EUREKA GROUP BUILDS ON RETIREMENT AMBITIONS
Written on the 1 October 2015 by Lachlan McConnell
EUREKA Group Holdings (ASX:EGH) has bolstered its ambition of being the largest rental-only retirement village operator in Australia through the acquisition of villages in Wynnum and Terranora.
The news comes on the heels of the Gold Coast-based company settling an earlier acquisition at Rockhampton, with the latest deals adding another 121 units to the company's existing 764 owned units.
The settlement of the 41 unit Rockhampton village, managed by Eureka for the past seven years, has also contributed to the company's burgeoning presence in Queensland.
The Wynnum village is expected to contribute annual revenue of about $740,000, with EBITDA forecast in the region of $470,000. With vacant land to build up to 30 new units, Eureka expects the yield on this village to be at or in excess of other villages already in the company's portfolio.
Eureka will also pay $7 million, subject to a 30-day due diligence period, for the 80-unit Terranora seniors' rental village in Tweed Heads, which is currently 100 per cent occupied.
Both the Wynnum and Terranora units are expected to be larger and of a higher standard than previous village purchases, and Eureka executive chairman Robin Levison says the new acquisitions represent a shrewd investment for the company.
"Both the Wynnum and Terranora acquisitions really complement our existing portfolio of owned villages," he says.
"They are both fully occupied, have waiting lists and are ideally situated to be very stable asset backed, reliable income earning assets."
Levison has been rewarded for accelerating the company's 'buy and build' strategy, with the nomination and remuneration committee of the board of Eureka appointing the former non-executive chairman to the role of executive chairman for a period of 12 months.
Eureka board member Lachlan McIntosh believes Levison is capable of leading the company through its next period of expansion.
"We are delighted Robin has agreed to devote more time to this critical growth phase for Eureka, and we are certain that his leadership will further accelerate the company's strategy of acquiring asset backed income generating assets," McIntosh says.
Author: Lachlan McConnell