NOTES TO THE
FINANCIAL STATEMENTS
Year ended 31 December 2014
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.12 New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2014, and have not been applied in preparing these financial statements. None of these
are expected to have a significant effect on the financial statements of the Group and the Trust. The Group does
not plan to adopt these standards early.
4
INVESTMENT PROPERTIES
Group
Trust
2014
2013
2014
2013
$’000
$’000
$’000
$’000
At 1 January
1,483,820
1,427,331
1,021,400
980,400
Acquisition of investment properties
78,442
83,165
–
–
Acquisition related costs
3,637
4,152
–
–
Disposal of investment properties
(73,803)
–
–
–
Capital expenditure
5,059
4,352
3,598
3,668
Translation difference
(41,596)
(67,225)
–
–
1,455,559
1,451,775
1,024,998
984,068
Net change in fair value of investment
properties
45,051
32,045
28,602
37,332
At 31 December
1,500,610
1,483,820
1,053,600
1,021,400
Determination of fair value
Investment properties are stated at fair value based on valuations as at 31 December 2014 performed by
independent professional valuers having appropriate recognised professional qualification and experience in the
location and category of property being valued.
In determining the fair value, the valuers have used valuation methods which involved certain estimates. In relying
on the valuation reports, the Manager is of the view that the valuation methods and estimates are reflective of the
current market conditions.
The fair values are based on open market values, being the estimated amount for which a property could be
exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction
after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
The independent professional valuers have considered valuation techniques including direct income, cost,
discounted cash flow, and direct comparison approach in arriving at the open market value as at the reporting
date. The key assumptions used to determine the fair value of investment properties include market-corroborated
capitalisation yield, terminal yield, discount rate and average growth rate.
The direct income approach capitalises an income stream into a present value using revenue multipliers or single-
year capitalisation rates. The discounted cash flow approach involves the estimation and projection of an income
stream over a period and discounting the income stream with an approximate rate of return. The cost approach
involves the estimation of the replacement cost of improvements and the market value of the land. The direct
comparison approach involves the analysis of recent recorded transactions of comparable properties in the vicinity
after making the necessary adjustments where appropriate for differences.
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