The ACT government commissioned the KPMG report as it struggles to resolve a major stoush over a land deal which was to have seen the child care centre move to a new site on the Telopea Park school tennis courts. But the school is fighting hard to retain its tennis courts and now has balance-of-power Greens politician Shane Rattenbury on its side.

The government wants the child care centre to move from the prime Manuka spot so that the club can use the land for new club premises and a multistorey residential development with underground parking for defence housing.

It is not clear how the club and housing development would work and neither Defence Housing Australia nor the services club would provide any detail.

Defence Housing Australia, owned by the federal government, normally builds then sells housing, renting it back to house defence personnel on postings.

Under questioning from the Liberals in the Assembly on Thursday, Chief Minister Andrew Barr said Defence Housing Australia was looking to expand its portfolio around the city in light of the increasing demand for housing for personnel.

"They have sought discussions with the territory government in relation to the construction of housing in joint ventures on a number of different sites across the ACT, including this one," he said.

The deal cannot move ahead until a new home is found for the child care centre, which doesn't want to move. Director Robbie McGarvey said the centre's strong preference was to stay where it was. The centre is not-for-profit and doesn't pay rent at the site it has occupied for 88 years.

The government-commissioned KMPG report sets out options for how the centre might fund its own new building, or do it with a contribution from government, or lease a new building from a developer.

Ms McGarvey said at first glance it looked as if there were some positive scenarios, but she was yet to be given a copy of the report to go through it in detail.

If it couldn't stay put, the centre's second preference was to move to land behind the Griffith shops, but she understood the Griffith community's desire not to lose green space.

'We are in a situation where we don't own the land and we don't own the building but we feel that the government does have a an obligation to look after Mocca," she said. "We've been here for 88 years. Surely you wouldn't throw out a community-based service."

The centre was "in disbelief that the ACT government would expect a community-based centre to foot the bill for land and a possible $7 million build", she said.

The $7 million figure came from a 2010 proposal to develop a Griffith shops site for the French Australian preschool.

The government eventually abandoned the plan, with Mr Barr, the then education minister, noting problems with the site. "These issues include the site being too small for a single storey building, the number of significant trees that would need to be retained and would restrain development, overhead power that would need to be moved, as well as other services crossing the site, a waste transfer station in the middle of the site, insufficient area for pick up and drop off, and other issues," he said at the time.