Annual Report 2016
155
Financial Section
16 Investment Properties
(continued)
Valuation techniques
(continued)
Range of significant unobservable inputs
2015
Fair value
Valuation
techniques
Prevailing market
rent per month
Unit price
Capitalisation
rate
HK$m
Completed investment properties
Hong Kong
Commercial
33,708.4 Income capitalisation
HK$14–HK$480
per square feet
N/A
1.6%–7.5%
Carparks
1,487.7 Income capitalisation
HK$3,200–
HK$5,600 per
carpark space
N/A
4.5%–6.5%
Mainland China
Commercial
14,594.0 Income capitalisation
HK$29–HK$286
per square metre
N/A
3.0%–8.5%
Carparks
5,919.4 Direct comparison
N/A
HK$81,000–
HK$481,000 per
carpark space
N/A
Residential
2,935.1 Income capitalisation
HK$11–HK$208
per square metre
N/A
4.0%–15.0%
Total
58,644.6
Range of significant unobservable inputs
2015
Fair value
Valuation
technique
Unit price
Estimated
developer’s
profit and risk
margins
HK$m
Investment properties under development
Commercial
31,573.3 Residual
HK$1,750–HK$53,500
per square feet
5.0%–25.0%
Carparks
1,323.3 Residual
HK$125,000–
HK$262,500
per carpark space
0.3%–5.0%
Residential
83.8 Residual
HK$14,400
per square metre
7.0%
Total
32,980.4
Prevailing market rents are estimated based on independent valuers’ view of recent lettings, within the subject properties
and other comparable properties. The higher the rents, the higher the fair value.
Capitalisation rates and developer’s profit and risk margins are estimated by independent valuers based on the risk profile
of the properties being valued and the market conditions. The lower the rates and the margins, the higher the fair value.
At 30 June 2016, the aggregate fair value of completed investment properties and investment properties under development
pledged as securities for the Group’s borrowings amounted to HK$34,412.0 million (2015: HK$31,881.0 million) and
HK$4,600.0 million (2015: nil).
