17. INVESTMENT PROPERTIES (CONT’D.) Reconciliation of fair values: (cont’d.) Freehold Leasehold land and land and buildings buildings Total RM’000 RM’000 RM’000 At 1 January 2023 135,128 1,225,724 1,360,852 Additions 334 – 334 Re-measurement recognised in profit or loss 1,425 (1,120) 305 Disposal (2,500) – (2,500) Transfer from property, plant and equipment (Note 14) – 4,240 4,240 Transfer to assets classified as held for sale (Note 27) – (26,200) (26,200) Adjustment1 – (230) (230) At 31 December 2023 134,387 1,202,414 1,336,801 Description of valuation techniques used and key inputs to valuation on investment properties: Valuation techniques Significant unobservable inputs Range 2024 2023 Commercial building Investment method* Estimated rental value RM3.00 to RM3.00 to per sqft per month RM12.00 RM12.00 Long-term vacancy rate 3.50% to 5% 3.50% to 5.5% Yield rate 4.75% to 6.5% 4% to 6.25% Commercial building Cost method** Estimated construction costs RM28 to RM15 to per sqft RM370 RM167 Land Comparison method The comparison method -40% to 10% -35% to 50% entails analysing recent transactions and asking prices of similar property in and around the locality for comparison purposes with adjustments made for differences in location, visibility, size and tenure. * The investment method entails determining the net annual income by deducting the annual outgoings from the gross annual income and capitalising the net income by a suitable rate of return consistent with the type and quality of the investment to arrive at the market value of the subject property. ** Buildings are valued by reference to the current estimates on construction costs to erect equivalent buildings, taking into consideration of similar accommodation in terms of size, construction, finishes, contractors’ overheads, fees and profits. Appropriate adjustments are then made for the factors of obsolescence and existing physical condition of the building. FINANCIAL STATEMENTS & OTHER INFORMATION 279
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