Harry's heir

Alan Kohler on Triguboff's suc­ces­sion

The Australian - The Deal - - Front Page -

AT 82, Harry Triguboff fi­nally has a pos­si­ble fam­ily suc­ces­sor for his $15 bil­lion (he says) apart­ment de­vel­op­ment busi­ness, Meri­ton – his grand­son Daniel Hendler.

By the way, if he’s right, and Meri­ton re­ally is worth $15bn, then Triguboff is Aus­tralia’s rich­est per­son, just pip­ping iron ore mag­nate Gina Rine­hart ($14bn). That’s an ex­act mi­cro­cosm for what’s hap­pened to Aus­tralia: the apart­ment con­struc­tion boom has taken over from the min­ing boom as the key driver of the Aus­tralian econ­omy.

The fact that the Triguboff suc­ces­sion has skipped a gen­er­a­tion has meant that un­like most fam­ily busi­ness founders, Harry hasn’t been forced out of busi­ness and into re­tire­ment by his chil­dren, which is fine by him.

Triguboff was born in Dalian, in north­east China, the son of Rus­sian Jews who fled Rus­sia af­ter the Bol­she­vik Revo­lu­tion in 1917. He spent his early years in China be­fore em­i­grat­ing to Aus­tralia and an ed­u­ca­tion at Scots Col­lege in Syd­ney.

He started out in the rag trade in Is­rael and South Africa be­fore re­turn­ing to Aus­tralia in 1960 and be­com­ing an Aus­tralian citizen in 1961 – in the depths of a re­ces­sion. He did odd jobs, in­clud­ing taxis and a milk round. He bought a block of land in Ro­seville to build a house and hired a builder, who turned out to be a dud, so he sacked him and fin­ished the job him­self. That’s when Harry Triguboff got a taste for prop­erty de­vel­op­ment.

He bought another block in Tempe and built eight apart­ments,

“No one does more work than me. I work harder than any­one else. That's OK when you're 30, but it's dan­ger­ous when you're over 80”

which fi­nanced another block and, this time, 18 units. More im­por­tantly, this one was in Meri­ton Street, Gladesville, and that was the name he used for the com­pany he reg­is­tered in 1968. Forty-seven years later Meri­ton Group has built more than 55,000 apart­ments. It’s not only Aus­tralia’s largest apart­ment devel­oper, it’s also the na­tion’s big­gest home builder.

When most oth­ers of his age – apart from Ru­pert Mur­doch – are in the gar­den or an aged-care fa­cil­ity, Triguboff is still work­ing full-time, by which he means all the time, non-stop.

“No one does more work than me. I work harder than any­one else,” he says. “That’s OK when you’re 30, but it’s dan­ger­ous when you’re over 80.”

Which is why he started ne­go­ti­at­ing to sell the busi­ness last year to Chi­nese devel­oper, Jonathan Zhang. That deal fell over, and Meri­ton is off the mar­ket. It’s not en­tirely clear whether it was just be­cause they couldn’t agree on price, although they couldn’t – Zhang of­fered $6 bil­lion, Triguboff ini­tially wanted $10 bil­lion – or whether Triguboff pulled out be­cause his grand­son Daniel had turned 24 and had fin­ished univer­sity, and was there­fore ready to come into the busi­ness, or, thirdly, be­cause Harry sim­ply didn’t know what he would do post-Meri­ton. In fact it was prob­a­bly all three.

“I didn’t know what I was go­ing to do with my­self,” he says. “I thought of go­ing into wa­ter – build­ing dams – but that’s not a sim­ple thing. I talked to the NSW gov­ern­ment. That was a waste of time. I talked to the Queens­land gov­ern­ment. They were very nice, but it was too com­pli­cated, try­ing to get all the ap­provals to build dams and make sure Aus­tralia had a steady sup­ply of wa­ter.”

As for Meri­ton’s selling price, Triguboff be­lieves it’s ris­ing rapidly this year be­cause of the boom in Syd­ney hous­ing, es­pe­cially apart­ments, and it’s just as well he didn’t sell last year. He be­lieves the value of the busi­ness has now gone up from $10bn to $15bn.

“It’s not be­cause of house and apart­ment prices, which have stopped go­ing up now – the boom is over – but be­cause of de­mand, which is now very big, and only be­cause of China. De­mand is much more im­por­tant than price.”

So if he’s not go­ing to sell Meri­ton, ei­ther be­cause he couldn’t get what he thinks it’s worth or be­cause he can’t find any­thing else to do, then it’s time to think about the or­gan­i­sa­tion’s staff and struc­ture, and about suc­ces­sion. So a few months ago he gave his grand­son, Daniel, son of Sharon Hendler, nee Triguboff, a block of land and told him to build some apart­ments.

“He went and got the money from the bank, which is the hard­est thing to do in this busi­ness,” says the proud grand­fa­ther. “He’s very bright.”

Daniel is also work­ing in Meri­ton, the first and so far only Triguboff de­scen­dant to do so, and is now learn­ing the de­vel­op­ment busi­ness from his grand­fa­ther: “I’m teach­ing him what I do”. Triguboff has also cre­ated a man­age­ment struc­ture for the com­pany for first time, mak­ing it “stronger in man­power”, he says. He has ap­pointed a di­rec­tor of build­ing, David Cre­mona, a di­rec­tor of sales, James Sialepis, and a di­rec­tor of ser­viced apart­ments, Matthew Thomas.

He’s now look­ing for “some­one from the build­ing in­dus­try” to help him run the busi­ness – to re­place his long time gen­eral man­ager, Peter Spira, who re­tired last year.

Dis­cussing his fam­ily, Harry Triguboff says the good thing is that there are no com­plaints or fights.

“Look at the Smor­gons,” he says. “There are 65 of them. A night­mare. With us I have two wives, past and present, who don’t care, and two daugh­ters who don’t care. So no fight­ing.”

Triguboff gave each of his daugh­ters, Sharon and Orna and his wife, Rhonda, some prop­erty and also wrote into his will that when he dies they would get a third each of the busi­ness.

He says: “But then my wife told me that the prop­erty I gave her would be enough and she didn’t want a share of Meri­ton.”

So he changed his will to pro­vide that his daugh­ters would get half each when he dies, which is where it stands to­day. Although Sharon and Orna each stands to in­herit about $7.5bn, Harry says nei­ther woman is in­ter­ested in get­ting di­rectly in­volved in the busi­ness. Orna has two daugh­ters who Triguboff says are in­ter­ested in work­ing for the busi­ness but not run­ning it, and Sharon has two sons – Daniel, who is now work­ing in the busi­ness, and Ariel, who is still at univer­sity. Triguboff says his will may be changed again to specif­i­cally ac­com­mo­date Daniel or any other grand­chil­dren who be­come im­por­tant to Meri­ton.

“Some­one who works hard in the busi­ness should get some di­rect own­er­ship,” he says. “And wills should al­ways change. I changed mine be­fore I was 80, and I’ll prob­a­bly change it again be­fore I’m 90. In any case, I never wanted to cre­ate a dy­nasty. I just wanted to cre­ate a busi­ness … for me!”

At the top of his game: Triguboff high up on a

de­vel­op­ment on Syd­ney's Kent Street

Triguboff with his wife, chil­dren, son-in-law Gary Hendler, and grand­chil­dren; show­ing grand­son Daniel Hendler the ropes; and on site in the 90s on one of his early Syd­ney CBD projects

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