This article is from the Australian Property Journal archive
The federal government has gone against the National Commission of Audit's recommendations and abandoned the $10 billion sale of Defence Housing Australia.
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The government did not disclose why it has decided not progress with the DHA sale.
However, Minister for Finance Mathias Cormann said that after careful consideration, the government has decided to approach the market to test investor interest in four of these properties – East Block; West Block; Anzac Park East; and Anzac Park West (including the adjoining restaurant building).
The government has decided it will retain ownership of the John Gorton Building and the Treasury Building at this time.
“The government is open to considering other potential uses for these properties taking into account what could be appropriate for these areas,” Cormann said.
“The government is also working to maximise value from Commonwealth property leases in the ACT by ensuring surplus vacant office space is promptly filled by agencies with similar requirements and upcoming lease expiry dates.
“Previously individual agencies were responsible for managing their own large vacant leases. These leases will now be considered at a whole-of-Government level to maximise the efficient use of leases across government.
“This approach has the potential to save an estimated $200 million over 10 years. The long-term accommodation needs of the Department of Immigration and Border Protection and local impacts will be considered as part of this review,” the Minister added.
Meanwhile DHA managing director Peter Howman welcomed the government`s move, adding that it could not have come at a better time for those looking to invest in the property market in Australia.
“We will now use this renewed vigour to grow as a business. For investors this means more options to look forward with DHA. Our property portfolio will continue to expand and diversify giving investors more options in the type of property they choose to buy, but still maintaining all the same features that the DHA investment offering is renowned for.
“Now is not a time to rest on our laurels, but to use this momentum to build on providing more efficient services and to rolling out more innovative housing options that offer a cost efficiencies to members,” Howman said.
The government also announced it would review DHA`s accounting, information technology and business reporting systems to improve the transparency of the cost of providing services.
“No further details about the process of the review have been released. Until we are told more about the process and the timeframe, we will continue business-as-usual,” Howman said.
DHA was originally listed as one of the first five government businesses to be sold before the next federal election in 2016.
In 2013-14, the DHA posted a bumper net profit after of $90.1 million, well ahead of its target of $84.3 million. It was delivered on the back of a net revenues of $1.191 billion – up from $1.041 billion in 2012-13.
DHA also paid a bumper dividend of $54 million to the government compared with the forecast of $50.6 million, and its total payments to the government was $114.9 million, comprising of dividends, income tax and state taxes.
As at 30 June 2014, 18,577 properties were managed across Australia worth approximately $10 billion.
Australian Property Journal
