The do's and don'ts of the BRW Rich List 2016
Meriton boss Harry Triguboff is pacing around a half-completed apartment complex being built by his company in the Sydney suburb of Rosebery. Wearing a suit and a yellow hard hat bearing the letters HOT – for Harry Oscar Triguboff – Triguboff is at one moment asking workers about the progress of the vegetation planted in the middle of the 233-unit complex. Next he’s inside a two-bedroom apartment, explaining why there’s always space for two lamps in a bedroom. Then he’s showing off Meriton’s latest “wood look” tiles. Minutes later he’s asking a site supervisor why the space at the top of a cupboard is not bigger, after which he admires the wall-hung toilets in the bathrooms.
This is how Triguboff spends most of his weekday mornings. Afternoons are spent at the Meriton headquarters in Sydney’s CBD, where the billionaire meticulously pores over every sale and expense line of the private business he founded in 1963 and still fully owns. Triguboff knows what customers are buying, where and when, how they’re financing their deals and how often they’ve bought Meriton apartments over the years – and there are many repeat customers.
He also knows how many subcontractors are on each site, the cost of the building materials Meriton uses and how quickly or slowly, depending on market conditions, the apartments need to be built. Little escapes his attention.
Australia’s richest person is across all the detail of the property empire he built over 53 years into a giant estimated to be worth more than $10 billion today. And at the age of 83 he has no intention of it ever being any different. Having been a member of the BRW Rich 200 for all the list’s 33 years, Triguboff, the Jewish migrant who arrived from China to finish high school in Sydney in 1948, finally reaches number one this year. His wealth is estimated at a record $10.62 billion thanks to a relentless approach to business that’s equal parts persistence, charm, ruthlessness, stubbornness and pugnaciousness.
“I’ve worked very hard and I still work very hard,” Triguboff tells The Australian Financial Review Magazine. “I like it. I enjoy it. And I think it’s very good for my health, and what’s good for my health is very important to me.”
![After 33 years appearing on the BRW rich list, 83-year-old Harry Triguboff finally snares the top spot. Time to retire, ...](/content/dam/images/g/o/u/i/7/8/image.related.afrArticleLead.620x350.go7hre.png/1464332838624.jpg)
Triguboff has worked hard but he’s also been in the right place at the right time to ride multiple waves; the residential property boom, record low interest rates and a rapid uptick in desire by Asian buyers, based here and abroad, for Australian city apartments. Almost one in five Meriton purchasers are from Asia and up to 70 per cent of buyers overall come from Asian backgrounds.
His place at the top of this year’s Rich 200 also reflects the end of the mining boom and falling wealth of the mining billionaires.
Triguboff’s business strategy has usually involved denying customers a choice of fittings and fixtures for his one and two bedroom units, which typically sell for somewhere between $400,000 and $1 million.
“Our formula was very simple: we had to decide what we were going to build. We didn’t ask them what they wanted, so I was different to those building cottages,” he says. “They wanted to please everyone all the time, asking do you want this and do you want that. Well, that isn’t efficient. And they change their mind. These decisions were very important for the company.”
Today the billionaire owns 6500 apartments that he rents out or operates under the Meriton serviced apartments brand, a number that will soar to 7000 by the end of 2016. Meriton is on track to sell a record $1.2 billion worth of apartments this financial year and contracts have been exchanged for about $1.6 billion worth in the 2017 fiscal year. Over the past five decades Meriton has bought, sold or rented 70,000 apartments in Sydney, Brisbane and the Gold Coast.
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Pressed on whether he ever intends to retire, Triguboff ridicules the very notion and explains how some of his wealthy retired peers have come around to his way of thinking. “I look at when I was 35 and I’d already made a bit of money. The philosophy here in Australia is that if you’d made a bit of money you should slow down, enjoy it. But it is very hard to slow down in my business, because when buildings are half-built, you can’t,” he says.
“When I was 50 I had more money, and they started telling me I was crazy for working hard. When I was 70 they weren’t sure any more if I was crazy or they were crazy. When I was 80 they told me I was a genius because I was still working. They weren’t working and that was terrible.”
Triguboff grooms his grandson
Succession planning, or a lack thereof, has played its part in Triguboff’s strategy and longevity. Triguboff says his daughters Orna Triguboff and Sharon Hendler have never been interested in joining the business. Orna is an academic who holds a doctorate from Sydney University, having specialised in the religious beliefs and disciplines of 16th century Rabbi Isaac Luria of Safed and the study of angels. Sharon married into the Hendler family that owns the Reebok label in Australia. Triguboff’s wife Rhonda, his second, also has little interest in Meriton.
![Harry Triguboff in his Scots College school uniform in 1949.](/content/dam/images/g/o/u/h/y/g/image.imgtype.afrArticleInline.620x0.png/1464306717840.jpg)
He has instead turned to the third generation to groom a successor. Twenty-five-year old grandson Daniel Hendler joined Meriton in 2014 as development and operations manager after finishing university. “He seems to be OK,” Triguboff says. “His personality suits it. His personality needs to be similar to mine, because this business was built on my personality. If he was a snob it wouldn’t work, and he isn’t a snob, thank God. So I hope he will be OK.”
While Triguboff grooms Hendler to one day take his job, should something happen to the octogenarian he now has a structure in place to ensure Meriton endures in its current form. In the past two years Triguboff has appointed several directors to the Meriton board who would manage the company should he die and Hendler not have enough experience to take the top job. Among them are sales director James Sialepis; manager of serviced apartments Matthew Thomas; and director of building David Cremona.
“Then I will have an advisory board, which I’m forming,” Triguboff says. “My vision is the company will always keep functioning without me.”
Triguboff will legally ensure not only that his daughters inherit Meriton but that they have to keep it for some time. “I will make sure the daughters would not sell the business the next day; that would be silly. They would have to settle down and see how it works. Not that they would have to keep it together, but they would have to keep it for a while at least.”
![Harry with his parents, Frieda and Moshe, in Israel in 1951.](/content/dam/images/g/o/u/h/x/x/image.imgtype.afrArticleInline.620x0.png/1464306717730.jpg)
Why Triguboff didn't sell
All this setting up for the future was sparked a couple of years ago, after Triguboff was approached by Chinese property developer Johnson Zhang of the Country Garden group with an offer to buy Meriton. A price of between $6 billion and $10 billion is thought to have been discussed, with an initial offer increased. Triguboff is said to have asked for $15 billion and then ceased discussions, though he insists he did not really want to sell.
“They were very nice people. I just felt that the company would do better without them. There’s nothing wrong with them; they’re very big and successful, but I thought it would create problems. I would have to explain how the business works, and try to explain it to his lawyers and bankers and so on. So I’m very happy I didn’t do it,” he says. “The other question is what I’d do with the money if I had got it. It is not like I’m very diversified, I’m basically in one field. I wouldn’t know what to do with myself and at my age I think it is a blessing to be able to keep working. It keeps your mind working.”
His Rosebery inspection over, Triguboff climbs into his Bentley – number plates HOT2 – and roars a few kilometres away, to a huge vacant site next to the Westfield Eastgardens shopping centre. Triguboff greets the site manager like an old friend and the pair share a cigarette. It’s a sunny autumn day but there are only a few workers on the block, which only recently had water and electricity connected. Meriton will build a whopping 2200 apartments here. Triguboff has offered the NSW government funding to extend a light rail line to the site that is currently planned to terminate in Kingsford.
![“I stayed private. I didn’t see any advantage in being a public company.”](/content/dam/images/g/o/u/h/z/2/image.imgtype.afrArticleInline.620x0.png/1464306717957.jpg)
Meriton has been on a spending spree over recent years, buying up sites mostly across Sydney, even placing newspaper advertisements asking for prospective sellers of land to get in touch. Pagewood Green next to Eastgardens will be built over six stages; a long-held Meriton strategy that allows apartments to be drip-fed onto the market. That way, construction can be sped up when buyer demand is high and slowed down when it isn’t. Triguboff can also still build and keep apartments to let out in what is a good rental market.
“If times are bad you buy land and by the time you have finished building times are good again.”
Whether such a virtuous circle can continue is a question hotly debated in Australia these days. On top of general talk of a looming property downturn and an apartment glut, there are worries banks will not lend the full contracted price to buyers if they decide the value of a completed unit has fallen since an off-the-plan price was agreed. If this starts happening, it could lead to buyers defaulting on their purchase. Higher taxes have also been introduced for foreign buyers.
Should a property downturn set in, 2016 could end up being the only year Triguboff is number one on the Rich 200. His retort is that if the banks cause problems he’ll simply offer vendor finance himself, lending buyers the money to purchase their units. That’s not quite as suresafe as it sounds, given he would then wear any defaults, but Triguboff remains upbeat. “Maybe it is slowing down for some, but not for me. And so far, people are settling on their contracts – we are not having any problems yet.”
Learning on the job
Much of Triguboff’s strategy and style can be traced to the business lessons he learnt during the tough 1970s. The property developer was born and raised in China, where his family lived in what is now Dalian after fleeing persecution in Russia. Life was good in China but with Communism spreading after World War II Triguboff was sent to Sydney to finish high school at the prestigious Scots College.
He remembers being struck by Sydney’s tall buildings upon arrival, a stark contrast to the lack of high-rises back in China. After finishing school he studied for a textiles degree in Leeds in England’s north. By then his family had settled in Israel and Triguboff moved there and started a carpet factory. The venture was successful but Triguboff did not work well with his father and brother. He moved to South Africa for a year while convincing Australia’s immigration authorities that he should be allowed to move back to Sydney.
It took a year but Triguboff arrived in 1960 with some savings and became a citizen a year later. He worked in a few jobs, including owning a milk run in Chatswood and running a fleet of taxis. He then bought some land in Roseville on which to build a house but the builder struggled. Triguboff took charge of the project himself.
He had the taste for construction and next bought land in Tempe, near where Sydney Airport is today, for £17,000. He built eight two-bedroom flats and sold them at an excellent profit. Triguboff says the foreman was unreliable, which forced him to take charge, giving him a quick lesson in dealing with subcontractors and other facets of the building game.
More projects followed, including one in Meriton Street, Gladesville. It was 1968. Eighteen units later, Triguboff had a name for his property group. In 1969 he floated Meriton Properties on the stock exchange, but by 1973 he’d bought back all the shares, at a higher price than they were issued at.
“It was a waste of time. To grow for the sake of growing was not for me. So I stayed private. I didn’t see any advantage in being a public company.”
Life was good and the business was growing, but in 1974 a credit crunch hit hard, teaching Triguboff one of his biggest lessons: never trust the banks. “The big problem here was [borrowing] money. Then the Americans came here, Citibank. They came to me and said, ‘Harry, you deal in bricks and we deal in money. We will come to you with money.’ I never heard of that from our banks.”
Yet Citibank struck trouble back in the US, and after funding Meriton’s rapid growth Triguboff was asked to repay the money – quickly. “I said, ‘How can I pay you back? There’s half-finished buildings there.’ But we kept them at bay and I ended up paying every penny back,” he says.
“There was big pressure. They put pressure on me, the wife put pressure on me. Everyone put pressure on me. But I had the time of my life, I got out of all the problems. I won them over and I showed them there was enough to pay them back and I had every intention of paying them back. And I did. You find a way.”
Triguboff never borrowed in big sums from the banks again. Meriton has provided hundreds of millions of dollars in financing for buyers over the years and, in March, when Triguboff wanted money to buy more sites, he revealed he had sold $600 million worth of his “older” apartments.
Union troubles, and solutions
The 1970s were also marked by battles with the unions, a troubling time for Triguboff until he hit upon the idea of providing constant work for subcontractors and labourers in an effort to keep them occupied – and therefore content.
“In those days it was hard. They told me they’d shoot me and that sort of thing. Now I’m laughing but it wasn’t that funny,” he says. “I remember going to Trades Hall but leaving with my back to the wall so I could see what they were doing. Another time I knew they were going to stop me [building] early in the morning. So we got the bouncers from Kings Cross. But they were armed, the bastards, and the bouncers looked at them and ran away. It never came to fighting but it was tense, very tense. But I always made sure they had work.”
Meriton really boomed in the heady 1980s, including moving into the Gold Coast – where Triguboff still keeps an apartment – and later, Brisbane, where he also spends time. He’s stayed away from Melbourne on the basis that he doesn’t want to stray into a market he won’t spend much time in personally. But Sydney is the city whose skyline he has most seriously changed – to its detriment, according to some. Paul Keating reportedly had Triguboff in mind when he talked about the “disfiguring eczema” of modernist design spreading across his city.
Sydney architect Andrew Andersons says the quality of Meriton’s apartments has improved in recent years, citing a tower designed by the late Harry Seidler which opened on George Street in 2006, and the Infinity project in Brisbane. “I’ve seen that Brisbane building and I wished we had buildings like that in Sydney,” Andersons says.
Council clashes
Triguboff is also notorious for his relentless battles with councils, railing against them for their supposed slowness in approving his developments and generally getting in the way of progress. He says he told Prime Minister Malcolm Turnbull, whose wife Lucy was once Sydney lord mayor, that most of the country’s problems could be sorted out if councils were fixed.
Triguboff has had legendary battles with Sydney mayors Frank Sartor and Clover Moore over the past two decades. One anecdote had Triguboff calling Sartor one day, blasting him for about 20 minutes straight without the then mayor being able to get a word in. Eventually Sartor asked Triguboff exactly what his complaint was, only for the billionaire to tell him to “get stuffed” and hang up, with Sartor still none the wiser.
Another time, Triguboff called Sartor’s office and was unable to get past the receptionist, who was reduced to tears by the Meriton boss’s outburst. Sartor called Triguboff and told him the pair would never meet again, no matter the subject, unless Triguboff apologised with flowers. Shortly afterwards Triguboff appeared in the mayor’s office, handing over the flowers while grudgingly saying: “The lord mayor told me to buy you these.”
He does have an altruistic side and has donated tens of millions of dollars to health research, having survived bowel cancer, and Jewish causes in Sydney and Israel. Triguboff stepped in to save the Yeshiva school in Sydney in 2012 when it was labouring with $10 million debt, and backed a scheme to help Russian Jews moving to Israel settle and gain legal recognition. His latest scheme in Israel is building technical colleges for Arabs to study building and construction.
Despite his temper, many staff and workers have been with Triguboff for decades and see him regularly striding around the building sites. “You must be able to talk to everybody in the company like you talk to your friends,” Triguboff says. “Even though they will tell you I do what I want to do – and, yes, I do – I also listen to other people. I really do. It doesn’t mean I do what they say, but I will listen. I pay them money so I should listen, otherwise I’m stupid.”
John Symond, the founder of Aussie Home Loans, first came across Triguboff as a young law clerk in Sydney’s Bankstown in the early 1970s, when Symond attended the weekly Meriton sales meetings to help draw up contracts and sort out financing after the weekend sales.
“Harry was fearsome and we were all terrified of him,” says Symond. “The salesmen would all have to say how many deposits they took on the weekend and they’d all usually say one or two. One young guy once said three and Harry strode up to him, stood nose to nose and screamed how he’d disrespected him. Harry thought he’d probably got the pricing wrong as they sold so quickly, so made him cancel the contracts.
“But he’s built tens of thousands of apartments and he’s created thousands and thousands of jobs over that time. So many people have stuck with him. And his buyers have done very well from him. Look at him now, still turning up every day. I really admire him.”
It’s that drive and determination that finally sees Triguboff atop the Rich 200. “We are lucky there has been a boom, that’s helped,” he says. “But now is a special time. I’ve got there after many years.”
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How three young property developers can defy the downturn