Eureka Group Holdings Limited (ASX: EGH) has announced the acquisition of Emerald Tourist Park, a mixed-use park located in Emerald, Queensland. Eureka Group Holdings specialises in the ownership and management of affordable accommodation communities. The company’s portfolio includes seniors rental villages and all-age rental communities.
The acquired park, situated approximately 270km west of Rockhampton, features a mix of cabins, motel rooms, and caravan sites. The 3.09ha freehold land holding currently comprises 106 sites. Eureka plans to leverage the existing development approval to add 55 rental units and 24 motel rooms, catering to the demand for accommodation driven by the mining, agriculture, and renewable energy sectors in the region.
The purchase price for Emerald Tourist Park is $7.5 million, reflecting an initial yield of 8.5%. Eureka anticipates a five-year unlevered Internal Rate of Return (IRR) of 19.0%, assuming the development of the additional rental cabins and motel rooms. The acquisition aligns with Eureka’s strategy to expand into affordable all-age rental accommodation. According to Eureka, Emerald’s low vacancy rate and strong rental rate growth make it an attractive market.
Simon Owen, CEO of Eureka, stated that the acquisition presents an immediate opportunity to develop more rental accommodation in the region, addressing the chronic shortage in Emerald. This acquisition marks the sixth since the company’s $70.4 million capital raising. Settlement is expected in early August.