Billionaire Sydney property developer Harry Triguboff is selling his company’s strata-title management business, blaming changes to the law in NSW for the decision.
Meriton has built more than 70,000 apartments over the past five decades and is the country’s largest apartment developer, predominantly in Sydney, Brisbane and on the Gold Coast. The 83-year-old’s latest and biggest project is the $3 billion community at the Pagewood Green site in Sydney’s Eastern Suburbs.
But on Wednesday, Triguboff announced he’d sell Meriton Strata Management Pty Ltd, which looks after 6194 lots spread over 33 schemes in Sydney and the Gold Coast, because of new strata-title laws in NSW that start on November 30.
NSW has more than 75,000 strata schemes covering $350 billion in assets.
With around a quarter of the state’s population now living in, owning or managing strata apartments, the Baird government made 90 changes to the existing laws arguing they will increase accountability for strata managers, reduce red tape, make it easier to resolve disputes and make issues such as renovation approvals easier. A new building defect bond scheme starts on 1 July, 2017.
The government says the reforms affect around 2 million industry professionals, strata owners, and residents.
But Triguboff says the changes lock him out as the developer.
“One of those reforms effectively shuts Meriton, and other developers, out of having any role in the strata-management of their properties until the buildings are 10 years old,” he said.
“We are veterans in this business and haven’t taken the decision to exit it lightly. We’ve always run our own ship at our own developments.”
Meriton Strata Management general manager Ryan Walmsley said management fees and insurance commissions generated more than $1.1 million annually for the business and two-thirds of the schemes are under contract until at least 2018.
He was optimistic about offloading the business, saying strata-management companies were jostling for position and were aggressively targeting acquisitions.
“That’s happening against a backdrop of Australia turning into a nation of apartment dwellers,” he said.
“Nearly one third of NSW residents already live in apartments and one estimate is that the figure could climb to 50% by 2040.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.