Eureka snaps up another Queensland caravan park
Eureka Group Holdings has bought its third major caravan park this year – this time on the Fraser Coast.
The ASX listed over 50s and all-age rental community provider has paid $5.3 for the Burrum River Caravan Park – with 37 powered caravan sites, 55 Manufactured Housing Estate estate homes and four short term cabins on 3.89 hectares, zoned Mixed Use.
The result reflects an 8.6 per cent ingoing yield.
Subject to approval, Eureka plant to convert the powered sites to 32 long-term rental units, a spokesperson said.
The five-year unlevered internal rate of return assuming an initial 16 long-term rental conversions is 17.3pc, they added.
“Over time, the group will also look to buy-back and convert the 55 manufactured homes into long-term rental units,” according to the executive.
Burrum is about 25 kilometres north west of Hervey Bay
The deal comes five weeks since we reported Eureka outlaid $8.25m – an 8.6pc yield – for the Tuggerah Shores Home Village on the NSW Central Coast.
It is also buying the Kin Kora Village at Gladstone, in Queensland, for $4.5m.
Conversion planned
Burrum River also contains a three bedroom manager’s residence, central amenities block, camp kitchen and inground pool.
“The Fraser Coast, like many regions in Queensland, is experiencing a housing crisis,” Eureka chief executive officer, Simon Owen, said.
“This acquisition provides an opportunity for Eureka to increase the provision of long-term accommodation for singles, couples, retirees, and key workers in the region,” he added.
“Eureka already has a strong presence in the region, operating five seniors rental living communities between Gympie and Bundaberg, including one in Hervey Bay,” according to the executive.
“All five villages, totalling 284 units, are presently operating at full occupancy with strong waitlists.
“Several large infrastructure projects have either been announced or are planned for the Fraser Coast including the $9.5 billion Queensland Train Manufacturing Program in Maryborough and the $2b Forest Windfarm proposed to be built between Gympie and Maryborough.
“Eureka is confident that the low vacancy rate across the Fraser Coast, coupled with an influx of key workers to deliver these large infrastructure projects over the coming years, will create strong demand for rental accommodation at Burrum River Caravan Park”.
Fourth deal since capital raising
Burrum River is Eureka’s fourth acquisition funded from a $70.4m capital raising last year.
The group also recently upsized a $101m debt facility to a $180m multilateral arrangement with expiries in three, five and seven years -and secured a $5m working capital facility, to be renewed annually; both agreements are with National Australia Bank and Westpac.
“We have also increased our future borrowing capacity with a documented $200 million uncommitted ‘accordion’ facility,” Mr Owen said.
“These enhancements reinforce our financial strength and flexibility, enabling future strategic investments,” he added.
Subscribe to our newsletter at the bottom of this page.
