Highlights

  • Eureka has agreed to acquire six NSW lifestyle and mixed-use communities for AUD 123.8 million.
  • The transaction will add 953 sites and lift the group's total homes and sites under management by 21% to 5,492.
  • An AUD 80.2 million fully underwritten entitlement offer will partially fund the acquisition.
  • Eureka has secured AUD 80.0 million of new committed Debt facilities from Westpac and National Australia Bank.
  • FY27 underlying EPS guidance has been lifted to at least 4.2 cents per share from at least 3.9 cents.

Eureka Group Holdings Limited (ASX:EGH) has unveiled a substantial expansion of its residential rental portfolio, entering contracts to acquire six lifestyle and mixed-use communities across New South Wales for AUD 123.8 million. The transaction is being supported by an AUD 80.2 million fully underwritten Equity raising and new committed debt facilities.

Eureka shares last closed at AUD 0.61 on 1 September 2026 and remained in a Trading halt during the morning Trading session on 3 September 2026. The halt had been requested on 2 September while the company prepared the market announcement relating to the material acquisition. Eureka's timetable indicates trading is expected to recommence on an ex-entitlement basis on 7 September 2026.

The Acquisition brings together properties in Greater Sydney, the Central Coast, Hunter Valley and Shoalhaven, giving Eureka exposure to 953 additional sites and materially expanding its presence in the NSW residential accommodation market.

Portfolio Scale Expands

The acquired NSW Living Portfolio comprises four mixed-use communities and two land Lease communities. Together, the Assets contain 680 permanent sites, 114 tourist cabins and 159 tourist sites.

Once incorporated into Eureka's existing operations, the transaction is expected to lift the group's portfolio to 70 villages. Homes and sites under management are set to increase by 21% to 5,492, while assets under management are expected to rise by 23% to AUD 666 million.

The acquisition also changes Eureka's geographical mix. NSW is expected to account for 24% of total homes and sites following completion, compared with 8% previously. The portfolio will also establish Eureka's presence in Greater Sydney.

Around 71% of the acquired portfolio comprises permanent sites, providing the group with an increased base of recurring rental income.

Eureka said the portfolio is being acquired at an 8.1% ingoing yield, with a forecast five-year unlevered internal rate of return of 15%.

Managing Director and Chief Executive Officer Simon Owen said the transaction would add 953 established sites across Greater Sydney and other NSW locations while increasing Eureka's operating scale.

He said the acquisition remained consistent with Eureka's strategy of purchasing established communities at attractive entry yields while identifying opportunities to improve operating performance and increase density at selected locations.

Six Communities Added

The two largest assets by purchase price are The Grange land lease community at Morisset and Bevington Shores at Lake Macquarie.

The Grange is being acquired for AUD 34.8 million at an ingoing Yield of 5.4%. It contains 209 permanent sites. Bevington Shores carries a purchase price of AUD 30.1 million, an ingoing yield of 5.9%, and 193 permanent sites.

The Greater Sydney portion includes Nepean River and Sydney Hills. Nepean River is being acquired for AUD 18.3 million and comprises 150 total sites, including 99 permanent sites. Sydney Hills has a purchase price of AUD 16.8 million and contains 137 sites.

The Hunter Valley mixed-use community is valued at AUD 12.2 million and contains 115 sites, while the Ulladulla community in Shoalhaven is being acquired for AUD 11.6 million and comprises 149 sites.

Eureka expects all assets within the NSW Living Portfolio to be fully settled by the end of CY26.

Funding the Transaction

To partially fund the acquisition, Eureka is undertaking a 1-for-3.29 accelerated non-renounceable entitlement offer targeting AUD 80.2 million.

Approximately 130.4 million new shares are expected to be issued, equivalent to about 30.4% of Eureka's existing shares on issue.

The new shares will be issued at AUD 0.615 each. The Offer Price represents a 0.4% discount to the five-day volume-weighted average price of AUD 0.617 per share on 1 September 2026 and a 4.4% discount to the adjusted 10-day VWAP of AUD 0.643.

Filetron Pty Ltd, which holds a 34.8% interest in Eureka, has committed to taking up its full entitlement.

The new shares will rank equally with existing Eureka shares from their date of issue. However, they will not qualify for the six months to 30 June 2026 Dividend of 0.73 cents per share, which Eureka announced on 20 August 2026.

The retail component will open on 10 September and is scheduled to close at 5:00pm AEST on 23 September 2026. Eligible retail shareholders taking up their full entitlement may also apply for additional shares through the oversubscription facility, subject to availability and potential scale-back.

Debt Capacity Added

Alongside the equity raising, Eureka has secured AUD 80.0 million in new committed debt facilities from Westpac and National Australia Bank.

Of this amount, AUD 53.6 million is expected to fund the remaining acquisition consideration, while the additional AUD 26.4 million of committed facilities is intended to provide capacity for future acquisitions and development activities.

Equity raising proceeds will initially be directed toward debt repayment until settlement of the acquired portfolio occurs.

FY27 Guidance Lifted

The enlarged portfolio has also resulted in a revision to Eureka's FY27 Earnings expectations.

On a pro forma basis for the acquisition and equity raising, Eureka now expects FY27 underlying Earnings Per Share of at least 4.2 cents. This represents 22% growth compared with FY26 and an 8% increase from the company's previous FY27 guidance of at least 3.9 cents per share.

The company also indicated that the transaction would deliver double-digit EPS accretion on a full-year basis, assuming the acquisition and equity raising had settled on 1 July 2026.

What Investors May Be Watching

Eureka's proposed NSW portfolio acquisition materially increases the size of its operating platform while broadening its exposure across several NSW residential markets. Investors may now focus on completion of the six acquisitions by the end of CY26, execution of the AUD 80.2 million entitlement offer and integration of the additional 953 sites.

The revised FY27 underlying EPS guidance of at least 4.2 cents per share provides another measurable benchmark following completion. Attention may also remain on the performance of the acquired communities, the group's use of its additional AUD 26.4 million debt capacity and progress toward the operating and densification opportunities identified within the enlarged portfolio.