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As the Chinese economy grows a whole new generation of investors seeks investment in real estate, both within the country and abroad. Favourite external destinations include the great capitals such as London or New York, but also Australia, which after all is a good deal closer to home for them and right in their backyard.
In 2012 Chinese buyers were thought to have invested about $4 billion in Australian real estate, and the pace is believed to have kept up since.
Local real estate developers in any market love to have a steady flow of foreign buyers, as it helps them to maintain development at often increasing prices, smoothing out some of the interruptions that can otherwise at times significantly disturb the market for their product.
Of course if the infusion of such foreign investors becomes a drug, then the sudden withdrawal of such buyers, as can also happen when trouble develops at home, can then quickly become a major difficulty for them instead. On balance though, developers obviously regard it as much more of a blessing than a curse, and none more so than Harry Triguboff himself, the absolute doyen of Australian high-rise multi family residential development.
As he said a year ago about Chinese buyers “I’ve never experienced any other foreign nationals that bought in that volume and they’ve never bought so consistently, ” adding, “They’re not very concerned about the amount of return, they want to see capital gain”
Well now it seems Harry Triguboff may have received an offer even he can’t refuse, with reports in the Australian indicating he has received an offer for half of his company.
On March 27th, the Australian first reported that Triguboff had been approached by Chinese development firms, interested in investing in his apartment development company Meriton. The report also said he would be traveling to Guang-zhou the following week to meet the, unspecified, potentially interested parties.
“They are bound to want Meriton, ” …“We have the stock, we have the land and the know-how.” He told the paper, adding, “Its not simple to be a builder in a foreign country.”
If you want to sell something in real estate, the best way to do it is to create a buzz, and give people incentives to bid up, so the publicity surrounding his trip was perhaps specifically designed with this in mind. The best thing a developer can do is create an auction atmosphere about any potential realization, and this applies just as much to the corporate level itself as to individual projects.
Accordingly, as part of the routine Mr Triguboff also told the Australian then he was not that interested in selling the profitable company.
Without sons of his own, in recent years the succession has gradually, but inexorably, become an issue for Triguboff – for whom Meriton has been his life’s work. “As long as I am useful, I would like to be there, ” he said. He also noted that his 24-year-old grandson Daniel was working in the business.
However sale of a 50% interest could certainly be a first step to sensible moves to secure the next generation, both within and outside of Meriton itself.
Accordingly we now learn about three weeks after that initial news leak that there may indeed be a deal on the table to sell such a 50% interest, possibly for as much as $3 billion, Triguboff is quoted as saying to the Australian Financial Review’s weekend edition. Australians “would be silly to be afraid of the Chinese” he also told the AFR.
Triguboff says Meriton should make about $300m profit from apartment sales this year.
“I am thinking I could sell part of Meriton, ” adding, “It is very early stages, but I could be prepared to sell the development part of the business and then the family could continue to collect the rent on the units I already own. Maybe I could retire soon and they could run the investment business.”
Triguboff says the company, which carries little debt, is now worth about $6.3 billion. His net worth has been estimated at about $5billion, in the current BRW Rich List.
Meet Harry Triguboff
Harry Triguboff, who today is 81 years old, was born in Dalian, in northeastern China, the son of Russian Jews who fled there after the rise of Lenin. He spent his early childhood in the White Russian Jewish community in Tianjin near Beijing, before arriving in Australia in 1947 to go to school at up-scale Scots College in Sydney, just as the communists were taking over the scene in China as well.
Triguboff later graduated in England with an undergraduate degree in textiles from the University of Leeds in England before working in textile businesses in Israel and South Africa. He returned to Australia in 1960 and finally became an Australian citizen in 1961.
Harry Triguboff got his start in real estate in 1963 when he bought a block of land and built eight apartments in the suburbs of Sydney. Five years later he built another 18 units in Meriton Street, Gladesville, thus starting the empire the corporate name of which today sentimentally still bears the name of the street.
Triguboff has been married twice and has two daughters from his first marriage. He is still married to his second wife, Rhonda; they live in Sydney with his car collection which includes three Bentleys: Hot 1, Hot 2 and Oscar 1 (which is his middle name). The two “Hots” also represent his complete initials.
Apparently he never enters any business partnerships or joint ventures, preferring to hunt alone.
Harry Triguboff is also extremely influential in his Jewish community, where the billionaire has been a frequent donor and significant benefactor to important medical research, religious groups, schools and also numerous projects in the state of Israel.