Finance squeeze on unit buyers amid rental market surge: Triguboff

Harry Triguboff says he is providing more finance to his buyers as his latest accounts show that his massive property portfolio is spinning high returns.

Meriton buildings at 180 George St Parramatta.

Apartment buyers are more price conscious, finance is tougher to acquire, but the rental market continues to surge.

The nation’s largest private apartment builder Meriton founder and chief executive Harry Triguboff, worth $26bn, opened up about the true state of the residential market this week noting that renting apartments is easier than selling.

“I rent 100 apartments a week on the Gold Coast and in Sydney,” Mr Triguboff told The Weekend Australian.

“I have new apartment blocks in Sydney’s Homebush and Pagewood, about 250 units in each block, it took me about four months to lease them. I don’t have holding charges because they go so fast.

“The selling of them is not as good, not as fast, finance is very difficult for people, so I give my own finance. I have been doing that for 50 years. I have been giving finance for my blocks, not for anyone else’s.

“These days people (buyers) are very price conscious.”

On the serviced apartment front – Mr Triguboff owns 23 such hotels and has only one serviced apartment in Melbourne, a city which is suffering from dire oversupply and lack of room rate growth.

Iconica on the Gold Coast is a Meriton complex.

“My serviced apartments get better every year because I spend money. It’s very important,” Mr Triguboff said.

Meriton reported a fall in operating profit before tax from about $414.9m in 2003 to $244.8m last year, as some costs increased, according to its latest financial accounts, which have just been lodged with the corporate regulator.

But there was only a 1 per cent decrease in cash profit before income tax as the company still delivered an overall sum of $574.7m. The sizeable profit showed the company is still highly active despite its apparent lack of confidence in the NSW planning system.

The number of units it completed was up 73 per cent from 2023 and the number of units commenced leapt by 163 per cent on that period, the company said.

Meriton disclosed that it had continued to exhibit strong growth during the last financial year – which was marked out by many developers struggling to get projects off the ground as costs and interest rates increased.

Meriton said that its growth was expected to continue into this financial year

The company said that its growth was expected to continue into this financial year, as it is also growing its real estate annuity income streams, as it holds on to select apartments, as well as serviced apartment complexes, in its new projects.

This has effectively made Meriton the country’s largest residential landlord – putting it well ahead of the newer build-to-rent developers that are now building projects.

Meriton cited a 4 per cent increase in the number of investment units it holds to 15,069 units, which includes the country’s largest serviced apartment empire.

The company also expects residential sales revenue to grow in future years and said it was undertaking a “substantial increase” in construction activity.

In a sign that it is stepping up activity, particularly in Queensland, Meriton said there was a 6 per cent increase in the number of units in various stages of development, with its pipeline of work amounting to 10,654 units. At the end of June, the company said it expected to spend $3.5bn in future on development activities on jobs that were underway.

Meriton had a 9 per cent per cent lift in revenue to $1.6bn, and, notably, there was a 17 per cent jump in annuity revenue to $888.8m as it reaps the income from its investment holdings.

As well as the 23 serviced apartment complexes, it has 32 build-to-rent apartment blocks and 34 retail shopping precincts in operation. Meriton also has 20 child care centres and a further ten are under construction and in planning.

The company’s accounts showed it would continue to spin off a solid income, regardless of the timing of it taking on new projects. In a sign that residents and commercial tenants are still paying rent on time, arrears for last year were at just 0.3 per cent of rent received.

Originally published as Finance squeeze on unit buyers amid rental market surge: Triguboff