This article is from the Australian Property Journal archive
EUREKA Group is boosting its portfolio with several strategic acquisitions, moving to purchase almost 500 units across more than 10 villages.
The group has entered into heads of agreement, is in due diligence or advanced discussions to acquire 441 units across 7 villages and has now acquired or is in advanced discussions for 38 single units across 4 managed villages.
This represents a total investment of $49.9 million, with a further $7.5 million in village expansion opportunities also identified.
“These strategically compelling Acquisitions accelerate our growth strategy and provide Eureka with a stronger growth trajectory. They also build on our track record of deal origination capability and access to deal flow, both on and off market,” said Simon Owen, CEO at Eureka.
Primarily located in Queensland, the acquisitions will add 479 units and 30 development units to Eureka’s portfolio.
This includes two villages under heads of agreement subject to due diligence for approximately $14.8 million, set to deliver immediate yield of 9.6% per annum.
Five villages in due diligence or advanced discussions for approximately $30.3 million in total.
With 38 individual units at existing managed villages for $4.8 million, where 24 units have already been acquired since 30 June 2024 for $3.0 million and the remaining to be acquired for $1.8 million.
And village expansions of $7.5 million which will deliver a yield on cost of more than 12.5% per annum.
Eureka has also announced a fully underwritten equity raising of $70.4 million to fund these acquisitions.
The raising will comprise a $55.4 million 1 for 3.4 accelerated non-renounceable pro-rata entitlement offer and a $15.0 million institutional placement.
“The Equity Raising provides Eureka with the capital to execute on these Acquisition opportunities and rapidly increase scale as a leading provider of seniors’ rental accommodation in Australia,” added Owen.
Eureka has provided a FY25 guidance of underlying EBITDA growth of at least 16% on FY24, underlying EPS growth of at least 8% on FY24 and fully deployed pro forma underlying EPS growth of at least 19% on FY24.
Back in August, Eureka reported a dip in profit over FY24, after lower property valuations and increases costs, including those spent on defending Aspen Group Limited’s unsuccessful takeover offer.
