Notes to the Financial Statements Year ended 31 December 2024 6 INVESTMENT PROPERTIES UNDER DEVELOPMENT (continued) The following table shows the significant unobservable inputs used in the valuation models: Valuation technique Significant unobservable inputs Inter-relationship between key unobservable inputs and fair value measurement Under the residual land value method of valuation, the total gross development costs and developer’s profit are deducted from the gross development value to arrive at the residual value of land. The gross development value is the estimated value of the property assuming satisfactory completion of the development as at the date of the valuation. Stapled Group • Discount rate: Singapore 5.32% (2023: 5.57%) • Terminal capitalisation rate: Singapore 3.50% (2023: 3.50%) • Gross development costs: Singapore $138,540,000 (2023: $143,730,000) The estimated fair value would increase (decrease) if: • the discount rate was lower (higher); • the terminal capitalisation rate was (higher); or • the gross development costs decrease (increase). Sensitivity analysis for key unobservable inputs The significant unobservable inputs used in the fair value measurement of the Stapled Group’s investment properties under development are discount rate, terminal capitalisation rate and gross development costs. Significant decreases in the discount rate, terminal capitalisation rate and gross development costs in isolation would result in a significantly higher fair value measurement. Conversely, a significant increase would result in a significantly lower fair value measurement. 7 INVESTMENT SECURITIES CapitaLand Ascott REIT Group holds 1% interest in Ascendas Hospitality Australia Investment Fund No. 1 (“AHAIF1”). The CapitaLand Ascott REIT Group’s ownership in AHAIF1 enables AHAIF1 to meet the Australian corporate law requirement for a Managed Investment Scheme and certain requirements to qualify as a Managed Investment Trust under the Australian tax law. AHAIF1 owns 100% equity interest in Ascendas Australia Hotel Trust, which owns the hotel properties in Australia. Investments in unquoted investment securities are measured at fair value with change in fair value recognised in the Statement of Total Return. As at 31 December 2024, the fair value of the CapitaLand Ascott REIT Group’s 1% interest in AHAIF1 is $1,977,000 (2023: $2,454,000). The effective interest held by the Stapled Group is 100%. Upon consolidation, the investment securities will be adjusted against the non-controlling interests of the CapitaLand Ascott BT Group. 183 Annual Report 2024
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