Property services

In 2015–16, the overseas property portfolio was valued at $2.8 billion by independent valuer Savills. This was a $400 million increase over the previous financial year primarily as a result of the capitalisation of the Jakarta embassy project.

In line with the Government’s decision to expand Australia’s diplomatic footprint, the department successfully secured and fitted out leased properties for new posts in Phuket, Makassar and Ulaanbaatar. We identified a leased property for the new post in Doha and fit out completion is expected in late 2016. A property search is also underway to establish the new post in Lae.

We completed the 40,500 square metre compound in Jakarta—now Australia’s largest Commonwealth-owned building overseas—on time and within budget.

The Bangkok chancery, head of mission residence and services buildings are nearing completion. The quality of construction is high and the project remains within the budget allowance. However, program pressures will need to be closely monitored to ensure the project is completed in March 2017.

We commenced construction of a new embassy in Nairobi on 1 April 2016. The proposed new chancery will feature the highest level of security overlay for overseas missions. Construction of a new embassy in Washington DC is still in the preliminary stages. The concept design will be finalised and a design consultant appointed before a submission is prepared for the Parliamentary Public Works Committee (PWC). Following PWC approval, the project will enter its first phase, with the selection and fit out of a temporary chancery.

The department acheived a management expense ratio (MER) of 1.06 per cent, which is appropriate to the unique nature of the overseas estate. The MER refers to management expenses expressed as a proportion of the portfolio value.

Within our domestic portfolio, a new 15-year lease for the RG Casey Building in Canberra came into effect on 1 May 2016 following practical completion of the three-year program of landlord renovation works.

Our annual review of the AMPs helped guide the asset replacement program for the overseas estate and underpinned the development and completion of an $8.2 million minor capital works program.

ORIMA Research undertook the annual client satisfaction survey of OPO and outsourced service provider Cushman and Wakefield (C&W). The survey results showed the vast majority of the department’s tenants were satisfied with OPO’s property management (93 per cent) and C&W’s maintenance services (91 per cent). Satisfaction with OPO’s overall performance remained strong across all regions with results ranging from 88–100 per cent.

Satisfaction fell from 100 per cent in 2014–15 in Africa (92 per cent) and the Americas (91 per cent). Overall satisfaction with C&W’s performance stabilised across the regions with the results range narrowing to 80–96 per cent (compared to 74–100 per cent in 2014–15).

The department’s tenants rated both OPO and C&W at 87 per cent on the aggregated customer service measures (professionalism, courtesy, responsiveness and knowledge). For OPO this result was up from 85 per cent in 2014–15. C&W’s results improved over the previous year in the Pacific (up from 82 per cent to 93 per cent), North Asia (up from 86 per cent to 93 per cent) and Australia (up from 72 per cent to 78 per cent).

The survey outcomes will assist in establishing our baseline for benchmarking the future performance of JLL.