Ann: Sale Hoppers Crossing & Acquisition Geosciences, page-6

I don't think it's an obviously bad deal, but to offer a contra-perspective: industrial rents have increased substantially in west Melbourne (circa 15%+ in the last couple of years), and with a sub 2% vacancy rate for warehouses, they are projected to increase by 50% over the next five years. Therefore, the relatively skinny cap rate of 4.5% is going to increase substantially when the lease ends in 3.5 years (assuming no substantial recession...).

In practice, the negative with selling good property for good property is the fees: stamp duty in Canberra is circa 5%; and CHC is probably charging circa 2% to CLW as a purchase fee. So, that's 7% of the value vaporised. Unless there's a reason to think the office in Canberra is going to appreciate substantially in value over the medium term, it would have been arguably better to a) not sell the warehouse; or b) sell the warehouse and purchase CLW shares on-market.

Finally, it's arguably not a coincidence that CHC is now managing $250m+ more property after this transaction.