Seizing an Opportunity in Affordable Rentals
With home ownership in Australia becoming increasingly out of reach and rental demand surging, the all-age rental sector presents a significant growth opportunity. According to the most recent National Census, nearly 30% of Australians rent their homes, and 85% of these renters are under the age of 55.
Eureka Group Holdings Limited (ASX: EGH) is tapping into this unmet demand with its latest acquisition—a mixed-use residential village and caravan park in Gladstone, Queensland.
CEO Backs Expansion Strategy
“The Kin Kora village acquisition in Gladstone breaks new ground for Eureka as we expand into the all-age rental market,” said Eureka CEO Simon Owen.
“The housing crisis continues to impact communities across Australia, including in regional areas. Kin Kora presents an excellent opportunity for Eureka to meet the growing demand for affordable low-cost housing to service a range of markets including essential service workers, active retirees, and tradespeople.”
Acquisition Details and Immediate Development Plans
Eureka has secured the community for $4.5 million at an initial yield of 9.2%, excluding transaction costs. The site consists of 19 Manufactured Housing Estate (MHE) homes, 13 short-stay cabins, and 77 camping and caravan sites, along with a manager’s residence, central amenities block, and a swimming pool.
A development approval is already in place to convert 28 caravan sites into new rental villas, with an estimated cost of $5 million. Once stabilised, these new villas are expected to deliver a yield on cost of over 12%. Further opportunities exist to add another 20-plus rental villas, subject to council approval.
A Pipeline of Future Growth
“I expect this will be the first of many similar park acquisitions for Eureka,” Owen said. “We currently have multiple parks under due diligence and a long pipeline of opportunities that we have under review. We expect to quickly grow this sector in parallel with the expansion of our existing seniors’ affordable rental portfolio.”
Eureka already operates a high-occupancy Seniors Rental Living Village in Gladstone and owns a 2.6-hectare site adjacent to the village earmarked for future development.
The Kin Kora acquisition will be funded from Eureka’s recent $70.4 million capital raising, with settlement expected on 13 March 2025.
Why Gladstone?
Gladstone is Queensland’s 11th largest town, with a population of 34,703 and a wider regional community of 65,500 residents. The region is a hub for mining and industrial activity, with the Port of Gladstone ranking as the fifth-largest multi-commodity port in Australia and the fourth-largest coal-exporting terminal in the world.
New renewable energy projects—including biofuels, solar energy, and waste management innovations—are also in development, further strengthening the region’s economic outlook.
With demand for affordable housing on the rise and significant upside in rental yields, Eureka’s expansion into all-age rental housing aligns with both market needs and long-term strategic growth.
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