The Queensland Department of Communities, Housing and Digital Economy (DCHDE) manages the State’s social housing portfolio and was responsible for realising the outcomes contemplated as part of the Queensland Housing Strategy 2017-2027 which included supply of 5,556 new dwellings over a 10-year period across the State.
Prior to the announcement of the Queensland Housing Investment Growth Initiative in 2021, Partnering for Growth was a key program which aimed to support a strong, capable community housing sector able to respond to the housing needs of Queenslanders.
- develop a person-centred and place-based community and affordable housing operating environment
- provide modernised funding arrangements to ensure providers can leverage growth from existing government investment
- increase the supply of community and affordable housing in Queensland managed by community housing providers.
Submissions were sought from community housing providers (CHPs) under an open-ended RFP process. This resulted in a diverse range of Property Development Proposals (PDPs) being submitted ranging from the delivery of low-density residential dwellings through to high density unit developments.
The challenge
KPMG was engaged by DCHDE as Commercial and Financial Advisor for Partnering for Growth with a primary focus on the evaluation of PDPs.
KPMG was engaged to provide:
- Strategic advice – Provision of strategic advice and support in relation to transactions and proposed arrangements with CHPs and other initiatives being considered by DCHDE.
- Proposal evaluation – Evaluation of projects with a focus on capability, financial capacity and a detailed review of the project and development fundamentals including feasibility analysis. Our assessment leveraged a consistent approach and was adjusted depending on the complexity of the PDP.
- Transaction management and support – KPMG provided ongoing advice to DCHDE regarding individual PDPs including identified transaction risks, approaches to mitigate and actions to achieve appropriate commercial outcomes.
Our approach
DCHDE and KPMG worked collaboratively, with a small project team to successfully deliver this important project. KPMG’s role included:
- Coordinating interactive workshops with proponents
- Capability assessments of CHPs comprising:
- management and board experience
- portfolio composition
- project experience
- Development assessment comprising:
- development overview
- product mix
- planning approval status
- valuations
- delivery (construction etc.)
- Project operational assessment comprising:
- revenue and rental assumptions
- operating cost assumptions
- planned, responsive and lifecycle maintenance costs
- Financial analysis (development and operations) comprising:
- a review of estimated operating cash flows
- funding and financing assumptions (typically comprising debt, equity and capital grants)
- sensitivity analysis and scenario analysis to test potential cash flow impacts.
- Financial capacity assessment comprising:
- a review of financial performance
- analysis of key financial ratios with reference to the NRSCH’s Financial Performance Report and target performance outcomes.
- Project management and coordination
What we delivered
KPMG was responsible for preparing evaluation reports for submissions made by CHPs. We successfully supported DCHDE by developing a streamlined assessment approach and consistent report structure.
Our work allowed for informed decision making with key recommendations being utilised to brief the DCHDE leadership team.
Social housing insights
The latest thinking and research related to social housing
