Defence Housing Australia

Overview Key strengths Key risks Ownership and interaction with the Australian government, and its strategic importance to the Australian Defence Force (ADF). Development and constructions risks associated with higher provisioning needs than what DHA currently anticipates. Long-term service agreement and highly rated revenue counterparty (Australia). Direct exposure to Australia's cyclical residential property market. Strong liquidity, with credit lines provided by the Australian government. The strong credit quality of, and stable revenue streams from, the government mitigates DHA's tenant concentration to government entities. We believe DHA will continue to play a pivotal role in providing housing and administering home ownership initiatives for ADF. In our view, DHA will manage its operations to ensure provisioning demand meets Defence?s long-term growth of about

...Defence Housing Australia's (DHA) longstanding service agreement with the Australian government and its strategic importance to the Department of Defence (Defence) continue to support its credit quality. The strong credit quality of, and stable revenue streams from, the government mitigates DHA's tenant concentration to government entities. We believe DHA will continue to play a pivotal role in providing housing and administering home ownership initiatives for ADF. In our view, DHA will manage its operations to ensure provisioning demand meets Defence's long-term growth of about 20% by 2040. Increased direct leasing will drive portfolio sizing in fiscal years 2023-2024 (year-end June 30). Leasing terms are typically structured for up to 15 years at low interest rates of 1.7%-2.2%. In the current interest rate cycle, we believe direct leasing represents more efficient use of capital to meet provisioning targets than property acquisitions or developments. DHA has considerable financial headroom...

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