Notes to the Financial Statements Year ended 31 December 2024 4 INVESTMENT PROPERTIES (continued) Measurement of fair value Fair value hierarchy The fair value of investment properties is determined by external property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the properties being valued. The fair value measurement for the investment properties have been categorised as level 3 fair values based on inputs to the valuation techniques used. The following table reconciles the net carrying value of the investment properties to the fair value. CapitaLand Ascott REIT Group CapitaLand Ascott BT Group Stapled Group 2024 2023 2024 2023 2024 2023 $’000 $’000 $’000 $’000 $’000 $’000 Carrying value of investment properties 6,556,284 6,498,182 419,331 424,990 6,561,673 6,501,017 Less: Carrying amount of lease liabilities (240,546) (263,965) (60,036) (69,567) (240,546) (263,965) Fair value of investment properties 6,315,738 6,234,217 359,295 355,423 6,321,127 6,237,052 Level 3 fair values Reconciliations from the beginning balances to the ending balances for fair value measurements of level 3 are set out in the table above. Valuation technique and significant unobservable inputs The Stapled Group’s investment property portfolio is valued by external property valuers annually. External valuations are also carried out on occurrence of acquisitions. The fair values are based on open market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably and without compulsion. The valuers have adopted the income capitalisation approach and considered valuation techniques including discounted cash flow and direct capitalisation methods (2023: discounted cash flow and direct capitalisation methods) in arriving at the fair value as at the reporting date. In determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions used to determine the fair value of investment properties include market-corroborated discount rate, terminal capitalisation rate, capitalisation rate and revenue per available unit. The valuation of the Stapled Group’s investment property portfolio is discussed with the ARC and Board of Directors in accordance with the Stapled Group’s reporting policies. 173 Annual Report 2024
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