Meriton switches units to resi market after 40 per cent serviced apartment rate drop

George Sell George Sell Uploaded 28 January 2021

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Australia: Meriton boss Harry Triguboff is moving 1200 Sydney serviced apartments to the residential lettings market following a 40 per cent drop in rate and occupancy.

The company will also temporarily turn over an equal number of units for two-week quarantine accommodation.

"We filled a lot of our apartments with long-term stays," said Triguboff. "It takes a while – I had to fill 2000 apartments. I’ve filled already about 1200. The other thing is we have people that come from overseas and we put them there for two weeks. We've got four blocks like that. Between all of it, it’s turning out OK."

Fellow Australian operator Quest has been forced by the pandemic to close properties in four states. Triguboff said Meriton had avoided the same problem because its apartments are larger and easier to rent out to longer-term tenants.

"I build bigger ones," he said. "I believe that if you live at home in a two-bed and go for a holiday, you shouldn’t go into a studio. It came in very useful now, because I could lease these very well to residential people. These other guys – they all built the small way, the American way, which it’s harder to lease them for permanent people. Therefore, they had to close down."

Triguboff, whose staff have worked from Meriton's central Sydney office throughout the pandemic, said most workers would return to their offices: "Some people will work from home, but really, the majority will come back to offices. You can’t run a business with people [working] from home. I was very surprised that the banks and others agreed with this working from home. I can’t see how they can make money with the people staying at home and working from there. I can’t imagine that that’s efficient."

He added that rental rates for long term residential units had dropped around 20 per cent, compared with 40 per cent for serviced apartments.

 

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