Listed rental village operator Eureka has announced the purchase of an 80 unit rental village in Lismore (NSW) for $4M, which they forecast will generate annual revenue of $1.2 million and a net (EBITDA) return of $600,000p.a. This equtes to a cost of $50,000 per 47sqm rental unit.
National Australia Bank is providing finance of $2.4 million.
Eureka has emerged out of the receiverships of the old Village Life and SunnyCove. They have approximately 24 rental villages, owning about six villages and managing the balance for private investors. They wish to be the largest rental village operator in the country. (Ingenia currently leads).
Eureka’s share price has steadily climbed from 4 cents just 20 months ago to 44 cents today. Brokers are advising a target price of 47 cents.
Eureka’s Chairman, Robin Levison, gave a 15 minute presentation, explaining their business model, at our LEADERS SUMMIT in March. You can see the video HERE.
He points out that they enjoy and 91% occupancy, the average tenancy is five years, and food and the village management are key. In fact they have a waiting list of managers keen to work with them – they are treated like franchisees.