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.
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Last
$3.79 |
Change
0.040(1.07%) |
Mkt cap ! $2.740B |
Open | High | Low | Value | Volume |
$3.75 | $3.80 | $3.74 | $9.167M | 2.424M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 5298 | $3.77 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$3.79 | 37857 | 6 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 1990 | 3.760 |
2 | 3988 | 3.750 |
3 | 6872 | 3.740 |
1 | 2988 | 3.730 |
2 | 3997 | 3.720 |
Price($) | Vol. | No. |
---|---|---|
3.790 | 13989 | 1 |
3.800 | 73738 | 10 |
3.810 | 2988 | 1 |
3.820 | 5074 | 3 |
3.830 | 4817 | 3 |
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CLW (ASX) Chart |
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