@PeregrineCapital flipping the discount to understand the cap rate you are receiving. Would I be right in saying the market is currently valuing AOF at a cap rate of 9.16%?

I get to this number from a property value of $316m with a cap rate of 5.74% giving a "net income" of $18.14m.

Current market cap = $238m, minus out the $40m cash to give $198m in assumed property value.

Cap rate = 18.14/198 = 9.16%

Any numbers above incorrect?

If not, seems like a decent rate of return, assuming office space can be leased out at expected rates, with some potential for additional gains from renovation/expansion as well. So not much downside risk due to valuation. I wouldn't want to be touching US office space at the moment (unless at a massive discount). While I don't think the US environment directly translates to the Australian market necessarily, the market might not be as keen on office space for a while as a result. What if the Aussie cash rate ends up at a terminal rate of around 4%, is a 9% cap rate fair value? What is the normal premium above the cash rate for office space?