Eureka Group expands Queensland presence with Burrum River Caravan Park acquisition

Eureka Group Holdings Limited (ASX: EGH) has announced the acquisition of Burrum River Caravan Park for AUD 5.3 million, further reinforcing its strategic push into regional affordable housing solutions. The mixed-use freehold property, located between Hervey Bay and Maryborough on Queensland’s Fraser Coast, is expected to deliver an initial yield of 8.6% and an unlevered internal rate of return (IRR) of 17.3% over five years based on early conversion assumptions.

This marks the fourth acquisition funded from Eureka’s AUD 70.4 million capital raise, signaling an aggressive, yield-driven expansion into high-demand coastal zones grappling with a housing crisis. The deal also highlights the company’s ongoing shift from hybrid MHE-tourism assets to fully income-generating long-term rental communities, especially in infrastructure-heavy regional corridors.

What Is Included in the Burrum River Caravan Park Deal?

The 3.89-hectare park comprises 99 sites, including 55 Manufactured Housing Estate (MHE) homes, 4 short-term cabins, 37 powered caravan sites, and 3 campsites. Existing infrastructure includes a three-bedroom manager’s residence, communal kitchen, amenities block, and a swimming pool.

Eureka intends to convert 37 powered caravan sites into 32 long-term rental units, subject to council approval. This conversion pipeline aligns with the company’s long-term strategy to generate stable, government-supported rental income by repurposing underutilised land parcels in fast-growing regions. Over time, it may also buy back the existing 55 MHE homes to increase its directly managed rental portfolio.

How Does This Reflect National Housing Trends?

Eureka’s latest move is reflective of wider Australian real estate trends. Regional and coastal areas like the Fraser Coast have witnessed surging population inflows, rising rental demand, and low vacancy rates. The post-pandemic trend of decentralisation, combined with infrastructure-led employment booms, has compounded the need for low-cost long-term housing.

Infrastructure projects such as the AUD 9.5 billion Queensland Train Manufacturing Program in Maryborough and the proposed AUD 2 billion Forest Wind farm are expected to attract key workers and skilled labour over the next decade. These developments are pushing up both temporary and permanent accommodation demand—particularly for retirees, singles, and workers unable to access conventional housing supply.

How Will Eureka Fund and Monetise the Site?

The Burrum River deal is being funded through Eureka’s AUD 70.4 million capital raise, completed in early FY25. The fully equity-financed structure enables the company to preserve debt headroom while deploying capital into immediately income-accretive assets.

Eureka’s revenue model is anchored in weekly rental income from seniors and key workers, supplemented by operating margins from managed services and maintenance. This acquisition further strengthens the company’s cash-generating engine, given the existing MHE rents and future upside from rental conversion. The property is expected to settle before the end of FY25, and conversion works will commence immediately upon council approval.

What Is the Market Saying About Eureka Stock (ASX: EGH)?

As of 1 May 2025, Eureka Group Holdings Ltd (ASX: EGH) was trading at AUD 0.50 per share, with a 52-week range of AUD 0.45 to AUD 0.59. The stock has shown moderate upward momentum following its strategic acquisitions and steady dividend distributions.

Market sentiment around EGH is broadly positive, supported by its defensive income profile, exposure to underpenetrated housing markets, and low correlation to interest-rate-sensitive sectors. The Burrum River acquisition—offering an 8.6% entry yield—has been particularly well-received by retail investors and smaller institutional funds focused on social infrastructure and income-generating REITs.

Buy/Sell/Hold Sentiment:

Analysts tracking the affordable housing REIT space are inclined to “Hold” EGH in the short term, while watching for council approvals on the conversion project. Should the 32-unit plan proceed without delay, the expected IRR of 17.3% could trigger a “Buy” upgrade on the back of accretive earnings visibility and dividend growth potential.

Institutional Flows and FII/DII Activity Around Eureka

Institutional shareholding in Eureka has seen a modest uptick post-capital raise. Domestic institutional investors have shown increased interest, particularly income-focused funds and ESG-aligned portfolios that view regional affordable housing as a resilient long-term play.

While no major Foreign Institutional Investor (FII) activity has been disclosed, Eureka is beginning to feature on the radar of real asset funds based in Asia and Europe, particularly those targeting yield above 6% in developed markets. On the Domestic Institutional Investor (DII) front, at least two Queensland-based funds have reportedly increased exposure since Q1 FY25.

This acquisition could further improve Eureka’s appeal to fund managers seeking stable, asset-backed rental yield exposure outside metro-centric residential REITs.

What Are the Next Steps and Potential Catalysts?

The short-term catalyst will be the local council’s approval for the 32-unit conversion, which, if granted promptly, could enable occupancy before the end of FY26. Given Eureka’s full occupancy across five Fraser Coast communities and ongoing waitlists, the demand-side risk is minimal.

Further acquisitions are anticipated within the next 6–12 months, particularly across northern New South Wales and additional Queensland coastal sites. With AUD 65 million still available from the capital pool, the company is well-positioned to scale, provided site selection and regulatory approvals remain favourable.

Longer term, the company may consider up-listing to improve visibility and attract larger institutional flows, especially if its managed portfolio approaches the 1,000-unit mark within two years.

Strategic Takeaway: Why Burrum River Matters to Eureka’s Growth Path

The Burrum River Caravan Park acquisition exemplifies Eureka’s strategy of value-driven, socially responsive expansion. By targeting low-barrier, high-conversion-potential assets in regions facing acute housing shortages, Eureka creates dual impact: it supports community resilience while delivering attractive, non-cyclical returns to investors.

Unlike traditional property developers focused on speculative capital gains, Eureka operates a rental-first, income-oriented model that prioritises tenant stability and operational scalability. With macroeconomic winds favouring regional migration, infrastructure funding, and affordable housing demand, Eureka’s niche positioning appears increasingly validated.