What makes Harry Triguboff so spectacularly successful? Craig Turnbull
GUEST OBSERVER
Since 1983 I have been fascinated with the annual BRW Rich 200 list and the people who made the list.
Upon reading it for the first time, I realized that many of them made their money in property or stored their wealth in real estate. I figured if it was good enough for them, then property would be for me.
This year, for the first time, 83 year old Harry Triguboff, a Chinese born son of Russian immigrants, became the first residential developer to top the list with an estimated wealth of $10.62 Billion. Not only did Mr Triguboff top the list, but of the remaining 200, 53 have made their fortune in property, with around another 15 or so having made their money in another industry and then ploughed the wealth in to real estate.
Harry Triguboff arrived in Sydney in 1948 to study, immediately noticing the tall buildings, so lacking in his native China. He then studied for a textile degree in England, before moving to Israel with his family and started a carpet factory. He decide to return to Australia in 1960, becoming an Australian citizen in 1961.
He started a few small businesses including a milk bar and a fleet of taxis before constructing a house in Roseville. He was disappointed with the builder and moved in to complete the job himself. More profitable residential projects followed, including one in Meriton St Gladesville in 1968 – he had the name for his new property business. Meriton floated on the ASX in 1969 before Mr Triguboff bought back all the shares in 1973, saying he thought there was no advantage in being a public company.
Backed by Citibank, Meriton underwent huge growth in the early 1970’s before the credit crunch of 1974 arrived and the banks called in his loans. It was one of the toughest times in business career, teaching Mr Triguboff to not trust the banks. He found a way to pay them all back and to this day he does not borrow in big sums from banks. He recently sold $600M worth of older apartments to get the cash to buy new sites rather than borrow from the banks.
Mr Triguboff famously fought battles with the unions in the 1970’s and more than once butted heads with local councilors and mayors who he saw as slowing him down building more apartments. He once told our current Prime Minister Malcolm Turnbull that most of the country’s problems could be sorted out if the councils were fixed.
This year Meriton expects to sell a record $1.2 Billion worth of apartments, while contracts have been exchanged for $1.7 billion of 2017. Over the years, Meriton has bought, sold or rented 70,000 apartments, while they have retain 6,500 that he rents out under the Meriton serviced apartment brand. Mr Triguboff says he has little concern his business may face difficulties due to what could be a looming oversupply of apartments.
Indeed when the banks announced that they would stop lending to overseas buyers, Mr Triguboff announced he would provide vendor finance to all buyers who had a 20 percent deposit. This is important since 70 percent of all Meriton buyers are from Asian backgrounds.
Mr Triguboff recently turned down an offer from Chinese interests to buy his company for between $6-$10 billion. He said that he wanted $15 billion, and if he did sell, he would not know what to do with himself everyday or what to do with the money.
What makes Harry Triguboff so spectacularly successful?
⦁ He works hard – he still goes to the office 5 days a week and can be seen every morning out on his building sites, questioning his team and looking through the construction.
⦁ He likes his work – Triguboff says he “loves it, enjoys it, thinks it is good for my health.” He shows no signs of wanting to slow down, which is different to the prevailing philosophy here in Australia, that when you make it, slow down and retire to enjoy life.
⦁ He knows what he is trying to achieve – Triguboff says “I tried all my life to make housing affordable. The more affordable the house, the more money I make. I deal in volume. To sell volume, it must be affordable. So that’s my whole life, is to make it affordable.” One of the ways he does this by not offering choice in fixtures & fittings to his buyers, which he believes is more efficient.
⦁ He thinks long term – he understands property moves in cycles, saying “if times are bad, you buy land and by the time you have finished building times are good again.”
⦁ He focuses on the detail – he is across all facets of his business, including the cost of building materials, the number of sub-contractors on each site, the market conditions and how many apartments he needs to build.
⦁ Single-minded – all Triguboff does is build residential apartments, his way. In the early years he realized that the best thing he could build was two level apartments because no one wanted to walk up to three levels and compulsory lifts became too expensive. Now he build high rise only in Sydney or the Gold Coast, places where he spends time. So he knows his markets.
⦁ He listens to his team - Triguboff has had a reputation for ruthlessness, once screaming at one of his sales reps who sold three contracts over a weekend, making him tear up the deals because he thought the rep had sold them too cheaply. While he says he still does what he wants to do, his philosophy is that he is paying good money to his team, so he should listen to them otherwise he is stupid. He also says “you must be able to talk to everyone in the company like you talk to your friends.”
⦁ He is generous – a long time philanthropist, he provides millions of dollars each year in financial support to many causes including health research, sports, and Jewish causes in Sydney & Israel.
Mr Triguboff, like many of his contemporaries such as Frank Lowy, arrived in Australia after World War II and proceeded to build their fortunes.
I take my hat off to him and what he has achieved.
I trust that I can be as active, happy and loving what I do each day when I reach age 83.
Craig Turnbull is an author, property developer and real estate investor. He can be contacted here.