Meriton founder, Harry Triguboff, says the decision to sell their strata management business is a response to law reform in New South Wales.
“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 says.
The new strata-laws come into effect 1 December this year.
“We are veterans in this business and haven’t taken the decision to exit it lightly,” Triguboff adds.
Meriton is the country’s largest apartment developer, and it’s strata business manages 6194 lots spread over 33 schemes in Sydney and the Gold Coast.
Meriton’s Ryan Walmsley says the company’s gross annual income from base management fees and insurance commissions exceeds $1.1 million.
He said two-thirds of the strata-management schemes in Meriton’s portfolio are under contract until 2018 or longer, and will be an attractive investment for the right buyer.
“They will be buying well-maintained schemes that are big and viable – they have an average of 188 lots.”
Walmsley says the sale is being conducted 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.”