Annual Report 2003-2004
 

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OUTPUT 4.1: Property management

Output 4.1: Quality and quantity information

Quality indicators

Quantity indicators

Portfolio condition

OPO assessed the overall condition of the overseas owned estate as good, based on the assessment model described in the overview section on output 4.1. The condition of the estate has improved steadily since 2002, reflecting a substantial forward program of construction and refurbishments and improved maintenance programs.

The condition of properties in the estate can be expected to improve further over the next five years as a result of planned refurbishments, including in relation to updated compliance with relevant Australian and local building codes, and proposed major construction projects (see output 4.2).

Tenant satisfaction

OPO conducts twice-yearly overseas tenant surveys on property management issues. The surveys deal with the services provided through the department's overseas property management alliance with United Process Solutions (UPS) (see output 4.2). Survey results during 2003–04 were consistent with those conducted during the past two years, and continued to reflect tenant satisfaction with services provided where UPS facilities managers were attached to posts. The results remained mixed where tenants used services coordinated through UPS's Australia-based call service, which responds to direct requests from posts on a 24-hour a day basis. Tenants were satisfied, however, with call centre access. Work undertaken throughout 2003–04 by OPO's Estate Management Group, which was set up in 2003, has strengthened arrangements for oversight of service delivery and liaison between tenants and the service provider (see also output 4.2 quality and quantity information).

Quantity information for output 4.1

Return on investment

The rate of return on investment on the overseas owned estate in 2003–04 was 9.74 per cent, which was towards the higher end of the expected industry range.

Management expense ratio

The management expense ratio indicates the relationship between costs of management and value of the estate. For 2003–04 the ratio is assessed at 0.85 per cent, which was consistent with external industry benchmarks derived from data measuring the performance of listed Australian property management companies.

Annual dividend

OPO returns an annual dividend to government, the quantum being agreed between the Minister for Foreign Affairs and the Minister for Finance and Administration. The department paid to the Government an agreed dividend of $99.05 million relating to the overseas portfolio for the financial year.

Returned equity

As noted in the Annual Report 2002–03, the divestment program established by the Government in 1997 for the owned overseas estate concluded on 30 June 2003. In consultation with the Department of Finance and Administration, OPO continues to sell and purchase property on an as-required basis. An amount of $4.25 million from property divestments was returned to the Government in 2003–04. On 30 June 2004, OPO entered into a contract for the sale of the staff residential compound in Bangkok, income from which will be reflected in annual outcomes in 2004–05.

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Department of Foreign Affairs and Trade Annual Report 2003–2004
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