Annual Report 2023

151 ANNUAL REPORT 2023 18. INVESTMENT PROPERTIES (CONTINUED) 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 2023: HK$3,141 million 2022: HK$3,185 million Income approach Monthly market rent, taking into account the growth rate and rent of comparables, at a weighted average of RMB77 (2022: RMB80) 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% (2022: 6.5%). A significant increase in the capitalisation rate would result in a significant decrease in the fair value, and vice versa. Commercial properties in Shenzhen, the PRC 2023: HK$4,609 million 2022: HK$4,583 million Market comparison approach Market unit rate, taking into account the transaction dates, floor areas, locations and conditions of the property, which ranged from RMB68,807 to RMB69,725 (2022: RMB71,560 to RMB75,229) per sqm. A significant increase in the market unit rate used would result in a significant increase in the fair value, and vice versa.