“Highrise Harry” Triguboff is reportedly considering selling Meriton Apartment’s development business to a Chinese developer, in a deal that would net him close to $3 billion. From The AFR:
Triguboff told AFR Weekend he received an offer for his business on a trip to China two weeks ago from the owner of a property developer that builds 200,000 dwellings there annually…
“It is very early stages, but I could be prepared to sell the development part of the business and then the family could continue to collect the rent on the units I already own”…
He [the potential buyer] wants apartments that are able to be sold. Of course there are many Chinese buying in Australia at the moment and what we have is a lot of apartments that already have a lot of approvals. That is why they are interested in me”…
“They do want to be in Australia because it is safe for them, but they can go anywhere they like if they do not make the money here they want. The planning is still too slow here.”
It appears that the Chinese buyer wants to control the apartment supply chain in Australia. That is, be able to develop the apartments, sell to buyers back in China, and collect the profits along the way. All they need now is for the Coalition to allow unfettered access into Australia for Chinese workers as part of a Free Trade Agreement, as muted earlier this week, and the supply chain will be complete.
From a policy perspective, the best thing that Australia could do is free-up planning constraints and facilitate the building of more apartments, including from rival developers. This is particularly important given apartment building has becom a new “export” industry for Australia, with many high-rise developments now targeted at foreign investors rather than local buyers.
The government should also implement a broad-based land tax, so that local citizens can at least capture some of the rents from foreign property ownership, as well as to broaden the tax base and minimise land banking.
