Alan Kohler on Triguboff's succession
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