DHA Annual Report 2012

Chairman and Managing Director's report

Defence Housing Australia (DHA) has had a successful year in which in various ways, it managed the housing needs of nearly 20,000 Defence families and 11,600 single members.

We completed the preparation of housing for the arrival of 3RAR in Townsville and embarked on the expansion of our off-base singles business, growing the portfolio to nearly 200 apartments. We concluded the purchase of a strategic land parcel in Brisbane and made good progress on the development of other major land holdings. We continued a program of investment in Defence on-base housing, especially in the Northern Territory. In an uncertain housing market we met or exceeded key financial targets including the generation of $325 million in revenues from the sale and leaseback of our properties. Earnings Before Interest and Tax were $123 million and Net Profit After Tax was $83 million. During the year, a new Enterprise Agreement for our staff was negotiated.

DHA’s main role is the supply of housing and related services to Defence members and their families in support of Defence operational, recruitment and retention goals. During 2011–12, DHA provided and maintained 17,471 dwellings for this purpose and met most customer satisfaction targets set by Defence and the DHA Board. Average occupancy rates on DHA owned and leased dwellings was maintained at around 92%. The completion rate for routine maintenance was held at 82% within 15 days compared to a target of 80% in 28 days. In addition, DHA managed payment of Rent Allowance to a monthly average of 3,400 members with dependants and 11,600 single members.
In the past two years, DHA has invested $250 million in several large development sites in Adelaide, Townsville, Brisbane and Sydney. Along with the new suburb of Muirhead in Darwin, these acquisitions constitute a significant broadening of DHA’s business. Development is not new to DHA but the number and scale of these activities are. We have invested in the acquisition of the required in-house expertise and carefully selected industry partners to assist us with these developments. All of these projects and several medium-size development activities are subject to scrutiny by the Parliamentary Standing Committee on Public Works.

DHA is committed to a $250 million program of investment in Defence-owned housing on and off-base to assist in bringing this portfolio to the required minimum standard by 2017. It has been a very positive partnership, particularly in Darwin where 97 new dwellings are nearing completion at Larrakeyah Barracks. Following Ministerial approval, work also began on the upgrade of nearly 200 houses on RAAF Base Tindal. During the year, a new housing precinct servicing Gallipoli Barracks, Enoggera, was completed. Several other major projects are afoot.

During 2011–12, DHA spent $335 million on a capital program to acquire 704 new houses by construction or purchase and $26 million on the acquisition of 63 apartments for Defence singles. This program was funded without additional borrowings, mainly through the sale and leaseback of DHA properties, disposal of properties no longer required and the sale of surplus land. Total revenues from these sources was $395 million including $325 million from the Sale and Leaseback program. This was a very pleasing result in a difficult property market and against a backdrop of global economic uncertainty.

During 2011–12, the Hon. Arch Bevis was appointed to the DHA Board. Five existing members were reappointed. There were no other changes.
Under Section 9 of the Commonwealth Authorities and Companies Act 1997, the Directors are responsible for the preparation and content of this report, in accordance with the Finance and Deregulation Minister’s Orders. This report is made in accordancewith a resolution of the Directors.

The Directors of DHA are pleased to present this Annual Report for the financial year ended 30 June 2012.