NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2024 5 INVESTMENT PROPERTIES (CONT’D) The key assumptions used in estimating the recoverable amounts are set out below: 2024 China UK Australasia Capitalisation rate N/A 5.50% N/A Rental rate per bed per week N/A $284 to $301 N/A Gross development value N/A N/A $155 million Estimated cost to completion N/A N/A $67 million Price per square metre (“psm”) $639 psm N/A $12,402 psm 2023 China UK Capitalisation rate N/A 5.5% to 6.0% Gross development value $113 million N/A Estimated cost to completion $12 million N/A Price per square metre (“psm”) $707 psm N/A Sensitivity analysis The Group’s impairment review is sensitive to changes in the key assumptions used. An increase in rental rate per bed per week, price psm or gross development value in isolation would result in a higher recoverable amount. An increase in capitalisation rate or estimated cost to completion in isolation would result in a lower recoverable amount. (f) Determination of fair value The fair values for a majority of the Group’s investment properties are determined by independent external valuers who have appropriate recognised professional qualifications and recent experience in the location and category of the investment properties being valued. The fair values of certain investment properties located in Singapore are based on in-house valuations conducted by a licensed valuer who is also an officer of the Company. The internal valuer has appropriate recognised professional qualifications and experience in the location and category of the investment properties being valued. The fair values of the investment properties were estimated using the direct comparison, discounted cash flow, income capitalisation, standardised land value adjustment and residual methods. The direct comparison method involves an analysis of comparable sales of similar properties and adjusting the transacted prices to those reflective of the investment properties of the Group. The discounted cash flow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value. The income capitalisation method capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. The standardised land value adjustment method considers the price of standard land in the current situation of development and utilisation, under normal market conditions within legal maximum use term as at a special date, that is assessed and approved by the local government. The residual method involves deducting the estimated cost to complete as of valuation date and other relevant costs from gross development value of the proposed development assuming satisfactory completion and accounting for developer’s profit. The fair value disclosure for the investment properties for the Group and the Company has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used. FINANCIALS CITY DEVELOPMENTS LIMITED 130
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