BUILDING LANDMARKS, CHARTING GROWTH
217
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
5 INVESTMENT PROPERTIES
(continued)
Fair value hierarchy
The fair value measurement for the investment properties of $2,290.8 million as at 31 December 2015 has been
categorised as a Level 3 fair value based on the inputs to the valuation technique used (see note 2.4).
Level 3 fair values
The Level 3 fair value table which shows a reconciliation from the opening to the ending balance hierarchy are set out in
the table above.
Valuation technique and significant unobservable inputs
The following table shows the Group’s valuation technique used in measuring the fair value of investment properties,
as well as the significant unobservable inputs used.
Valuation
Significant unobservable Inter-relationship between key unobservable
Type
technique inputs
input and fair value measurement
Investment
Capitalisation • Capitalisation rate
The estimated fair value increases with decreases
properties
approach
(4.40% – 5.00%)
in the capitalisation rate.
– Singapore
Investment
Discounted • Discount rate (8.75%)
The estimated fair value increases with decreases
properties
cash flow • Terminal yield rate (6.50%)
in the discount rate and terminal yield rate.
– PRC
method
Investment
Capitalisation • Capitalisation rate (6.50%)
The estimated fair value increases with decreases
property under
approach
in the capitalisation rate.
development
– PRC
Direct
• Average value of RMB13,107 The estimated fair value increases with increases
comparison
per square metre
in average value of a similar class of assets.
Security
As at 31 December 2015, investment properties with a total carrying amount of $2,290.8 million were pledged as security
for loans and borrowings (see note 12).
