Real Estate

Boom Goes On for Australia's Billionaire Developer


Australia, with one of the fastest-growing populations in the industrialized world, faces a shortage of 200,000 dwellings a year and a spirited debate over immigration. Billionaire property developer Harry Triguboff thinks the population, now 22 million, isn't growing fast enough: He'd be happy if it increased nearly fivefold by 2050. "I'd like to see 100 million, because I believe we will have many things to do here besides drilling holes and selling coal," Triguboff told Australian Broadcasting Corp. Television earlier this year.

Triguboff has no doubts about how best to accommodate the influx of new citizens: apartment developments. He's been building them since 1963, when most Australians dreamed of owning a house on a quarter-acre lot. "I looked around and I saw cottages everywhere," the 77-year-old says of his decision to start building. "I thought it was time they lived in apartments."

Since then, his closely held Meriton has grown to be Australia's biggest apartment developer, providing units for more than 150,000 people. In Sydney (population: 4.5 million), about three in every 100 people live in an apartment that Meriton built. Some local governments complain their suburbs have become overcrowded because of his developments.

Triguboff's strategy is simple: He puts up the tallest apartment buildings he can get approval for in suburbs where people can afford them. Demand isn't an issue. Australia is experiencing 1.8 percent annual population growth, vs. 1 percent in the U.S. and 0.1 percent in the European Union. Right now, the average home in Australia costs 6.8 times annual median household income, more than double the U.S. ratio of 2.9 times, according to Demographia's annual International Housing Affordability Survey. Home prices in eight major cities surged 18.4 percent in the year ending June 30, according to the statistics bureau. "He delivers units affordably priced, close to the city center or near railway stations, and he does it on a bigger scale than anyone else," says Bob Carr, a personal friend who opposed some of Triguboff's building plans during his 1995 to 2005 stint as premier of New South Wales state. "He's giving people a choice."

Triguboff's quest to change the way Australians live is accelerating as Meriton embarks on some of its largest projects to date. They include the 77-story Infinity, Brisbane's tallest residential building, and the 2,000-unit Victoria Square apartment development in Zetland, a Sydney suburb. Where rivals such as Australand and Stockland, Australia's biggest diversified property company, have retreated as debt costs spiked during the financial crisis, Meriton has been able to take over a bigger slice of the apartment market by financing projects internally and by targeting a recession-resistant part of the market. "He correctly anticipated that demand for his kind of apartments, those affordable to the average home buyer, wouldn't slacken," says Aaron Gadiel, chief executive officer of the Urban Taskforce, a developers' industry group.

Triguboff is Australia's fifth-richest man, with a fortune of about A$4.2 billion ($4.14 billion) according to BRW magazine. He was born in 1933 to Russian Jews living in Dalian, China, and came to Australia with his family in 1948. He took a loan to buy his first block of land in 1963 in Tempe, an industrial suburb of Sydney under the flight path of the nation's busiest airport, and built a unit with eight apartments, learning the construction process on-site. Triguboff says he had enough assets to cover all Meriton's debt by the 1980s, and by about 2000 his company was debt-free and funding its own projects. Meriton declines to disclose its earnings.

Triguboff continues to draw criticism. A project involving a 16-building development in Pittwater, a suburb in Sydney's North Beaches' district, exceeds local height and density limits, says Mayor Harvey Rose. "Meriton's proposal is totally out of kilter with what Pittwater's about and will be opposed" by citizens and the city council, Rose says.

Triguboff, meanwhile, plans to keep building. "I've changed Sydney," he says. "It's my city, my people. I'm theirs. We belong to each other."

The bottom line: By staying debt-free and focusing on a reliable part of the market, Triguboff survived the financial crisis and continues to build.

Saminather is a reporter for Bloomberg News.

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