Harry Triguboff may abandon plans to sell his Meriton apartment empire to a Chinese developer, saying talks on the potential $15 billion deal had “stalled”.
Australia’s second-richest person revealed his plans to The Australian to sell Meriton last year, and has been in talks with Chinese developer Country Garden. Others had also shown interest, Mr Triguboff said.
Ahead of flying to Israel yesterday, and then on to Miami and Los Angeles to look at serviced apartments, Mr Triguboff said he was passionate about providing water infrastructure in a bid to boost Australia’s sparse population.
But a change in career for the 81-year-old would still need to turn a profit. “Until I can make money out of water (infrastructure), I don’t want to sell the business,” he told The Weekend Australian. “I haven’t worked it out yet, but we must be able to make money from water.”
Any business had to be profitable to have a sustained future, he added.
The Meriton founder has long supported water infrastructure projects in Israel, such as the development of reservoirs.
Mr Triguboff, named Australia’s second-richest person by Forbes magazine this year, expects to build 3000 apartments during 2015 and has bought a rash of new development sites in Sydney over the past 18 months. The building boom comes as his 24-year-old grandson Daniel Hendler has been increasingly involved in the business.
Mr Triguboff expects a further cut to interest rates and for rates to stay low. “Australia has the highest interest rates of comparable countries and our interest rates have steadily gone down. So our rates are at record lows, but the important thing is they have gone down consistently,” he said.
Mr Triguboff is still bullish on the Sydney residential market despite the strong price growth. Sydney’s housing prices rose 13 per cent in the year to the end of January, followed by Melbourne (7 per cent) and Brisbane (4.6 per cent), according to researcher CoreLogic RP Data.
He noted that the sluggish Gold Coast market, where Meriton also has projects, was also seeing price growth.
Demand for housing would remain strong on the back of population growth, but interest rates were unlikely to inflate a housing bubble, he said. Interest rates were already so low that another 25-basis-point cut would have a limited impact on consumers’ back pocket.
This echoed comments yesterday by Reserve Bank governor Glenn Stevens, who warned that interest rate cuts may not have the same impact on spurring growth as in the past.
Mr Triguboff also called on federal and state governments to recognise and reform regulation around housing development.
“Because of the importance (to the economy) of housing and tourism, our NSW planning process has to be immediately improved,” he said.
In Miami and Los Angeles, Mr Triguboff plans to look at trends in serviced apartments, which has been an increasingly large part of Meriton’s business. The developer has five new Meriton Serviced Apartments in the pipeline, including in Chatswood, North Sydney, Parramatta, Mascot and Southport on the Gold Coast.
Meriton is building its largest single project, the $1bn Mascot Central in Kent Road, Mascot, in Sydney’s south. It will have 800 apartments and 386 serviced apartments, 16 shops, a Woolworths and childcare centre.
In December, Meriton released financial results for the first time. Its net assets rose to $7.4bn for 2014.
This article first appeared in The Australian Business Review