Eureka Snaps Up $44m Senior Living Villages in WA

Senior living specialist Eureka Group has acquired six seniors’ rental villages in Western Australia for $44 million. 

The ASX-listed company launched a wholesale property fund, Eureka Villages WA Fund, managed by Eureka Asset Management, to acquire the portfolio from Ingenia Communities Group. 

Eureka said the Ingenia Gardens villages were located in “strong residential areas” of Perth, Mandurah, Bunbury and Albany, and totalled 321 units. 

Occupancy at the villages exceeds 98 per cent, and the portfolio has a weighted average capitalisation rate of 8.4 per cent. 

Following the acquisition, Eureka’s portfolio now has 52 owned or managed villages comprising 2872 units nationwide. 

Eureka is acquiring the villages and funding transaction costs using equity and a standalone debt facility of $21 million, as well as raising $28.5 million from professional and wholesale investors, plus a $5-million ‘cornerstone’ investment from Eureka. 

It said that the acquisition strengthened income streams and its 2024 outlook, as well as being immediately earnings per share accretive. 

“This transaction demonstrates Eureka’s ability to access alternative forms of capital that are necessary to grow the business,” Eureka executive chairman Murray Boyte said. 

According to Ingenia, the sale means that it is on track to recycle $70 million of assets in its full year. 

It has been focused on divesting ‘non-core’ assets and recycling capital to fund development and “maintain the group’s prudent balance sheet settings”. 

They were isolated in terms of the group’s operations, being its only exposure in Western Australia. 

“We continue to focus on portfolio enhancement and scale as well as the delivery of operating efficiencies and these divestments are in line with this objective,” Ingenia Communities chief executive Simon Owen. 

“It is pleasing to see the gardens communities transact on capitalisation rates of circa 8 per cent, indicative of our long-held view that this asset class remains mispriced.

“The sale proceeds will be deployed across our growing pipeline of opportunities in the lifestyle business as we continue to progress our established projects to create sustainable, high-quality communities.” 

The sale is anticipated to complete in December.