As a reflection of rising construction costs and commercial vacancy rates in Australia, billionaire owner of Meriton residential property group, Harry Triguboff has revealed his risk minimisation strategy of maintaining ownership of child care centres in his new developments.
Rather than leasing space to retail outlets, Triguboff has noted a more secure return from their current holding of eight child care centres, with another 18 due to be built and leased over the next 12 to 18 months.
This is a great example of using market diversification and widening an organisation’s scope across different products and market sectors to seize new opportunities and meet the market. It is associated with higher risks as it requires an organisation to take on new experience and knowledge outside its existing markets and products, but there is also great potential for gain.
“You can make better returns from the child care centres than you can from building houses, because costs have gone up,” Mr Triguboff tells BRW. “Of course, we are building far more housing but I think it is a very good thing to do. It gives women and parents choice, if they want to stay with the children they can or if they want to put them into care they can do that as well.”