectively. Heading into FY 2022 and beyond, we expect future distributions and distribution growth will continue to be funded by recurring passive income as our development pipeline is completed.
Mirvac remains in a strong capital position, and our capital management strategy continues to focus on diversifying our capital sources, increasing long-term debt and limiting debt expiries in any one year. Our 6.6 year average debt maturity profile, without significant debt maturities until FY 2023, support our solid and stable balance sheet position. Gearing of 22.8% remains at the low end of our preferred 20% to 30% range. Our credit rating remains unchanged from A3 Moody's and A- Fitch rating, and we have AUD 867 million in cash and undrawn debt facilities to provide financial headroom and flexibility. With that, I'll now hand over to Brett.
Thanks, Courtenay, and good morning. Despite the ongoing volatility post-COVID, FY 2021 has witnessed a strong year with disciplined allocation of capital against our strategy and excellent momentum into future years. A strategy that leverages our asset creation capabilities to generate strong returns and long-term value focused on the urbanization of key Australian gateway cities. We believe major cities and urban environments will continue to remain Australia's foundation for economic growth, wealth creation, and innovation, driven in part by the proximity to deep, skilled talent pools and high levels of livability, including the abundance of physical and social infrastructure. Despite the headwinds of COVID, our FY 2021 ROIC has increased 200 basis points to 7.2%, above our average cost of capital. COVID impacts have largely been isolated to our retail portfolio, clearly there has been tailwinds in industrial and residential supporting our diversified portfolio stance.
Our integrated investment portfolio has grown on the back of project completions to AUD 12.7 billion, with a continued focus on modern, long WALE, low CapEx office and accelerating Sydney-focused industrial exposure, a committed rollout of our BTR pipeline, and a focused urban retail strategy. Within our development activities, our capital base has increased to AUD 2 billion, as we've accelerated deployment to strong residential markets and advanced key commercial, industrial, and mixed-use projects while maintaining a disciplined stance on restocking. With a strong pipeline of new project completions, we have continued to optimize our portfolio allocation strategies with disposals completed or planned for some AUD 600 million of non-core assets across secondary office, retail and hotels, with completed transactions secured at an attractive premium to book value.
Mirvac has long had a strategy of investing alongside aligned capital partners, either through joint venture or co-ownership. Over more recent years, we've accelerated our third-party capital strategies to grow external assets under management and recurring funds management earnings. Funds under management have grown at an average of 23% since FY 2015. However, more recently, has seen strong acceleration with improved resourcing and capabilities, significant transactions, and growing external mandates to match the momentum of opportunities within our business. FY 2021 has witnessed some strong outcomes, including securing a new partnership with leading Australian superannuation fund, Sunsuper, which now includes the sale of a 49% interest in the Locomotive Workshops. In the largest office transaction this year, we utilized our preemptive rights on the Mirvac-developed 200 George Street to secure a 49.9% stake for an aligned capital partner, whilst retaining our existing 50% ownership, which increased in value by 11%.
Mirvac's secured development pipeline provides a platform to grow the size and quality of our own balance sheet, but equally provides future opportunities for our capital partners, as we continue to grow our funds under management into FY 2022 and beyond. At the half year, we outlined a restructure which included the creation of the commercial and mixed-use development division to better focus on large-scale commercial and mixed-use precincts that shape and define our future cities. Importantly, this division does not operate as a silo, fully leveraging Mirvac's sector leading skill sets, including new business, design, residential, construction, leasing, and asset management capabilities. Courtenay has already outlined the EBIT results for FY 2021. It should be remembered that EBIT is only a partial representation of the true return generated from our asset creation capabilities. EBIT is recognized on the portion of project interest sold to capital partners.
However, this measure does not reflect the revaluation gain for the interest retained within our integrated investment portfolio. Combined, the total return achieved in FY 2021 is AUD 154 million, representing an improvement of 15% on FY 2020. Looking to FY 2022, EBIT is expected to significantly increase on the back of the completion and sale of the Locomotive Workshop, which is now settled, and the completion of 80 Ann Street in the second half, again, already de-risked with the sale of the 50% interest to M&G. Likewise, the future pipeline includes our well-advanced Sydney industrial projects, 55 Pitt Street, and the recent progress at Harbourside, which provides strong momentum to sustain strong earnings into FY 2023 and beyond. Mirvac continues to demonstrate its credit credentials when it comes to large-scale city-defining precincts with the upcoming completion of the last building in their multi-award-winning South Eveleigh.
Likewise, we were one of the leaders in the establishment of the City of Sydney's vision for the Circular Quay precinct in Sydney with the completion of the EY Center at 200 George Street in 2016. Much activity is now underway to add to this precinct, and it is pleasing to see that our 55 Pitt Street development will add to this precinct, having advanced through the design competition phase. DA is now lodged for demolition and main works, and vacant possession notice is issued to enable the buildings to be vacated at the end of this calendar year. Testimony to our development capabilities, our team has secured additional development rights and advanced the design concept to achieve a significant uplift in NLA, with the current scheme now reflecting an approximately 50% uplift to the original concepts. We are yet to announce timing for the commencement of construction.
However, we will balance the current low occupancy with leasing momentum and the favorable feasibility outcomes associated with the age of ownership, NLA uplift, cap rate compression, and capital partner demand that will see this project not only being a valuable addition to the Sydney skyline, but also a significant EBIT and total return contributor for the group. It is worth reflecting on the groundbreaking South Eveleigh precinct, which has created a AUD 1.8 billion collection of assets, and again, showcased Mirvac's development capabilities to create a low-rise, campus-style collaborative workspace in a mixed-use precinct that includes world-class adaptive reuse of heritage buildings, and an indigenous partnership for the creation and management of cultural landscapes. The Locomotive Workshop building is in its final stages and features the creation of a 31,000 sq m ground scraper within the 1880s built heritage-listed former Locomotive Workshop building.
As previously mentioned, we have last week settled the sale of a 49% interest to our capital partner, Sunsuper, for approximately AUD 231 million, reflecting a cap rate of 4.7%. Earnings will be fully realized in the first half of 2022, again, evidence of the momentum already secured for the balance of the year. Mirvac enters FY 2022 with a full pipeline of development opportunities with an end value of AUD 28 billion. This is the strongest combination of quality projects across multiple asset classes I have personally seen in my time at Mirvac, which c ombined with our new business opportunities, gives us great confidence that we can continue to deliver strong embedded margins, sustainable earnings, and attractive total returns. On that note, I'll hand to Campbell to discuss the integrated investment portfolio.
Thanks, Brett, and g ood morning. The integrated investment portfolio was created last October as an amalgamation of all the recurring income businesses within Mirvac, including office, retail, industrial, and build-to-rent. The new structure retains our sector specialization. However, the underlying operations have been redesigned into an integrated cross-discipline service team focused on standardization of process and reporting, a single view of customer and utilization of our scale to procure and service our customers in a more consistent and efficient way. This has delivered immediate benefits to the group, whether it be the centralized team focused on cash collection, the seamless rollout of facility services to our first build-to-rent asset, or the cost benefit of removing duplication, which led to an improvement in our operating costs.
The impact of COVID, whilst significant in the first half, recovered dramatically in the second half. The retail portfolio carried almost all of this burden with a AUD 20 million impact from more than 1,200 rent relief requests. The subsequent leasing activity, together with significant improvement in cash collection during the second half, has helped secure a 5% increase in our NOI over the prior period. I'm particularly proud of our team's ability to drive our cash collection to 98% of billings on a net basis, driven by our retail collections, which finished the year at 94%. This year has really demonstrated the benefit of our office strategy. Modern, long WALE, low CapEx assets have delivered resilient NOI and capital growth. We continue to enjoy the benefits of our long WALE with expiries limited to a maximum of 8% per annum for the next three years.
This number will continue to fall as we complete the 80 Ann Street and Locomotive Workshop developments during the next 12 months. Key highlights for the year include, NOI was up 5% to AUD 366 million, led by a 20% increase in like-for-like income, and the rental contributions from The Foundry at South Eveleigh in Sydney and Olderfleet in Melbourne. Occupancy has held up well at 95.5% and remains well above the markets we trade in. Interestingly, 80% of our current vacancy resides in buildings built before the year 2000, and demonstrating the resilience of our portfolio in the face of soft market conditions. 55% of the portfolio was externally valued during the year, delivering net gains of AUD 277 million, up 3.8%. Maintenance CapEx remains low at AUD 32 million, and our WALE remains high at 6.3 years by income.
Leasing activity improved in the second half with approximately 41,500 sq m of deals completed for the year, and g reat progress was made at Locomotive Workshop, which is now 97% pre-leased, up from 72%. At 80 Ann Street in Brisbane, pre-commitments are now at 81% to 73%, with strong interest in the remaining space. Looking forward, our limited lease expire exposure over the next three years will continue to drive our performance as the market deals with the challenges of higher vacancy and higher tenant incentives. Whilst we've been espousing the benefits of a modern office portfolio with long WALE and low CapEx for many years, we're now seeing the financial benefits of this strategy, with the Mirvac office portfolio outperforming the Australian office benchmark.
These results are an endorsement of our strategy, and you should expect to see us continue with the sale of older assets to help fund the next office developments in our substantial pipeline. Our retail business has weathered a challenging environment with consistent improvements in cash collection, foot traffic, and sales over the period. In June, with the exception of our CBD assets, our monthly sales results almost returned to pre-COVID levels. Whilst lockdown post-June is likely to impact FY 2022 NOI, we have made adequate provisions through the ECL and our forecast NOI assumptions, and do take some comfort knowing the sector is capable of rebounding relatively quickly in a post-lockdown trading environment. Turning to our operational results, NOI was up 11% to AUD 157 million on a PCP basis, demonstrating improving conditions over the course of the year, and the recovery in cash collection.
Occupancy remains strong at 98%, and leasing volumes improved, albeit at lower rental levels. A 100% of the retail portfolio has now been externally revalued since COVID, with valuation stabilizing in the second half to be down AUD 12.7 million or 0.4% for the year. Our asset allocation philosophy remains unchanged. We retain our view that high-quality assets in densely located inner urban catchments that deliver bespoke offerings for loyal local communities will outperform in the longer term. Albeit, we acknowledge the speed of return of office workers, tourists, and students will be a key influencer in our performance in the shorter term. We have taken advantage of the convenience-based, hyperlocal retail trend by selling Cherrybrook Village for a significant 43% premium to book value, and we will look to dispose another of our convenience-based assets, Tramsheds, this financial year.
Turning to the industrial business, this asset class continues to be a beneficiary of the economic tailwinds in the form of growing online retail sales, automation, and the buildup in inventories. Capital continues to chase this sector, with cap rates tightening considerably over the course of the year. Key highlights include, NOI was up 4% to AUD 56 million, including like-to-like growth of 4.5%. Occupancy has increased to 100%, and WALE increased to 7.4 years, 51% of the portfolio was revalued during the year, delivering significant gains of AUD 137 million, up 13%. We're excited the development pipeline is now progressing from the statutory approval and design phase into the construction phase. Settlement of our infill last mile site in Melbourne is due this quarter. Construction is imminent and 30% of the 72,000 sq m development opportunity is now secured with tenant agreements.
We are very close to securing our development application at Aspect Industrial Estate at Kemps Creek. Pleasingly, we've agreed terms with a 30,000 sq m tenant. We aim to be on site in coming months to commence civil works, and we remain encouraged by the growing level of tenant interest, with the first building expected to be completed in FY 2023. Elizabeth Enterprise Precinct at Badgerys Creek has also secured rezoning, with DA plans progressing, and is likely to commence civil works in calendar year 2022. We have also acquired stage two of this site, adding a further 52 ha of developable area to the 38 ha acquired in stage one. With a sizable AUD 2 billion industrial pipeline, there is opportunity to continue to uplift the balance sheet exposure, while undertaking our usual capital partnering activities to unlock development profit.
Importantly, these development sites were acquired at attractive pricing. We're confident these developments will deliver strong returns from FY 2023. Turning to build to rent, we've been operating our first asset, LIV Indigo, at Sydney Olympic Park for 10 months. Occupancy has now reached 80%, with a relatively consistent monthly let up rate. The customer proposition remains strong. Our customer surveys tell us that security of tenure, being pet friendly, the high level of amenity, the creation of community, and the high level of customer service is of high importance, and that our customers are prepared to pay a premium in rent for the experience. The rent premium at LIV Indigo is still in the 15% to 20% range when compared to neighboring properties. 73% of our renters are millennials/Gen Z, with approximately 84% in either shared, singles, or couples accommodation.
This insight has been important to the design of our future projects, particularly the mix of one, two, and three-bedroom apartments. On this front, we've made great progress. Our 490-apartment development, LIV Munro, at Queen Victoria Market on the Melbourne fringe, is built to level 21 and is due for completion in late 2022. Our LIV Anura development at Newstead, Brisbane, has commenced work on site and is due for completion early 2024. LIV Aston in Melbourne CBD has received planning approvals and is due to commence construction early next year.
LIV as a new business for Mirvac continues to benefit from our experience in design, construction, and site selection in our residential business, and we continue to work together to find opportunities to grow the business to our medium-term target of 5,000 apartments. Post the first rent roll at LIV Indigo at Sydney Olympic Park, which will occur in October this year, we will finalize our third-party capital strategy. We continue to be approached by interested third-party capital partners, we remain resolute in proving out the financial performance of this asset class before raising capital. I'll now hand over to Stu Penklis for the residential update.
Thank you, Campbell, and good morning. I'm very pleased to report, we've completed 5,226 settlements well ahead of our guidance, despite the ongoing challenges of COVID. We've settled a further 200 lots since the end of the year. Off the back of HomeBuilder and other stimulus, MPC settlements contributed 74% of our FY 2021 result and over 80% of our lots settled. At 26%, our gross development margin was well above our through cycle target. This was driven by a high proportion of MPC settlements as well as a contribution from the sale of development rights to the Victorian State Government related to the future metropolitan ring road at our Woodlea project. Owner-occupied demand for Mirvac's quality product has resulted in a 70% year-over-year reduction in unsold completed apartment stock, with completed apartments only available at two projects across the country.
This strong demand also saw us settle the final lots at Marrick & Co, Beachside Leighton, Tullamore Phoenix, Ascot House, and at St. Leonards Square, as well as at Crest at Gledswood Hills in New South Wales. Defaults remain slightly elevated at 2.7% due to the previously disclosed COVID-related settlement challenges at Sydney Olympic Park. Settlements at all other projects have gone well despite the ongoing impacts of COVID. Throughout the year, we received over 20 awards recognizing our high-quality product and continued focus on design excellence, including the prestigious ULI Asia Pacific Awards for Excellence for our Marrick & Co project. Owner-occupied demand remained very strong during the year, with these purchases making up 80% of all sales and driving an 83% year-on-year increase with 3,375 sales achieved.
This demand is well aligned to Mirvac's strategy to develop for the owner-occupier, with our focus on quality and attention to every detail continuing to drive demand and customer loyalty. This strong market momentum across all product types has seen our pre-sales balance grow by 25% to AUD 1.2 billion. MPC pre-sales went from strength to strength, growing by over 100% year-on-year, as purchasers recognized the benefits of our continued commitment to early investment in physical and social infrastructure. Pre-sales will continue to grow during FY 2022 with the launch of seven apartment projects, as well as ongoing demand for MPC, with many projects selling 12 months in advance. In addition to our significant pre-sales, we are well-positioned for FY 2022 and FY 2023, with over 600 deposits on hand worth over AUD 225 million.
Mirvac's competitive advantage continues to be our diverse product offering, providing purchasers a range of options from greenfield land, detached homes, through to middle ring terraces and inner-city apartments. Our strategy to be shovel-ready to respond to demand has paid dividends during the year, as we released over 3,300 lots to the market. This was more than double our prior year releases, including an acceleration of over 1,500 MPC lots. Our ability to launch the right product at the right time saw us successfully launch 6 projects during the year as customers sought out our design and build quality that only Mirvac can offer. These launches included two new apartment projects, Green Square in Sydney, 50% pre-sold, and Quay in Brisbane, now over 70% pre-sold, with both projects contributing over AUD 200 million in pre-sales.
During the year, we also added over 1,700 lots to our pipeline with the acquisition of an over 55s apartment project in Waverley, New South Wales, an apartment site on Princes Park in Melbourne, and the addition of a further two land holdings adjoining our highly successful Smiths Lane project in the southeast of Melbourne. The success of this year's apartment project launches demonstrated that well-designed, well-constructed apartments are still very much part of the future canvas of our cities. Nearly 80% of apartment sales were to owner/occupiers who placed their confidence and trust in Mirvac to deliver. A clear post-COVID trend has been the high demand for amalgamated and larger apartments. We are consistently seeing our larger, more premium product selling first. Amenities also taking a new level of focus in our buildings with premium levels of specification and finishes now standard.
The growing differential between the established housing market and apartments is seeing prices and many owner-occupiers gravitate to apartment living in lieu of standalone homes. Nationally, established house prices have risen by almost 16% in the last seven months compared to just 8% for apartments, and this is forecast to continue. The average difference between house and apartment prices is now over 50% in Sydney, Melbourne, and Brisbane, and even higher in areas of our up-and-coming apartment launches. Significant falling supply across the eastern seaboard provides Mirvac a unique opportunity to commence projects when many others can't. This puts us in a very strong position to have completed stock available when immigration levels return to normal.
These trends give us the confidence to launch a further seven projects of over 1,100 apartments during FY 2022, including the much anticipated NINE at Willoughby and our third and final apartment building at Tullamore, FORME. This will be our largest apartment release program since FY 2016, and customer anticipation for these new projects is strong. These new launches will significantly contribute to Mirvac's pre-sales balance until these projects begin settling in FY 2023. FY 2022 will again be heavily weighted to MPC settlements, with only two apartment projects completing during the year. This weighting will also see gross margins remain above our through cycle target. With 91% of our EBIT for the year now secured and limited settlements in New South Wales, we are confident in our ability to settle greater than 2,500 lots subject to broader extended lockdowns across the country.
We anticipate continuing to see a slow return of investors to the market in both MPC and apartments, followed by offshore buyers. Our pipeline remains strong, with plans to release over 11,000 lots in the next five years, above what we released between FY 2016 and FY 2020. Our commitment to restocking at the right time, in the right place, on the right terms remains. We are excited to be entering the next phase of the cycle, delivering high quality, well-designed homes to suit the needs of our customers and are confident in our ability to continue to deliver strong results. Thank you and I'll now hand back to Sue.
Thank you, Stuart. Finally, the guidance. We're guiding to EPS of at least AUD 0.15 per stapled security, 7.1% growth, and DPS of AUD 0.102 per stapled security. This is based on our view that with an accelerating vaccine rollout, the introduction of rapid antigen testing, which for example, we're piloting for the New South Wales government at Green Square this week, and potentially a vaccine passport, business conditions will start to normalize again towards the end of calendar 2021. We're confident to put out guidance despite the currently exceptionally challenging COVID conditions. To end, I want to be clear about why. Firstly, international evidence is clear that a high level of vaccination significantly reduces severe health outcomes, allowing economies to open up. Australia's vaccine supply will shortly be plentiful, and vaccine willingness is rising.
We have seen that economic conditions can rebound swiftly when restrictions ease, and that remains the expectation of the RBA. Secondly, we have outstanding visibility of earnings. More than 90% of our expected residential earnings for the year ahead are already secured and we've also already locked in commercial development earnings from the Locomotive Workshop and 80 Ann Street. Finally, our modern integrated investment portfolio has very low exposure to small office tenants, few near-term lease expiries, a long WALE, low CapEx, and high-quality growing recurring NOI, including from our newly completed assets. We believe we have risks well covered with appropriate current provisioning, and we have made an allowance for deterioration in conditions in the first half, particularly in retail. We look forward to continuing the Mirvac momentum into FY 2022 and beyond.
Thank you for spending time with us this morning. We look forward to speaking with you one-on-one in the coming days. I'll now open up for questions and see if we can successfully mute and unmute ourselves as we share the questions around. Operator, over to you for questions.
As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Lauren Berry. Please ask your question.
Hi. Good morning, Sue and team.
Good morning.
I just wanted to start on your guidance, if I could. You know, you'd said on the call that you're expecting a significant increase in development profits. You'll have more NOI coming through from those completed office developments. You've obviously got build-to-rent ramping up this year and very strong resi margins. It seems like everything is going pretty well in the business, apart from perhaps retail. Could you just comment on why your guidance is only 7% in light of all of that? Maybe what any expectations that you have for COVID related rent relief this year?
I'll start and then Courtenay can join on that question. I think as we were saying, Lauren, we've got very good and clear visibility of the earnings for next year already. Next year, FY 2022 is largely about execution. We've never had 90% of resi EBIT secured this time before, and we've got a significant chunk of the commercial profit. If there's upside to FY 2022, it will come from potentially faster resi sales and settlements, potentially, and maybe less rent relief than we are currently forecasting for. At this stage, and given that Sydney is in an indefinite lockdown, I think it would be imprudent to bank those things at this stage. Courtenay, would you like to add to that?
I think, Lauren, Sue's covered it. Just to raise, we have flagged that there are some asset sales on the horizon, that'll obviously have impact on our NOI. We're looking forward on rent collection, and the timing around our residential settlements, just to make sure we've considered that in the way we've positioned guidance.
Okay, sure, and j ust on those non-core asset sales, you've highlighted around AUD 600 million in the presentation. Is that about the extent of sales that we should expect this year? Going forward, are there any other assets you're considering non-core at the moment that you might look to divest?
Hand that one to Brett.
Yeah, thanks, Lauren. Look, the 600 number is certainly a figure that is a representation of what's planned for FY 2022. I think going further forward, I think what we've always said is that we will continue to optimize our portfolios, particularly as we have the new development projects coming online. I think some of the probably more older style assets in our portfolio, we'll continue to look at over time, but t he AUD 600 million is the figure that you should allow for now.
What's the average yield on those AUD 600 million of assets that you're selling?
Yeah, look, the average yield would be around sort of 5%, but give or take. We can get you the exact number if you like.
Okay, cool, and j ust jumping to resi now. Stu, I would be interested to know what the impact of the current lockdown is that you're seeing. Has this impacted sales rates in any way across your projects?
Look, I suppose from a Sydney perspective, we had the two-week construction pause, which obviously impacted on program. We are back now up and running. From a sales perspective, amazingly, we have still been successfully able to continue to sell our product in a virtual environment. We do have a number of launches, as I highlighted in my speech, over the next six months. We're just working through at the moment the timing of those launches. At this point in time, we're being able to navigate around the lockdowns.
Okay, great, and j ust last one from me. You've obviously got a huge apartments pipeline coming up, and that's going to make profits look pretty juicy over the next two or three years. Have you considered capital partnering any of these projects like you did last cycle with a few of your bigger marquee projects?
Look, I think, and I'm happy for Brett to jump in, but obviously, we will always look at capital and look at the most efficient way of structuring deals. We are seeing a lot more opportunity at the moment. With that opportunity, we will certainly consider capital partners coming in on our projects.
Okay. Thank you.
Your next question comes from the line of Sholto Maconochie. Please ask your question.
Hi, just to follow on from, thanks everyone for your time, from Lauren Berry's question. On the invested capital, I know you sort of have a target. It's up to AUD 2 billion now of the active side. Obviously, that's going to ramp up when you launch these new apartments and with build-to-rent without the capital partners there. It'd be fair to assume you'd bring in some capital partners, obviously with the build-to-rent, but potentially in the active pipeline, given that may tick up. I do note your investment portfolio has grown commensurate with that tick up, too, so just keen to hear your views on that.
Brett.
Thanks, Sholto. Good question. I think it's fair to say that you've seen the active invested capital increase up to the AUD 2 billion mark. That's really on the back, as I said in the speech, around some acceleration of deployment. That figure has the ability to move up a little bit more, not significantly in terms of our own balance sheet. As you rightly mentioned, there is clearly some very good opportunities for aligned capital partners as we go hand in hand, I guess, in deploying our pipeline, both on balance sheet, and also with key aligned capital partners. It's very much going to be across the board, that type of strategy. It's not just a commercial type strategy in terms of capital partners. You should expect to see that in other asset classes as well.
We should assume no more than 15% of the total capital in active, give or take? We may exceed that slightly, but that's sort of the max range you target still?
Look, I think on a longer term run rate basis, I always go to the 80/20 myself.
Okay
It will just vary a little bit, and r eally, quite a big determinant of it is the timing of the fund through structures. In our commercial development activities, the fund through structures are a very efficient use of capital, obviously, and so j ust the timing around those fund throughs has the ability to change that percentage a little bit.
Just on the production, 2,500 lots. Given the run rate where you're at today and the contracts on hand and the visibility, how much are you constrained by production and settlement in order to get above that? Is it a big item that's impact, given you're selling out 12 months forward? I know you've only got two apartments, do you expect to do at least 200 more than that given where you're at? I think you normally put a run rate of where your contracts on hand are settling, I couldn't see that in the presentation, or maybe I've missed it.
Yeah, look, it's really constrained by production at the moment. Obviously, we had a lot of pull forward. We accelerated a lot of projects into 2021 in response to the significant demand on the ground. 2022 will be dominated by MPC, and the constraint really is production in the field.
Okay, okay, and then j ust on that, thanks for the new disclosure. A bit clearer. Would you expect to have any cost synergies from that Integrated Investment Portfolio, or is it more operational and decision-making? I'm just keen to understand that.
I might take that one. There were some savings from the reorganization that have been reflected in FY 2021, but they've been offset by the cost of implementing those changes. Also, We are seeing the cost base normalize generally. STI is now back in the cost base. We're seeing insurance increase. Yes, there has been savings from the restructure and operational efficiencies beyond that, but we're also seeing cost base shift otherwise.
Okay and then j ust on the provisioning in retail. Obviously, you expect June cash collection to be strong, which it was, given you paid one month up front for your rent. What are you seeing at the moment in a cash collection? Obviously, you've got a lot of Sydney office and retail and CBD. What are you seeing across the board in rent collection, given we're in August now, across the asset classes? Can you give a color on that? What provisioning did you put in, is there currently in for ECLs at 30 June? Because they may be a bit light given where we are now.
Sholto, it's Campbell. I might jump in.
Go ahead.
July has actually been surprisingly good, and I think that, again, a lot of the July invoices were paid. Certainly, it's almost a little early for us to give color on August because a number of our August arrears are not due and payable yet. Certainly, over the next two to three weeks, we will get a better sense of what that looks like. We certainly expect it to be more challenged than it was, obviously, two months ago. We've got adequate provision to cater for that.
Okay, that's been factored into your provisioning. I think the provisioning at 30 June, that doesn't include, is that at that date, or there's a bit of retrospection you can apply when you do the accounts? Was that factoring in?
Maybe, Sholto, I can answer that. We do have to take a position at the 30th of June. The ECL provision at the 30th of June is AUD 35 million. Our aged arrears at the 30th of June is AUD 32 million. We are well covered on the aged proportion. We do have allowances in our forward forecast, particularly related to retail, is how you should think about that.
Okay, I see. You factor that into guidance into that provisioning for the full year?
That's right.
Okay.
Yeah, yeah.
Okay. On the apartment launches, you're confident the demand there is still pretty strong given what you've seen, and lack of net overseas migration? Is it more upgraders than first-time buyers, given that big pricing differential? Can you give a bit of color on apartment demand and the demographics?
Yeah, look, I think the two most appropriate measures are Green Square here in Sydney and Quay in Brisbane, and t hose apartment launches have been dominated by owner-occupiers. Also a significant proportion of right sizers, and obviously upgraders in those pockets. As I said in the speech, Sholto, it's really larger apartments, it's amalgamations, and it's people gravitating towards apartment living in these core locations because house prices in the established market have moved so significantly, and they're seeing the value in apartments.
Great. Thanks so much for your time, everyone, and a good result. Thank you.
Thanks, Sholto.
Your next question comes from the line of Stuart McLean. Please ask your question.
Good morning and thanks for your time.
Good morning.
First question is just on the payout ratio moving into FY 2022. It looks like it's about 71% in 2021, but falling to 68% in 2022 j ust looking at guidance, so what's driving that? Is it the outlook for AFFO? Is it more incentives required? Just a bit of color on that would be great. Thanks.
Yeah, Stuart, it's Courtenay. You see DPS growth is 3% versus our EPS growth of 7%. That growth in the EPS is coming from active earnings. We're holding our DPS growth in line with what is prudent, and the payout ratio in 2022, based on our guidance, is around 68%. On the AFFO, it's around 84%. We think that's appropriate and we'll be focusing on paying out those distributions from recurring earnings.
Okay, and so g oing forward, we should expect that that DPS is growing more in line with commercial earnings and kind of stripping out any growth that is coming through in the development book. Is that a fair statement?
I think that, yes, that's the right way to think about it.
Yeah. Okay. Thank you. Second question, and sorry to harp on about COVID impacts and guidance, but do you have an AUD million number that you can provide for what's in FY 2022 in terms of those provisions? Is it in line with FY 2021, for example, that AUD 20 million mark?
I don't think we want to disclose necessarily what we specifically allowed. I just would say we've obviously well provisioned at the end of 30 June, and we do expect to collect even some of those aged arrears, to be honest. We are well-positioned, and we do have appropriate allowance in 2022.
Okay. Thanks.
I think I would want to add to that as we said, we do expect conditions to be challenging for the first six months. Given vaccine rollouts and antigen testing and so forth, and the rapid rebound that we've seen in economies all around the world when restrictions ease, when health outcomes become better, it's our view that the economy will have a significant amount of pent-up demand in the second half of this year. That's the context in which you should think about current COVID issues.
Okay. Thank you. My next question is probably for Mirvac with regards to the ROIC hurdles. I think you used to talk about 9% ROIC as being a target across the group through the cycle. Does that target still exist in a post-COVID world?
The ROIC we obviously look at is in terms of how, I guess, we see the group's weighted average cost of capital, and then how we see the basically roll-up of the divisional performances within the business. I think it's fair to say that the 9% going forward is probably high now. You'd see that come back if you look at where returns are, particularly in the passive side of the portfolio. I'd probably say that, if you think about what ROIC performance you've seen in passive portfolios and probably not a significant change in expectation around the active portfolios, that's probably the way to think about it.
Okay. It's now 7% to 8%, kind of in line with where you were this year. Is that an appropriate target going forward?
Yeah, look, we don't specifically quote the group's weighted average cost of capital. Our expectation is that we would exceed the group's weighted average cost of capital.
Okay. No comment on ROIC targets like Mirvac used to provide, just kind of stepping away from that at the moment?
Not specifically in an overall three-year average rate. Again, I think you can see the sort of current performance a s a more reasonable run rate.
Okay. Great. Thank you.
Okay. My last question is just for Stuart on the resi side. Does the continued lockdowns put any risk to the settlement dates of Waverley and Willoughby, just in terms of sale launches and could that push settlements from 2023 into 2024 for those? Second question, just on Harbourside, can you give an update on progress at Harbourside and when that could potentially reach settlement?
I'll deal with the first question, then I'll hand over the second question to Brett. From a timing perspective on Willoughby and Waverley, at this point in time, we're on track. The teams are back on site. Obviously, any further lockdowns and closure of construction sites potentially could have an impact in future years. I think importantly, where we are today is, I think New South Wales government has acknowledged the importance of construction and the way in which construction fuels the economy. The tier 1 sites are quite sophisticated, well set up to deal with COVID. As Sue alluded to, we've got testing on site. We've got the methodologies in place to be able to ensure that our sites can continue to operate safely.
There's no risk of starting a delay in launching of those projects, which just pushes everything back six months?
Look, those projects, we've started early works on those projects. We've started early earthworks, so we're well into those earthworks. At this point in time, we are still on schedule to launch those projects towards the end of this year.
Thank you.
Thanks. I'll give you an update on Harbourside. Yeah, look, pleasing to get the IPC determination. Probably, what I'd say to you is in terms of our near-term focus over the balance of this financial year, basically, is to advance the design competition process, which is the next step. Equally, we'll be finalizing the last stage of the unsolicited proposal process, in terms of wrapping that up. Once we get through that, we are in full control of our ability to issue vacant possession notices, then we'll roll out the orderly development of the project. Probably difficult to commit to an exact timeframe at the moment, but as I say, this balance of this financial year, particularly around design competition and basically finalizing the unsolicited proposal.
Thanks for your time. Cheers.
Your next question comes from the line of Adrian Dark Please ask your question.
Good morning, Sue and team. Just one question from me, if I could, in relation to disposals. Mirvac's obviously been active in FY 2021, and it looks like there are a number of additional disposals flagged in 2022. Was just keen to understand a little bit better the thought process behind that. Is that driven by a desire to reweight the portfolio? Is it individual asset considerations, or is it funding or some other factor driving it?
I think, Adrian, it's a combination of all three of those things. We're constantly striving to keep the portfolio modern, low CapEx, fit for purpose, particularly with all the accelerated trends we were talking about through COVID. We look at a portfolio level, keeping the quality high and the age low. We also look at individual projects, for example, Cherrybrook, which it doesn't fit our strategy anymore, but it clearly is a very attractive asset given the price that we were able to divest that. There's a whole range, including freeing up capital to invest in the next phase of our asset creation strategy, so the a nswer is all three.
Thank you.
Your next question comes from the line of Richard Jones. Please ask your question.
Thanks. Did you guys call out what the expected realized profit was on Loco Workshop? If not, can you do that?
Look, we haven't called it out exactly. I think if you work out the disclosed sale price and capitalization rate at 4.7%, and in the additional information pack, we've disclosed the yield on cost for that project, then you can back solve to there.
Okay, a q uestion for Campbell, just interested in your view on office markets. There's obviously, I think, varying forces at play where you have softening but stabilizing vacancy. I think you've got net effective rents in Sydney and Melbourne have been under some pressure, but you've got really exceptional demand on the investment side, on the other hand. I'm just interested in how you think things will play out across those kind of inputs in 2022.
Yeah. Thanks, Richard. Look, you're right, t here's no doubt that across the office markets that we invest in, that you have seen a deterioration in effective rent growth, particularly Sydney CBD. We're certainly very thankful that we've been investing capital outside of Sydney CBD and particularly Sydney Fringe, which has been a really strong performer. T he trend, which picks up a little bit on Sue's comment before, our focus really is to ensure that we are creating products of tomorrow that our customers of tomorrow are looking for.
COVID has really exacerbated and accelerated that view. Secondly, the most important thing investing in a cyclical asset class like office is to be able to weather the storm of lease expiry exposure. Certainly the one thing that we're grateful for is that long WALE in this environment does limit our risk of exposure to the higher incentives and higher vacancies, which are a component of current market conditions. We certainly don't think that office markets are going to deteriorate forever, certainly we saw really good evidence of growth in demand for office space again through the last quarter of last financial year.
I think, Richard, if this current lockdown in Sydney has shown anything, it has really proven that the theory that was discussed endlessly last year, that the office is dead, that theory is dead. I don't think any of us have met a single person who thinks that this is a good way of working into the long term. We feel very confident about having the right product that will allow our customers to use workplaces how they want to into the future in a healthy, wellbeing environment with high technology.
Great, t hanks. Thanks, Sue. Thanks, Campbell.
Next question comes from the line of Andy MacFarlane. Please ask your question.
Hi, guys. Thanks for your time. A couple of quick ones from me just on resi. In terms of pre-sales, how far forward have you now pre-sold in terms of coverage? Maybe across sort of apartments and land, how far are you talking in terms of months out have you sold ahead?
Sorry, Andy, it's Stuart speaking. From a MPC, so from a Master Planned Community perspective, we're on average about 12 months out now. Then from an apartments perspective, as I mentioned in my speech, you'll start to see contributions from apartments really coming through in FY 2023 and 2024.
Got it, t hank you, and i n terms of EBIT, you talked to 91% coverage for FY 2022. Do you have a sense on the level of EBIT coverage you have for FY 2023?
No, we don't put out the numbers for the subsequent year at this point.
Okay, no problem. I n terms of MPC as well, obviously, you've been restocking across apartments and a few other sort of projects, noting sort of Smiths Lane, but also noting that the market's been pretty active in terms of some of your competitors. Also, obviously, you've been selling a lot in terms of MPC. How are you thinking in terms of restocking that land book, noting the pipeline is sort of lower than it was at prior periods?
Yeah, I think, Andy, I think that's where from a Mirvac perspective, we're quite lucky because we obviously do have a significant pipeline secured, so we're not forced to restock. When you look at the strategic restocking that we have been undertaking, it has been adjacent to existing projects where we can really leverage the significant investment that we've made in those projects, both from a physical and social perspective. That's really where our focus has been. In saying that, you would have also seen that we've done a number of site acquisitions in the middle ring, particularly here in Sydney, in the southwest of Sydney, where we can differentiate ourselves from sort of urban edge development, where we can bring in the Mirvac built form capability.
You've seen us more recently launch projects like Georges Cove and more recently acquire projects like the Riverlands Golf Course in Milperra. That will probably be an area that you'll see more and more activity from us from an acquisitions perspective.
Got it, t hank you, and j ust in terms of build to rent, noting that you're pretty actively purchasing sites for that business, the calendar last year and year before, sort of two to three per annum. How are you sort of thinking about that go forward, noting there hasn't been so much restocking or new acquisitions this year?
I think I'll start on that one then Brett can maybe jump in or Campbell from a new business perspective. I think it's a very significant pipeline that we have built, and we haven't yet brought in capital partners, so we're conscious of the effect on balance sheet of the amount that we've deployed. We clearly have a lot of work to do ahead of us to build out the live products that we have already under control. We are always in the market looking for future sites, but we do need to balance out the impact on our capital. Brett, do you want to make any further comment on that?
Probably the only thing I'd add is, we are specifically resourced in terms of new business capabilities in BTR. I can assure you that the team are continuing to look at opportunities. We still have those longer-term aspirations to continue to grow the BTR portfolio.
Thanks.
Thank you, guys.
Your next question comes from the line of James Druce. Please ask your question.
Yeah. Hi, good morning, Susan and team. Thanks for your time. Just following up on Stuart's earlier question around the DPS going through around sort of 3%. He was talking about the payout ratio. Can we just talk a little bit more about the ins and outs of the trust portfolio in 2022? We've touched on the asset sales. Maybe just the development stabilizations and what we're sort of thinking about for like-for-like income for retail and office.
Campbell, do you want to start?
Yeah, y eah, so l ike-to-like income growth on the office portfolio was pretty flat for the year as reported in my comments, at up 0.2%. That was really driven by slightly increased vacancy through the period. Clearly, the real benefit for us was the new income coming in from Olderfleet in Melbourne and South Eveleigh. Similarly, this year, looking forward, we will have, throughout the year, income coming in from the Locomotive Workshop, and through the latter half of the financial year, you'll start to see income contributions from 80 Ann Street in Brisbane.
They will be offset by some asset sales. On the industrial side, certainly like-to-like growth was good at 4.5%. In retail, the income growth that we reported, 11%, a lot of that, given occupancy was relatively flat at 98% through the year, really was driven by rent collection. That's prior years' arrears being collected through FY 2021.
Yeah. Okay. It sounds like you're being fairly conservative on the retail side for this next 12 months.
Look, I don't know whether we'd go as far as saying that we're being conservative. We're being prudent. I think, particularly with lockdown in Sydney, where the majority of our assets are, we have gone from essentially 98% of our stores being open in two days before lockdown to probably 60% now. I'd say that that's a trend that pretty much every retail owner would be experiencing right now.
Okay, and w hile I've got you on the line, Campbell, I just wanted to get the number. You break out the cash incentives in the additional info for office and retail, but there's some non-cash incentives that obviously go in that bucket as well. I'm just wondering what those non-cash incentives were for the period.
Oh, those are really probably rent frees that we're talking about, and they get amortized through in a similar way as some of the CapEx. That really comes through the NOI line.
Yeah. I'm just wondering what that number was. On the quick math, it's around AUD 40 million, I think, for the period. I just wanted to know what the split was between office and retail.
Can we take that one offline this afternoon?
Yeah, I'll take that one offline and get back to you on that.
All right. Finally, just on 55 Pitt. It seems like you're pretty close to pushing the button, and it sounds like a fairly long build, and I know there's a number of factors that you're thinking about in terms of when you push the button on that. Is it fair to say that you probably won't need a pre-commit if it's a long build because it's hard to get a pre-commit four years out, say?
Yeah, look, I don't think we'd make any comment around a specific level of pre-commit. I think that clearly there's a lot of factors at play on 55 Pitt Street. As you rightly say, we've owned that asset for some time. The team have done a tremendous job in terms of, I guess, getting it to a point where we have issued vacant possession notices, and it will be a high-performing asset in terms of EBIT contribution and value uplift over time. We will make a risk-adjusted decision as we move through the balance of this year around just when we formally do start the next phase of construction commencement. Clearly, an exciting project for the group and clearly many pathways around capital partnering and other options.
Okay. Thank you.
Operator.
Your next question comes from the line of Ben Brayshaw. Please ask your question.
Thanks, Sue. It's been a long call, so just mindful of time, I'll take my questions offline.
Okay, thanks.
Your next question comes from the line of Tom Bodor. Please ask your question.
Good morning, all. Just a very quick one from me, mindful of time as well. I just wanted to understand what proportion of Harbourside do you anticipate will be residential, just the percentage of GLA there?
Look, we're still doing a little bit more work around that, but I think what we'll do is take it offline, and we'll give you a bit more detail on Harbourside, if you like.
Thanks.
Your next question comes from the line of Alex Prineas. Please ask your question.
Yes, good morning, and j ust on the renewals that you have, the office renewals that you've had over the last period and also since the end of the period, what type of footprint are tenants going for? Is it sort of similar size, or is it significantly smaller? What type of leasing flexibility is being built into the lease in terms of expansion and contraction rights and that sort of thing?
It's Campbell speaking. Clearly the majority of the leasing deals, we've really only started to see what I'd call better quality demand relocating in the last 6 months. The first 6 months of the financial year were very slow. On average, I think, and again, this would be a bit of a guesstimate, I would say that probably on average, corporates over 2,000 sq m to 3,000 sq m are probably handing back a little bit of space. Tenants below 1,000 sq m are probably close to hanging on to what they previously occupied. There's not really a thematic there, yet.
Most tenants are still quite happy to take longer-term leases, we've found, and t hat's really in response to the cost of fit outs, and how they think about the cost of fit out. Certainly the lease term and the associated incentives is very important in delivering the capital that the tenant requires for fit out.
Okay, thanks for that.
There are no further questions at this time. I would like to hand conference back to these presenters. Please continue.
Thank you very much, everybody, for spending time with us this morning. We look forward to speaking with you either this afternoon or in the coming days, and next time in person. Thank you very much and h ave a good day.