Billionaire Triguboff’s Meriton Seeing Global Fund Interests

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Meriton Pty, Australia’s biggest apartment developer, said pension funds from Canada and the U.K. and Chinese investors have shown interest in the closely held company.

Meriton received approaches from bankers representing foreign investors seeking to buy all or part of the builder, said Harry Triguboff, its billionaire founder and managing director, declining to identify the potential buyers.

Triguboff celebrated his 80th birthday last month amid speculation about the future ownership of the Sydney-based company. The Australian Financial Review reported Meriton had caught the eye of an Asian investor, without citing sources. Rising demand for apartments as Australians prioritize convenience and affordability over space is drawing Asian builders such as Singapore-based Fraser & Neave Ltd. (FNN), Malaysian SP Setia Bhd (SPSB) and Hong Kong’s Far East Consortium International Ltd. (35), to the country.

“There are Canadian super funds, English super funds, and Chinese of course,” Triguboff said in an interview in Sydney on April 12, using the local term for pension funds. “But I’m in good health and my grandchildren are growing up.”

The Chinese-born son of Russian-Jewish immigrants said he is looking to his grandchildren for a successor. He denied speculation of a reverse takeover by his company of Australia’s biggest listed housing developer, Stockland (SGP), which was reported by the Australian Financial Review in February.

Seeking Successors

His granddaughter, Ella Lankry, marketing director at Meriton -- who he said in a 2010 Bloomberg interview held promise as a potential successor -- isn’t interested in management, he said. A second grandchild, who will finish university this year, may be a contender, he said.

Triguboff, whose company last year built 1,700 apartments New South Wales and Queensland states, was Australia’s sixth richest man, worth $4.6 billion, according to the Forbes ranking of the nation’s 50 richest, released in January.

Meriton will continue to sell half the apartments it builds, keeping the rest to rent as serviced apartments or long-term accommodation, Triguboff said. That strategy has led it to seek loans for the first time since 2000, he said.

The company has borrowed A$130 million ($136 million) from Australia and New Zealand Banking Group Ltd., he said.

“People are renting more now,” he said. “It’s much cheaper to do that than to buy an apartment.”

Rental Apartments

Rental apartments had an average gross yield of 4.9 percent across Australia’s major cities in March, compared with 4.1 percent for houses, according to Brisbane-based researcher RP Data. Home loan approvals for investors jumped 11 percent in February from a year earlier, statistics bureau data show. The number of approvals to first-home buyers dropped 19 percent over the same period, the figures show.

Meriton will begin work in six months on 1,200 apartments and a shopping center on a site in Mascot, a suburb close to Sydney’s international airport, Triguboff said. It plans to start in two years another 300 units at a site in Homebush, some 14 kilometers (8.7 miles) west of Sydney’s center, he said.

The company, whose business is limited to New South Wales and Queensland states, expects to spend about A$150 million to buy land this year in Sydney, Triguboff said. He has no plans to buy in Queensland, he said.

“In Sydney, we always have a deficiency of housing,” Triguboff said. “So that’s one good thing, which will cause real estate to keep going up. Not fast, but it’ll go up.”

Australian home prices will climb as much as 7 percent in Perth and Darwin, 5 percent in Sydney and Brisbane and 3 percent in Melbourne and Canberra, researcher Australian Property Monitors forecasts.

Triguboff said he has no plans to attempt a public listing again. Meriton listed on the Australian stock exchange for 1 1/2 years in the early 1970s before the billionaire bought the shares back.

“If it’s good, I should keep it,” he said. “If it’s bad why should I cheat them?”

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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