Housing our Heroes

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-By John Boley

Defence Housing Australia (DHA) was established in 1988, as a wholly government-owned statutory authority, to provide housing for members of the Australian Defence Force (ADF) and their families in line with ADF operational requirements.

The company currently manages some 18,000 properties across Australia worth around $8 billion and, according to chief operating officer Peter Howman, business is good. “DHA is doing very well. Our revenue last year was just under a billion dollars. The future looks even more rosy – Defence is growing in numbers and we are growing by a thousand or so [properties].” DHA has capital expenditure of more than $400 million per year on its many projects.

There are two sides to the business, Mr Howman explains: “the Defence side, provisioning houses to members of the Defence forces, and the investment side of the business which is where we generate our income from, to sustain the business.” As it is a Government Business Enterprise (GBE), other property investments often cannot match the security of income provided by DHA, with zero vacancy risk and guaranteed income for the term of the lease.

A GBE since 1992, DHA has its headquarters in Canberra, providing operational, financial, information technology, human resources, communications and corporate support to the organisation. There are some 20 offices around the nation. The construction programs are spread right across Australia, says Mr Howman, although “north and southeast Queensland and Adelaide have been great for us – and Darwin too.”

DHA provides a comprehensive housing solution, offering property management to its customers. In total there are approximately 600 staff, of which about 80 are engaged in construction and developments. Some staff members work in the head office in a variety of corporate and financial roles, while the rest work to support ADF members at a number of Housing Management Centres in major areas and outposts located around Australia to help families find a new home when the ADF member is posted to a new location.

To fund its operations, each year DHA sells a limited number of properties to individual investors under a leaseback arrangement. Properties sold under this program have been built or acquired by DHA in response to the housing requirements of the Department of Defence. DHA property investors benefit from a secure long-term lease, reliable rent payments, and extensive DHA Property Care services.

Non-Australian residents are eligible to purchase a Defence Housing Australia (DHA) investment property. Typically, non-Australian residents wishing to purchase an investment property in Australia are required to seek approval from the Australian Government’s Foreign Investment Review Board (FIRB). DHA holds developer approval to sell a percentage of developments to foreign persons. This means non-Australian residents purchasing a DHA investment property are not required to seek approval from the FIRB. A special condition to this effect will be included in the sales contract where applicable.

In 2006 DHA gained its second institutional investor with Westpac Funds Management Limited. This was the second landmark transaction involving a large scale investment in DHA properties by an institutional investor.

Sale and leaseback is an important part of the business, says Mr Howman. “We went to the market again in the last 12 months for an institutional investor, and we have been successful. We are just about to sign a contract. It represents a large-scale deal, showing interest in the residential property market.”

There are three ways DHA acquires properties, he explains, pointing out that around 2,000 leases expire per year. “So we have to replace them. We can renew a lease – negotiate with the owner – but the major way is through acquisitions or construction and we build some 1,200 houses per year nationally.”

Between 2009 and 2010, the company constructed 965 houses at a cost of some $420 million and purchased a further 165 at a cost of $78 million. In addition, DHA direct-leased 149 properties and wrote new leases on 508 existing properties where leases and options had expired. After taking account of expiring leases and the exercising of 844 options that were at DHA’s discretion, net additions to the portfolio in 2009-10 resulted in total stock under management for members with dependants of 17,415 properties, with a further 167 properties handed over but not activated for Defence housing purposes. Recent growth is expected to mean the portfolio will remain at the 18,000 mark for the foreseeable future.

Principles of sustainable development continue to be incorporated in DHA’s decision-making systems, practices and processes, and the company focuses on five key sustainability areas, says Mr Howman: “energy consumption, water consumption, effective waste management, human well-being and the biodiversity of local flora and fauna. All the homes we currently build are rated six stars or higher; we have moved ahead of the COAG requirements.”

Regular upgrades are another element of maintaining quality in the homes. Another current project is upgrading or replacing air conditioning in some 3,500 homes (new homes all have air conditioning but this project is aimed at updating older properties that do not). In addition, Mr Howman points out, “this year we have spent around $4.5 million on upgrading 13 heritage listed properties around Australia.”

To promote itself, DHA hosts and attends events, including free information sessions, open homes and exhibitions, throughout Australia. In its advertising, says Mr Howman, “we like to use real-life scenarios, real-life people, we get statements from real investors and real Defence members, to ensure that what we are saying is bona fide.”

Most of DHA’s advertising activity in 2009 and 2010 focused on promotion of the individual SLB program and advertising aimed towards Defence members around a range of initiatives. Despite significant investor demand during the reporting period, DHA undertook a targeted advertising campaign to maintain brand awareness and ensure sufficient future demand.

DHA’s success so far stems largely from the way in which it manages to combine its key goals of meeting the operational needs of the Department of Defence for housing and contributing to the morale of ADF members and their families with its corporate aim of operating efficiently to attract and retain lessors and other investors. DHA understands that every family is different, and that not every house will suit every family, and its future looks assured if it continues to gather feedback to create better homes for Defence families.

Home Automation

Call it ‘domotics,’ and you are likely to receive a blank stare, but refer to it as ‘smart home’ or ‘home automation,’ and you will get a nod of acknowledgement. For the past few years, consumers have heard the word ‘smart’ attached to countless products and services, from food and drink to snacks like popcorn and mobile phones, which no one seems to refer to as a ‘cellphone’ anymore. Yet what, exactly, constitutes ‘smart’?

August 18, 2022, 8:47 PM AEST