Eureka Group Holdings (ASX: EGH) has announced the acquisition of Burrum River Caravan Park on Queensland’s Fraser Coast for $5.3 million. The mixed-use park, located between Hervey Bay and Maryborough, presents an opportunity to increase long-term rental accommodation amidst a regional housing crisis. The park currently comprises 55 Manufactured Housing Estate (MHE) homes, 4 short-term cabins, 37 powered caravan sites, and 3 short-term campsites. Eureka acquired the park on an initial yield of 8.6%.
The Group plans to convert 37 caravan sites into 32 long-term rental units, pending Council approval. This conversion is projected to yield a five-year unlevered IRR of 17.3%, assuming an initial 16 long-term rental conversions. Eureka intends to eventually buy back and convert the existing 55 manufactured homes into long-term rentals as well. Eureka CEO Simon Owen highlighted the region’s housing shortage and the park’s potential to provide accommodation for singles, couples, retirees, and key workers. The acquisition complements Eureka’s existing footprint of five seniors rental living communities in the region, which are currently at full occupancy with strong waitlists.
The Fraser Coast is poised for economic growth due to significant infrastructure projects such as the $9.5 billion Queensland Train Manufacturing Program in Maryborough and the $2 billion Forest Wind farm. These projects are expected to increase the demand for rental accommodation. Mr. Owen stated that the company is confident the region’s low vacancy rates and anticipated influx of key workers will bolster demand for rental accommodation at Burrum River Caravan Park.
This acquisition, the fourth funded from Eureka’s $70.4 million capital raising, is expected to settle before the end of the 2025 financial year. The expansion aligns with Eureka’s strategy to capitalize on the increasing demand for affordable rental housing in regional Queensland.
