Annual Report 2019

150 Annual Report 2019 Miramar Hotel and Investment Company, Limited Notes to the Financial Statements 10 Investment properties, other property, plant and equipment (Continued) (d) The Group leases out properties under operating leases. The leases typically run for an initial period of 1 to 6 years, with an option to renew the lease after that date at which time all terms are renegotiated. Lease payments may be varied periodically to reflect market rentals and may contain a contingent rental element which is based on various percentages of tenant’s sales receipts. Future minimum lease income under non-cancellable operating leases are disclosed in note 26(a). The total variable lease income recognised in the consolidated statement of profit or loss for the year are HK$12,067,000 (2018: HK$15,662,000). (e) Right-of-use assets The Group has obtained the right to use other properties as its operating outlets through tenancy agreements. The leases typically run for an initial period of 1 to 11 years, with an option to renew the lease when all terms are renegotiated. Lease payments are usually increased annually to reflect market rentals. During the year ended 31 December 2019, the Group leased a number of operating outlets which contain variable lease payment terms that are based on sales generated from the operating outlets and minimum annual lease payment terms that are fixed. These payment terms are common in operating outlets in Hong Kong where the Group operates. The amount of fixed and variable lease payments recognised in profit or loss for the year is summarised below: Fixed payments Variable payments Total payments HK$’000 HK$’000 HK$’000 Operating outlets 14,755 118 14,873