NOTES TO THE
FINANCIAL STATEMENTS
Year ended 31 December 2014
4
INVESTMENT PROPERTIES (CONT’D)
Valuation processes applied by the Group and Trust
As explained under note 3.3, valuation of investment properties is performed in accordance with the Trust Deed. In
assessing the fair value measurements, the Manager reviews the valuation methodologies and evaluates the
assessments made by the valuers.
Fair value hierarchy
The table below analyses the fair value measurement for investment properties of the Group and the Trust that
have been categorised as Level 3 fair values based on inputs to the valuation technique used.
Level 3
$’000
31 December 2014
Group
Investment properties
1,500,610
Trust
Investment properties
1,053,600
31 December 2013
Group
Investment properties
1,483,820
Trust
Investment properties
1,021,400
The following table shows the key unobservable inputs used in the valuation model:
Type
Key unobservable inputs
Inter-relationship between key
unobservable inputs and fair
value measurement
Investment properties
Discounted cash flow approach and Capitalisation approach
Healthcare related properties for
leasing when comparable prices
per square metre for comparable
buildings and leases are not available
• Risk-adjusted discount rates
range from 5.3% to 8%
(2013: 5.5% to 8%).
• Capitalisation rates range
from 5.0% to 7.9%
(2013: 4.5% to 8%).
The estimated fair value would
increase/(decrease) if:
• the risk-adjusted discount
rates were lower/(higher); or
• the capitalisation rates were
lower/(higher).
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PA R K WAY L I F E R E I T
