2013 — Page 88

86

Hong Kong Ferry (Holdings) Company Limited Annual Report 2013

Notes to the Accounts (Continued)

13

FIXED ASSETS (Continued)

(a)

Fair value measurement of investment properties (Continued)

(ii)

Information about Level 3 fair value measurements

The fair values of investment properties were determined using income capitalisation approach which

capitalised the net income of the properties and taking into account the reversionary potential of

properties after expiry of the current leases except for an investment property which was determined

using market comparison approach by reference to recent sales price of comparable properties on a

price per square foot basis using market data which is publicly available.

Below is a table which presents the significant unobservable inputs:

Income capitalisation approach

- Retail

- Car park

Market comparison approach

- Godown

Range of

capitalisation rates

%

Range of occupancy rates

%

4.25% -5.5%

4.75% 6.5%

60% - 100%

-

76% - 100%

Market unit

sales price HK$/sq. ft.

424 - 429

The fair value measurement of investment properties is positively correlated to the occupancy rate and market unit sales price and negatively correlated to the capitalisation rate.

The movements during the year in the balance of these Level 3 fair value measurements are as follows:

Investment properties

At 1 January 2013

Disposals

Valuation gains

At 31 December 2013

HK$'000

1,182,800

(24,000)

93,100

1,251,900