5. INVESTMENT PROPERTIES (continued) Valuation processes (continued) The following table shows the valuation techniques used in the determination of fair values of investment properties, as well as the significant unobservable inputs used in the valuation models. Valuation technique Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement Discounted cash flow approach: The method involves the estimation and the projection of an income stream over a period and discounting the income stream with an appropriate rate of return. • Risk-adjusted discount rates range from 4.0% to 7.0% (2022: 4.2% to 7.0%) • Terminal yield rates range from 4.3% to 6.5% (2022: 4.5% to 6.6%) The estimated fair value would increase/(decrease) if: • the risk-adjusted discount rates were lower/(higher); or • the terminal yield rates were higher/(lower). Direct comparison approach: The method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that reflective of the investment properties. • Premium made for differences in type of development (including design, use and proximity to complementary businesses) range from 0% to 30% (2022: 0% to 30%) The estimated fair value would increase/(decrease) if premium made for differences in type of development was higher/(lower). Direct capitalisation approach: The method capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. • Capitalisation rates range from 4.2% to 6.4% (2022: 4.4% to 6.5%) The estimated fair value would increase/(decrease) if the capitalisation rates were lower/ (higher). Annual Report 2023 163
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