Real estate investment company Mirvac Group (ASX:MGR) says it will take a $215 million provision against inventories because of slower than expected sales and oversupply and heavy discounting in regional markets.

Mirvac said select regional markets are not recovering in line with metropolitan markets. These markets have experienced slower than expected sales over the traditionally strong spring and summer periods, and continue to be characterised by oversupply and heavy discounting.

"Consequently, the carrying values of Mirvac's inventories have been reassessed, resulting in a $215 million provision," the company said.

Mirvac has also taken a proactive decision to dispose of zero margin projects in poor performing regional markets, which it said will allow the company to release capital for investment into profitable residential development opportunities.

Managing director Nick Collishaw said, "We expect this to eliminate the requirement to invest a further $312 million to build out these non-aligned projects and to assist Mirvac's development division achieve a faster return to normalised financial performance."

Mirvac reaffirmed its earnings guidance for the 2011 financial year of between 10.2 to 10.6 cents per stapled security and distribution guidance of eight to nine cents per security.

The real estate developer said it has experienced limited impact to its residential projects across Brisbane as a result of the recent flood crisis but will continue to monitor project impacts and inform the market if a material impact arises.

At 1233 AEDT, Mirvac shares had lost 1.93 per cent to $1.27, after paring losses in morning trade, and against a 0.61 per cent rise in the benchmark index.