Eureka Secures 9.2% Yield in Gladstone Home Village Buy for $4.5 Million

Eureka’s Strategic Expansion

Eureka Group Holdings Limited (ASX: EGH) has taken a significant step beyond its established seniors rental portfolio by acquiring the Kin Kora village in Gladstone, Queensland. This mixed-use residential home village and caravan park acquisition signals Eureka’s deliberate expansion into the all-age rental market, a sector gaining momentum amid Australia’s evolving housing landscape.

The $4.5 million purchase includes 19 manufactured homes, 13 short-stay cabins, and 77 powered and unpowered caravan sites, complemented by community amenities such as a manager’s residence and swimming pool. The acquisition delivers an initial yield of 9.2%, excluding transaction costs, positioning it as a financially attractive addition to Eureka’s portfolio.

Responding to Market Dynamics

With home ownership rates declining and rental demand rising, especially among those under 55, Eureka’s move taps into a critical market need. CEO Simon Owen highlighted the acquisition as a response to Australia’s housing crisis, particularly in regional areas like Gladstone, where affordable rental options are scarce. The Kin Kora village is poised to serve a diverse tenant base, including essential workers, retirees, and tradespeople.

Importantly, Eureka plans to convert 28 caravan sites into one- and two-bedroom rental villas, investing approximately $5 million to enhance yield on cost to over 12%. This immediate development opportunity underscores the company’s commitment to unlocking value and meeting rental demand swiftly. Further expansion could see an additional 20+ villas added, pending council approval, indicating a longer-term growth trajectory.

Capital and Regional Context

The acquisition is funded through proceeds from Eureka’s recent $70.4 million capital raising, reflecting strong investor confidence in the company’s growth strategy. Gladstone itself is a strategically important regional hub, with a population of around 65,500 and a robust economy anchored by mining and the Port of Gladstone, one of Australia’s largest multi-commodity ports. The region’s ongoing renewable energy initiatives add a layer of future-oriented economic resilience.

Notably, Eureka already operates a seniors rental living village in Gladstone and owns adjacent land earmarked for future development, suggesting a deepening footprint in the region. This layered presence could provide operational synergies and a platform for scaling the all-age rental model.

Looking Ahead

Settlement of the Kin Kora acquisition is expected by mid-March 2025, with the company signaling that this deal is just the beginning of a broader expansion into the all-age rental sector. Multiple parks are reportedly under due diligence, and a pipeline of opportunities is under active review. This strategic diversification could balance Eureka’s portfolio and position it well to capitalize on shifting housing trends.

While the acquisition and planned developments offer promising upside, the reliance on council approvals for expansion introduces an element of regulatory risk. Market watchers will be keen to see how quickly Eureka can execute its conversion plans and whether it can replicate this model across other sites.