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Output 4.1: Quality and quantity information
- Portfolio condition to be maintained to industry standards.
- Tenant satisfaction to be reviewed by annual survey.
- Return on investment to be compared with external industry benchmarks and the agreed annual requirement as determined each year.
- Management expense ratio to be consistent with external industry benchmarks.
- Pay agreed annual dividends to Government.
- Return equity (for 2001-02) of $23 million from proceeds of divestment program.
Our model for measuring and monitoring the physical condition of the owned overseas property portfolio rated the estate overall as being in satisfactory condition out of a four-point range-unsatisfactory, poor, satisfactory, good.
The ratings for age, functionality and structure were good. For expenditure on maintenance and repairs the rating was poor, and for compliance with safety and storage codes the rating was unsatisfactory.
Tenant surveys on property management issues-focusing on services provided through the department's overseas property management alliance with PricewaterhouseCoopers-were completed in December 2001 and in June 2002 (see output 4.2 for further detail).
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Quantity information for output 4.1
Return on investment
The return on investment was 5.01 per cent for the owned overseas estate, compared to an external industry benchmark range of between 8 and 9.8 per cent. Stagnant markets in major international locations, particularly London and Tokyo, caused the shortfall. The agreed annual target for 2001-02, 8.1 per cent, applied to the combined domestic and overseas Commonwealth property portfolio. There was no separate figure for the owned estate, but there will be in 2002-03.
Management expense ratio
The management expense ratio was 0.73 per cent, which was consistent with external industry benchmarks.
The department paid to the Commonwealth an agreed dividend of $88 million relating to the overseas portfolio for the financial year.
The department returned to the Commonwealth $21.6 million representing the net proceeds from overseas property divestment activities.
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