For the financial year ended 31 December 2015
79
ANNUAL REPORT 2015
11. INVESTMENT PROPERTIES
The Group
2015
2014
$’000
$’000
Beginning of financial year
225,249
222,139
Improvements
2,282
339
Fair value changes on investment properties recognised in profit or loss (net)
(1,967)
3,075
Disposal of investment property
(9,795)
–
Currency translation differences
(4,946)
(304)
End of financial year
210,823
225,249
At valuation:
Freehold and 999-year leasehold properties
33,223
47,149
Leasehold properties
177,600
178,100
The Group’s investment properties consist of both commercial and industrial properties. Investment properties are
mainly leased to third parties under operating leases (Note 25(b)).
The Group engages external, independent and qualified valuers to determine the fair value of the Group’s properties at
the end of every financial year based on the properties’ highest and best use. Discussions on the valuation processes,
key inputs applied in the valuation approach and the reasons for the fair value changes are held amongst the Group’s
property manager, the chief financial officer and the independent valuer annually.
Fair value changes of investment properties amounted to a net loss of $1,967,000 (2014: net gain of $3,075,000).
These fair value changes are non-cash in nature.
The following amounts are recognised in profit or loss:
The Group
2015
2014
$’000
$’000
Rental income (Note 4)
13,531
16,387
Direct operating expenses arising from investment
properties that generated rental income
(5,070)
(4,882)
Certain investment properties valued at $177,600,000 (2014: $178,100,000) are pledged to the banks as security for
bank credit facilities (Note 20).
NOT E S TO T H E F I NAN C I A L S TAT EME N T S
(CONTINUED)
