Harry Triguboff cans Meriton serviced apartment complexes

Harry Triguboff to convert up to five proposed serviced apartment towers planned for the eastern seaboard into residential complexes.

Harry Triguboff has taken the difficult decision to convert up to five proposed serviced apartment towers planned for the eastern seaboard into residential complexes. Picture: John Appleyard

In a major blow to the tourism accommodation sector real estate mogul Harry Triguboff has taken the difficult decision to convert up to five proposed serviced apartment towers planned for the eastern seaboard into residential complexes.

The Sydney-based Mr Triguboff, worth around $15.5bn, said the lack of tourists and the dropping accommodation prices had led him to the difficult decision, which will see the removal of thousands of rooms from the nation’s accommodation stocks.

“The serviced apartment prices have dropped by 10-15 per cent and they are not going up,” Mr Triguboff said in an interview on Wednesday night.

In Sydney, Mr Triguboff canned the development of hundreds of millions of dollars worth of Meriton serviced apartment complexes in Pagewood in the city’s southern suburbs, as well as on company owned sites in Liverpool, Pagewood and Carter Street, Homebush, west of the CBD.

While he is proceeding with the construction of a serviced apartment tower in Melbourne, Mr Triguboff said he was also unsure if he will proceed with the development of a fifth serviced apartment tower in Canberra.

“Canberra might go ahead, maybe it will work, we will see,” Mr Triguboff said.

Latest hotel occupancy and revenue data reveals that Australian hotels recorded an average occupancy of just 44.7 per cent last year, down 39.4 per cent on 2019 levels.

Average daily room rates dropped to $163.90, down 11.5 per cent, while revenues per available room slid 46.4 per cent to $73.32 according to the STR data.

“The 2020 occupancy and revenue per available room levels were the lowest for any year on record in Australia,” STR said.

Hotel occupancies fell to just 19.8 per cent during the pandemic low point in April but have since improved.

“In December, each of the three key performance metrics were the highest for the country since February with occupancy at 52.8 per cent, average daily room rates at $189.50 and revenues per available room at $99.98,” STR said.

Mr Triguboff said that by axing the serviced apartments in favour of residential towers “we just felt that we could make more money”.

“Serviced apartment rents were actually dropping before the coronavirus,” he said.

“Now the rents are dropping even more because of the virus. But the government refuses to help the owners,” said Mr Triguboff, adding that when things return to normal there will not be enough accommodation for business and leisure tourists.

“Tourism is a very important industry and as the purchasing power improves because of low interest rates it will be much more important.”

On the residential sale front Mr Triguboff said apartment sales are definitely improving, prices are going up.

“It is not great but they are still going up.”

At present Meriton operates 20 serviced apartment towers on the Gold Coast, Brisbane and Sydney.