S E C T I O N 6 F I N A N C I A L R E P O R T S 159 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 (CONT’D) 10. Investment properties (cont'd.) The fair value of the investment properties are classified as Level 3 for fair value hierarchy disclosure purposes. The significant unobservable inputs applied by the independent valuer in applying the investment method above are as follows: Inter-relationship between significant unobservable inputs Significant unobservable inputs and fair value measurement Term yield ranging from 5.00% - 6.75% Higher term yield rates, (2020: 5.80% - 7.50%) lower fair value Reversionary yield ranging from 5.50% - 7.25% Higher reversionary yield rates, (2020: 6.00% - 7.80%) lower fair value Discount rate ranging from 5.50% to 7.25% Higher discount rate, lower fair (2020: 6.00% - 7.80%) value Allowance for void of 2.50% - 10.00% Higher allowance for void rate, (2020: 0.00% - 20.00%) lower fair value The valuer had adopted market corroborated capitalisation rates, which is the most frequently adopted methodology by the property industry in Malaysia, based on information pertaining to recent comparable sales which are publicly available, adjusted for the location, quality and characteristics of the investment properties.
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