Debt-shy property billionaire Harry Triguboff says he’s ready to borrow

Harry Triguboff’s Meriton group plans to begin borrowing for the first time in 12 years as the apartment developer expands its construction pipeline next year.

Meriton plans to build around 2,000 apartments next year up from about 1,700 in 2012.

“I haven’t borrowed yet, but I will,” billionaire Harry Triguboff, the company’s 79-year-old founder and managing director, said in an interview with Bloomberg.

“The RBA has cut rates and there’s pressure brought on our money market by foreign banks bringing money here.”

Meriton has been debt-free since 2000, funding its projects through sales of apartments and rental income, Triguboff said. The timing and amount of debt funding depends on sales and approvals of new projects, he added.

Australia’s long-term borrowing costs are the cheapest in the developed world relative to short-term rates, as bond investors expect the RBA will cut its 3.5% benchmark rate by another 101 basis points in the next year.

Four of the seven foreign bank licenses the central bank has granted since 2010 have been to Asian lenders, the RBA recently noted, a key apartment-buying market for Meriton.

Triguboff added that he has no plans to extend Meriton’s geographic reach beyond Sydney, Brisbane and the Gold Coast – in the 2012 financial year Meriton will build 1,167 apartments in Sydney, a 57% jump from the previous year.

Meriton’s biggest project is the 81-story Infinity, Brisbane’s tallest residential tower which is due for completion in late 2013.

Meriton has sold 150 of the 550 units at Infinity, with plans to keep 250 as serviced apartments – a growing component of the Meriton business.

Earlier this year Meriton completed the 74-floor Soleil, also in the Brisbane CBD of which only 5% of the 464 apartments remain unsold.

For advice on navigating hotspots, download our free eBook: Tools for Getting Through the Hotspot Maze. This article first appeared on Property Observer.


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