- Eureka Group (EGH) has enters into conditional interdependent contracts to purchase Management and Letting Rights for six communities in southeast Queensland
- The purchase price for the MLRs and accompanying real estate is $6.1 million and will be earnings accretive in year one
- The deal will be backed by debt and cash reserves, with a settlement date of February 1, 2022
- Once complete, the overall number of units managed by Eureka will be 2580, up from 2191 at the end of June 2021
- Shares in Eureka Group are up 3.08 per cent to 67 cents each at 12:35 pm AEDT
Eureka Group (EGH) has signed conditional interdependent contracts to buy Management and Letting Rights (MLRs) for six villages in southeast Queensland.
Oxford Crest currently operates the villages, which offer low-cost rental housing for seniors.
The purchase price for the MLRs and accompanying real estate is $6.1 million and will be earnings accretive in year one, Eureka said.
The deal will be backed by debt and cash reserves, with a settlement date of February 1, 2022.
Taking into account various “support office” expenses, the yearly return on investment — prior to funding costs — is expected to be 13 per cent.
The acquisition is subject to financing approval as well as necessary body corporate clearances, including a change of caretaker and manager to Eureka.
Eureka would oversee around 330 of the 414 units in the six communities. The bulk of the units are owned by third-party investors, providing Eureka with an additional possibility to enhance the portfolio’s units under management.
Along with its ownership model, Eureka will continue to aggressively explore strategic opportunities to increase its managed portfolio in the seniors’ independent living sector.
The Eureka village management concept is distinguished by above-average profits, low management risk, and ownership possibilities through the acquisition of individual units in stages, the company said.
Following this acquisition, the overall number of units managed will be 2580, up from 2191 at the end of June 2021.
This portfolio of villages, which includes communities in Deagon, Beachmere, Raceview, Bundamamba, Toowoomba, and Gympie, expands Eureka’s position in southeast Queensland.
Shares in Eureka Group are up 3.08 per cent to 67 cents each at 12:35 pm AEDT.