It was as early as 1963 that Harry Triguboff noticed average Australians were all living in cottages and houses on a quarter-acre block and decided it was time they all lived in apartments. Hence, the new Australian dream began and since then, his privately-owned Meriton has become the biggest apartment developer in Australia, providing apartments for more than 150,000 people in a nation of 22 million. In Sydney, about 3 in every 100 people live in a Meriton-built apartment.
His strategy is to build the tallest apartment blocks he can get approval for in locations where people can afford. He is now relying on housing demand in a country which has a shortage of 200,000 dwellings per year, where the average home costs 6.8 times the annual median household income, more than double the US ratio of 2.9 times accordingly to Demographia Internationa Housing Affordability Survey.
During the Global Financial Crisis when credit evaporated and rivals such as Australand Property Group retreated, Meriton has increased its share of the apartment market by managing every step of the building and sale process and self-financing projects due to its financial strength.
The son of Russian Jewish emigrants, Triguboff was born in Dalian, China in 1933 and came to Australia with his family in 1948, just before Mao Zedong’s communst revolution. He attended high school at the Scots College in Bellevue Hill and the University of Leeds in England, worked for a textiles company in South Africa and went into a carpet manufacturing business with his father and brother in Israel. He returned to Australia in his mid-20s where he drove a taxi and owned a milk delivery service.
From these humble beginnings, his hard work has earned him recognition today as Australia’s fifth wealthiest man with an estimated fortune worth $4.2 billion according to BRW magazine. This immense wealth was built through battles with governments, rival developers and the steadfast cultural preference for free-standing homes. to perpetuate this fortune, Triguboff is ramping up one of its largest projects, the 77-storey Infinity Tower which will be Brisbane’s tallest residential building and the 2,000-unit Victoria Square apartment development in Sydney’s inner suburb of Zetland. Indeed, some people have not welcome some of these mega-projects as they continue to change the facade of some of Sydney’s old suburbs and neighbourhoods. Overcrowding is a major concern where some areas attract a lot of renters and university students.
”In this business, you don’t have to be an architect or an engineer or a brick layer,” he said. “But you have to understand how the money flows and that you can only understand if you’re on the site.” After a stint in property sales where he admitted to being a “very bad salesman”, he tried development instead and took a loan to buy his first block of land in 1963 in Tempe, an inner-west industrial suburb of Sydney under the flight path of the nation’s busiest airport and built a block of eight units, learning the construction process onsite.
Five years later, he built a block of 18 units on Meriton street in Gladesville, a northern Sydney suburb which provided the name of the company which he registered in 1968. He listed Meriton on the Australian stock exchange, then bought the shares back about 1 1/2 years later in January 1974 as the company’s success and the appeal of being his own master grew.
In the 1980s, Triguboff decided to only buy during slumps and sell during booms, and to only build in areas that already had infrastructure to support developments. Meriton had enough assets to cover all its debt by the 1980s, and by about 2000 it was debt free and funding its own projects, which proved vital seven years later when the financial crisis hit.
Competitors – including Stockland, Australia’s biggest diversified property group, and Australand, backed by Singapore’s CapitaLand – moved away from the apartment industry as financing costs spiked. Meriton kept on developing and has now built more than 60,000 apartments.
“In the middle of the global financial crisis, when everyone else was shutting down, he’d built up his business to a point where he could keep building without skipping a beat,” said Aaron Gadiel, chief executive officer of the Urban Taskforce, a developers’ industry group. “He correctly anticipated that demand for his kind of apartments, those affordable to the average homebuyer, wouldn’t slacken.”
Medium- and high-density housing accounts for about 35 per cent of sales in Australia’s capital cities, RP Data estimates, up from about 25 per cent in 1995. In NSW, 20.5 per cent of people lived in apartments in 2008, according to the latest data from the statistics bureau, compared with 14.3 per cent in 2000.
Sydney’s population is forecast to rise to about 6 million by 2036, according to the NSW Planning Department, from about 4.5 million now. The nation’s most populous state is expected to have a shortage of 232,600 homes by 2020 under current building patterns, industry group Housing Industry Association estimates. Australia’s housing shortage will balloon to 466,000 in the same period, the HIA says, from about 200,000 now.
Triguboff says he can’t convince enough local governments to approve his planned developments, leaving him with cash to spare. To put the money to use, he’s investing more in properties he’s already built, with Meriton owning about 4,000 apartments, an increase from about 500 in 2000.
Meriton declined to disclose its earnings for the last financial year as it is a private company.
Triguboff’s desire to transform the way Australians live – he has been quoted as saying Sydney has “too many forests and parks” and called for a population of 100 million for the nation – has seen him butt heads, most notably with a man he describes as a “great friend:” Carr, the former NSW premier.
“He’s gung-ho for population growth, to grow bigger and bigger,” Carr said in a phone interview. “I have severe reservations.” Harvey Rose, the mayor of the northern beaches suburb of Pittwater, is among those currently resisting Triguboff. Meriton is planning a 16-building development there, nine of which would be five stories. That exceeds the current three-level limit in the area, and the proposed number of units is about three times the current density limit, Rose said. “Meriton’s proposal is totally out of kilter with what Pittwater’s about, and will be opposed by an overwhelming number of people in Pittwater, and all of the council,” Rose said.
Triguboff remains a hands-on managing director, visiting building sites daily. About a dozen people, in charge of construction, planning, property management and other parts of the business, report to him every day with poster-sized sheets detailing progress of their divisions. Triguboff, who doesn’t use a computer, reviews these and adds feedback.
Kent Medwin, one of three winners of the “Win a Week With a Billionaire” competition sponsored by BRW Magazine, shadowed Triguboff in September. He said the biggest surprise was Triguboff’s involvement in the finest details of Meriton projects. “He’s engaged in the color selections and designs, elevations, right down to the fine details, unit layouts, bedroom sizes,” said Medwin, 32, who runs Rock Property, a residential property investor and developer in Hobart. “What he enjoys most is the building process. He’s a builder deep down.” Also on display was Triguboff’s legendary abruptness. “He doesn’t use a lot of words and the words he does use are often four-letter words,” he said. “New staff are probably a bit shocked by it, but most of them seem used to it.”
‘Bigger and Bigger’
Triguboff is married to his second wife and has two daughters, none of whom have any interest in the business, he said. One of his four grandchildren, Ella, 25, holds promise as a potential successor, he said, “but I want her to be involved in more things first.”Until then, Triguboff, who says he’ll never retire – “they’ll have to carry me out” – plans to keep building, making Meriton “bigger and bigger.” He occasionally looks back, visiting apartment blocks the company built decades ago to watch residents go about their lives.
“I just enjoy looking at them,” he said. “I’ve changed Sydney. It’s my city, my people. I’m theirs. We belong to each other.”