Notes to the Financial Statements Year ended 31 December 2024 Valuation technique Significant unobservable inputs Inter-relationship between key unobservable inputs and fair value measurement Direct capitalisation method: The valuation method considers the net present value of the expected future operating income of the property and dividing them by the capitalisation rate. This method is applied to the student accommodation properties which have relatively stable operating histories and expectations. Stapled Group • Capitalisation rate: United States of America: 5.00% – 6.00% (2023: 5.50% – 6.00%) The estimated fair value would increase (decrease) if the capitalisation rate was lower (higher). Sensitivity analysis for key unobservable inputs The significant unobservable inputs used in the fair value measurement of the Stapled Group’s investment properties are discount rate, terminal capitalisation rate and capitalisation rate. Significant decreases in the discount rate, terminal capitalisation rate and capitalisation rate in isolation would result in a significantly higher fair value measurement. Conversely, a significant increase would result in a significantly lower fair value measurement. 4 INVESTMENT PROPERTIES (continued) 175 Annual Report 2024
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