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INSTITUTIONAL investors have keenly backed the expansion plans of Gold Coast based retirement living company Eureka Group Holdings (ASX:EGH) after buying into a $10 million share issue.
The share offer, pitched at Eureka's current share price of 54c, has closed oversubscribed and gives the acquisitive Eureka Group further scope to expand its freehold property portfolio.
The company says it is undertaking due diligence on four new retirement villages, adding to two villages it acquired earlier this month at Wynnum and Terranora in south-east Queensland.
Under the share offer, Eureka is issuing 18.5 million shares at 54c with an immediate uptake of 7 million shares worth $3.78 million secured under its 15 per cent cap.
The remaining share issue will require shareholder approval at the company's annual general meeting to be held on November 30.
The $10 million share issue was managed by CCZ Equities, Canaccord Genuity and Hunter Green Institutional.
"Eureka Group will use the funds raised to continue the acceleration of the company's retirement village acquisition strategy, including the acquisition of four further villages that are currently under due diligence," says Eureka Group executive chairman Robin Levison (pictured).
"We are grateful for the continued support of existing shareholders and pleased to welcome a broad range of new Australian institutional investors to the Eureka register."
Eureka Group is aiming to become the largest rental-only retirement village operator in Australia and has secured a host of acquisitions in the sector over the past year. The company, which recently settled an acquisition at Rockhampton, owns close to 900 units ahead of the proposed acquisitions under due diligence.
According to Charlie Green, director of Hunter Green Institutional Broking, the share register of Eureka Group is attracting support from a range of larger institutional investors, with the company making ground in an otherwise overlooked market sector.
"It's a good business to be in," Green says, adding that bigger investors are generally more inclined to look at the higher end of the market.
"Eureka Group offers a service that so many people need in retirement, a place where they can live on the pension."
Green says the business model implemented by Eureka, which includes incentives for managers to boost occupancy rates, is helping the company achieve solid returns across its portfolio.
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