Debtless Meriton halts Sydney apartment site buying spree as it seeks to sell 700 older apartments: Harry Triguboff

Meriton has enough development land in its Sydney war chest for now and will not buy any more development sites unless the deal is “very attractive”, according to founder Harry Triguboff.

Australia’s biggest apartment builder has acquired six sites in Sydney this year at a combined cost in excess of $200 million.

The sites have the capacity for 2,000 apartments worth around $1.3 billion.

“We will only buy more land now if we consider the deals are very attractive,” said Triguboff in a report in The Australian.

“We have enough stock of land to develop and it is not necessary to take on debt.”

Meriton most recent development site purchase was a $21 million acquisition of a former industrial property in Rosebery in inner south-east Sydney with plans to build 200 apartments.

Triguboff’s biggest site acquisition this year was in Chatswood on Sydney’s north shore, with approval for 547 apartments. Meriton paid $50 million for the Thomas Street car park with plans for two towers of 29 stories each, one of which will be retained by Meriton as serviced apartments – a growing part of the Meriton business.

Other acquisitions included $48.5 million spent to acquire the controversial Lewisham Estates development site which has amended potential for between 377 and 430 units.

Meriton has also acquired sites in Talavera Road in North Ryde (423 units), South Dowling Street, Zetland (400 units) and McEvoy Street. Waterloo (200 units)

As it prepares to embark on its new building program, Meriton is also seeking to sell around 700 of its older Meriton apartments, some up to nine years old.

Meriton receives the full purchase price on older units immediately but must wait until new projects are completed to receive full payment on new apartment sales.

Older apartments up for sale include 400 units at South Dowling Street, Waterloo (priced around $600,000), 100 waterfront units at Abbotsford (around $650,000) as well as 170 units on the Gold Coast (around $420,000).

Triguboff expects interest rates to fall further making it cheaper to buy an apartment then rent.

He says borrowers can source variable loans as low as 5.5% well below the advertised variable rates of the banks at around 6.5%.

He expects rates to fall to around 4% and says rents are not rising.