Meriton to reopen serviced units in economy boost
Multi-billionaire developer Harry Triguboff will stimulate the embattled tourism economy by reopening 10 of his serviced apartment towers in NSW or Queensland each week for the next 10 weeks, but he says people must get back to work.
The Meriton founder, who developed and owns 20 serviced apartment towers in the cities and suburbs of the eastern seaboard and is building a further five towers in Melbourne, Surfers Paradise, the ACT and Sydney, says it is better for his staff, his overheads, and potential guests such as Chinese students for the serviced apartment towers to be brought back to life.
Triguboff, who employs more than 800 office and construction staff, opened his 77 level World Tower Meriton Suites in the Sydney CBD last Saturday, achieving a healthy opening occupancy of about 50 per cent although he conceded room rates were down around 20 per cent.
“If I don’t open my serviced apartments I have overheads I have to pay including land tax and water rates, I have to pay staff … you can’t throw everybody out,” Triguboff told The Australian.
“Generally the occupancies we are getting are 50-60%, that is much better than keeping the serviced apartments empty.”
At the height of the pandemic Triguboff says his offices did not close for a single day. “I said to my staff come to work — for my money I have to see them and they have to see me and see that I am still interested.”
Next week he will reopen his Meriton Suites in Southport tower on the Gold Coast, having closed half of his 20 apartment towers down at the height of the crisis.
During the crisis Triguboff said three blocks of his serviced apartments were taken over by the federal government for quarantine and the government paid the correct room rates.
“I am gradually starting to bring them back, starting with World Square,” said Mr Triguboff, adding that his best serviced apartment performers in terms of occupancies were in the western Sydney suburbs of Parramatta and Homebush.
“We need people to come back to work — it will be difficult.”
Asked when he believed there would be a post-COVID-19 normalcy, Triguboff says: “I believe logic says within six months we will find a vaccine. But besides that we will have to learn to live with the virus. And I think our controls in Australia are very good.”
On the apartment front the development mogul says the biggest surprise of his life is that without the Chinese buyers, the apartment market is still strong.
“The Chinese apartment market will come back because the Chinese people want to be here. (But) our politicians have to learn how to deal with them.
“The market for apartments is improving and the reason is the interest rates are so low. It is cheaper to buy them than to rent but prices have dropped by 20%,” says Triguboff, who estimates he has developed more than 75,000 apartments.
He says apartment prices will rise slowly.
The Meriton Suites North Ryde. Picture: Meriton.
Triguboff says it is amazing that without the Chinese he is still doing well, with strong sales in the Sydney suburbs of Mascot and Homebush, which he attributes to strong public transport infrastructure.
He would not be drawn on the identities of the suburbs where it has been harder for him to shift his apartments but says he wants the apartment investment market to return.
Most of his purchasers are first home buyers. “But I want to bring back the investors. I don’t have enough investors because of this damn virus.
“We will have to get the investors back, the investors have no choice because banks pay no interest and the sharemarket goes up and down. Our property market is steady.”
Asked if he will buy more sites, which would presumably be cheaper after the pandemic, he says: “I have so many goddamn sites I don’t know what to do. You will buy the sites that are cheaper and the stupid councils might start making sense.”
Although he has developed several towers in the Sydney CBD, he has no sites at present because the “prices were crazy in the city”.
On the office front, Triguboff says he has never invested in commercial offices and is glad that he had not.
“The government is always helping home buyers but the office investor is not so important to them,” he says.
He also stepped up his criticism of the federal government’s HomeBuilder package, saying it was clearly aimed at regional home buyers and not city apartment developers.
“The government should give different amounts to different areas — then everybody will have a chance,” he says.
This article originally appeared on www.theaustralian.com.au/property.
