Meriton founder Harry Triguboff bullish about outlook for Sydney, Gold Coast apartments

Apartment magnate Harry Triguboff has a message for anyone who thinks property values won’t keep rising - they will.

Real estate mogul Harry Triguboff says sales are strong everywhere. Picture: Nick Cubbin

Apartment magnate Harry Triguboff has a message for anyone who thinks property values won’t keep rising: they will.

The real estate developer, whose Meriton empire has grown from its Sydney base to major holdings in Queensland and into Melbourne and Canberra, is bullish about the longer term prospect of apartments.

“At the moment the outlook for the market is weak, but rents are very strong – they dropped a lot but they are back to high levels,” he said.

Mr Triguboff’s Meriton operation is the foundation of his $20.8bn fortune, making him the country’s wealthiest property developer and placed 6th overall on The List – Australia’s Richest 250 – which reveals the critical role that private capital is taking in developing new residential and commercial projects.

And Triguboff’s operation is still expanding as he has been buying in Sydney for the next cycle. Over lunch this week the multi-billionaire confided that he is also looking to acquire a third site in Surfers Paradise where demand for apartments in his Ocean project, a 77-level tower, which is under construction is strong.

The tycoon is best known for his residential apartment complexes but a shift more than a decade ago into serviced apartments is also paying off. He is the largest owner in the country at a time when the market is rebounding.

“Serviced apartments are very strong for us particularly in Surfers Paradise and Parramatta in Sydney. Parramatta is the best in Sydney, but we are also going very well in North Sydney,” Triguboff said.

Despite lower auction clearance rates across much of the country his apartments are selling well.

“Sales are strong everywhere, it was built up a lot, now it has weakened slightly. The prices went up a lot, they are now settling – there is a tremendous amount of building, we have not seen building at this scale at the best of times,” he said.

But it is not all smooth sailing, with a lack of tourists making it harder to lease out the retail outlets in the ground floor of his Meriton towers.

“Generally, the big problem is with shops in NSW and Queensland, there are no tourists,” Triguboff said.

The design of his first beachfront tower planned for the 73-level Ocean project.

Industry forecasters are warning about a looming shortage of units prompted by the disruptions to building and supply chains caused by the pandemic. A series of large builders have gone broke and large city projects are still hard to stack up in the face of rising costs.

But Mr Triguboff is able to finance his own projects and Meriton keeps a lid on costs by building most complexes itself. He also has the capacity to hold apartments and rent them out in what is a growing part of his business.

Meriton is building 3000 apartments at present and has gone out and hired a Melbourne builder to construct its new Melbourne serviced apartment complex.

“It’s hard for us to go to another city,” Mr Triguboff said.

The property industry is also battling against the threat of rising interest rates and banks taking a hard line on investors. Triguboff says that he is serving both markets, albeit in different parts of the country.

“Apartment prices have peaked, but they have dropped off a bit, there are more investors in Surfers than in Sydney. In Sydney we have the home buyers,” he said.

And he’s not that worried about the prospect of rising interest rates, which are still very low on an historical basis.

“I don’t think interest rates will go up too high but they will go up,” he said.

The tycoon’s strategy of driving through the coronavirus crisis is being adopted by other wealthy property players.

Tycoon Lang Walker kept going and is now close to completing his $3.2bn Parramatta Square project in Sydney’s west.

And he is already restocking for the next boom even in areas which seem bleak.

He is teaming up with Abacus Property Group to propose a new $750m office complex in Melbourne’s now deserted Docklands district.

But they are optimistic that workers will return and large buildings will come into vogue again. Walker is already into a $3bn project with the SA government in Adelaide and is undertaking a $2.5bn rebuilding of the CBD at Maroochydore on Queensland’s Sunshine Coast,

For many of the wealthiest property players the race never stops.