NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 4 PROPERTY, PLANT AND EQUIPMENT (CONT’D) The key assumptions used in estimating the recoverable amounts are set out below: US Europe New Zealand Occupancy rate 2023 63.0% to 95.0% 70.0% to 77.0% N/A 2022 65.0% to 95.0% 70.0% to 76.0% 62.6% to 69.1% Average room rate growth 2023 0.0% to 16.7% 0.0% to 15.0% N/A 2022 2.0% to 10.0% 1.1% to 9.1% 2.0% to 3.0% Discount rate 2023 8.5% to 11.5% 9.3% N/A 2022 8.3% to 10.5% 7.3% to 11.3% 10.3% Terminal rates 2023 6.5% to 9.5% 4.5% N/A 2022 6.0% to 8.5% 4.0% to 7.8% 9.5% The cash flow forecasts under the discounted cash flow method cover a ten years (2022: five to ten years) period, and cash flows beyond this period are extrapolated using a growth rate ranging between 2.0% and 3.0% (2022: 2.2% and 3.4%), which is based upon the expected trading growth for each hotel and inflation in the country in which the hotel is located. Sensitivity analysis The Group’s impairment review is sensitive to changes in the key assumptions used. An increase in occupancy rate and/or average room rate growth in isolation would result in a higher recoverable amount. An increase in discount rate, terminal rate or capitalisation rate in isolation would result in a lower recoverable amount. 5 INVESTMENT PROPERTIES Note Group Company $’000 $’000 Cost At 1 January 2022 6,215,033 605,950 Acquisition of subsidiaries, including acquisition costs 39 387,791 – Additions 532,671 4,973 Disposal/Written off (111,747) – Transfers to development properties (90,685) – Transfers from development properties 8,179 – Transfers from property, plant and equipment 4 5,884 2,570 Disposal of subsidiaries 39 (496,882) – Translation differences on consolidation (312,865) – At 31 December 2022 6,137,379 613,493 At 1 January 2023 6,137,379 613,493 Acquisition of subsidiaries, including acquisition costs 39 635,489 – Additions 858,528 14,724 Disposal/Written off (53,109) (543,655) Translation differences on consolidation (4,210) – At 31 December 2023 7,574,077 84,562 Accumulated depreciation and impairment losses At 1 January 2022 1,232,187 192,798 Charge for the year 115,954 14,204 Disposal/Written off (91,924) – Transfers to development properties (38,758) – Disposal of subsidiaries 39 (63,561) – Impairment loss recognised 35,728 – Translation differences on consolidation (19,261) – At 31 December 2022 1,170,365 207,002 At 1 January 2023 1,170,365 207,002 Charge for the year 115,012 13,810 Disposal/Written off (42,283) (192,096) Impairment loss recognised 43,749 – Translation differences on consolidation (3,810) – At 31 December 2023 1,283,033 28,716 Carrying amounts At 1 January 2022 4,982,846 413,152 At 31 December 2022 4,967,014 406,491 At 31 December 2023 6,291,044 55,846 Fair value At 1 January 2022 10,966,900 1,662,892 At 31 December 2022 10,899,043 1,820,028 At 31 December 2023 12,435,975 363,418 FINANCIALS FINANCIALS ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED 165 164
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