Meriton exiting strata-management business

Meriton, Australia’s largest apartment developer, is selling its strata-title management business, an operation that looks after more than 6000 apartments in Sydney and the Gold Coast.

Harry Triguboff, the Meriton founder, yesterday said that the move was a response to wholesale reforms to the strata-title laws in NSW, which come into effect on December 1.

“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 and things have gone swimmingly and with great success.

Meriton is selling an entity which trades as Meriton Strata Management Pty Ltd and looks after 6194 lots spread over 33 schemes. Two of those are on the Gold Coast and are included in the selloff.

Meriton’s Ryan Walmsley said the gross annual income from base management fees and insurance commissions exceeded $1.1 million.

“There is potential upside from other expenses and fees that apply within each management contract.”

Mr Walmsley said two-thirds of the strata-management schemes in Meriton’s portfolio were under contract until 2018 or longer.

“The strata-scheme properties involved are in a metropolitan location and have been with us for many years.

“Our portfolio will offer a great addition for any operator on the expansion trail.

“They will be buying well-maintained schemes that are big and viable – they have an average of 188 lots.”

Mr Walmsley said it had been evident for some time that strata-management companies were jostling for position and aggressively were targeting acquisitions.

“That’s happening against a backdrop of Australia turning into a nation of apartment dwellers.

“Nearly one third of NSW residents already live in apartments and one estimate is that the figure could climb to 50 per cent by 2040.”