Annual Report 2021

151 Notes to the Financial Statements Miramar Hotel and Investment Company, Limited Annual Report 2021 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 5 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 is disclosed in note 25. The total variable lease income recognised in the consolidated statement of profit or loss for the year are HK$9,809,000 (2020: HK$6,392,000). (e) Right-of-use assets The Group has obtained the right to use other properties as its operating outlets through tenancy agreements. The leases typically run for an initial period of 1 to 11 years, with an option to renew the lease when all terms are renegotiated. Lease payments are usually increased annually to reflect market rentals. The Group leased a number of operating outlets which contain variable lease payment terms that are based on sales generated from the operating outlets and minimum annual lease payment terms that are fixed. These payment terms are common in operating outlets in Hong Kong where the Group operates. During the year, the Group received rent concessions in the form of a discount on fixed payments during the period of severe social distancing and travel restriction measures introduced to contain the spread of COVID-19. The amounts of fixed and variable lease payments and COVID-19 rent concessions for the year are summarised below: Year ended 31 December 2021 Fixed payments Variable payments COVID-19 rent concessions HK$’000 HK$’000 HK$’000 Operating outlets 927 505 (10,384) Year ended 31 December 2020 Fixed payments Variable payments COVID-19 rent concessions HK$’000 HK$’000 HK$’000 Operating outlets 4,001 132 (14,274) As disclosed in note 1(c), the Group has adopted the Amendment to HKFRS 16 and has applied the practical expedient to all eligible rent concessions received by the Group.