Annual Report 2021

ANNUAL REPORT 2021 145 18. INVESTMENT PROPERTIES (CONTINUED) The investment properties were revalued at the end of each reporting period by independent and professional qualified valuers not connected to the Group. In determining the fair value of the relevant properties, the management of the Company determine the appropriate valuation techniques and inputs for fair value measurements. In estimating the fair value of the properties, the highest and best use of the properties is their current use. There has been no change to the valuation technique or level of fair value hierarchy during the year. The fair value measurements for all of the Group’s investment properties are categorised as level 3 (see note 2.1). The valuation techniques and inputs used of the Group’s significant investment properties are set out below. Description Valuation techniques Significant unobservable inputs Relationship of non-observable inputs to fair value Commercial and residential complex in Shenzhen, the PRC 2021: HK$3,484 million 2020: HK$3,379 million Income approach Monthly market rent, taking into account the growth rate and rent of comparables, at a weighted average of HK$92 (2020: HK$85) per square metre (“sqm”) per month. A significant increase in the monthly market rent would result in a significant increase in the fair value, and vice versa. Capitalisation rate, at an average of 6.5% (2020: 6.5%). A significant increase i n t he c ap i t a l i s a t i on rate would result in a significant decrease in the fair value, and vice versa. Commercial properties in Shenzhen, the PRC 2021: HK$5,009 million 2020: HK$5,029 million Market comparison approach Market unit rate, taking into account the transaction dates, f l oo r a r e a s , l o c a t i on s and conditions of the property, which ranged from HK$87,642 to HK$91,013 (2020: HK$85,029 to HK$88,041) per sqm. A significant increase in the market unit rate used would result in a significant increase in the fair value, and vice versa.