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Highlights

  • Acquisition includes 3.89-hectare Burrum River Caravan Park near Hervey Bay.
  • 99-site park offers a mix of MHE, tourist, and short-term accommodation.
  • Potential for long-term rental expansion, subject to Council approval.

Eureka Group Holdings Limited (ASX: EGH) has announced the acquisition of Burrum River Caravan Park, a mixed-use property situated on Queensland’s Fraser Coast between Hervey Bay and Maryborough. The $5.3 million acquisition aligns with the company’s broader strategy of investing in income-generating rental assets, particularly in regions experiencing housing shortages.

The 3.89-hectare freehold park comprises 99 accommodation sites, including 55 Manufactured Housing Estate (MHE) homes, 4 cabins for short stays, 37 powered caravan sites, and 3 short-term campsites. Additional amenities include a manager's residence, communal facilities, and a swimming pool.

The initial yield on the acquisition is 8.6%. Eureka plans to gradually convert 37 powered caravan sites into 32 additional long-term rental units, contingent upon local Council approval. A phased approach may also see the buy-back and conversion of the 55 existing MHE homes into long-term rentals over time. Based on an initial conversion of 16 units, the unlevered internal rate of return (IRR) over five years is estimated at 17.3%.

The acquisition supports Eureka’s current footprint in the region, where it operates five fully occupied rental villages between Gympie and Bundaberg, including one in Hervey Bay. The area is also anticipating significant infrastructure activity, such as the Queensland Train Manufacturing Program in Maryborough and the proposed Forest Wind farm, which may drive increased demand for rental housing.

Settlement of the Burrum River Caravan Park acquisition is expected before the close of the 2025 financial year. It represents the fourth acquisition funded by Eureka’s recent $70.4 million capital raise.