14. INVESTMENT PROPERTIES (CONTINUED)
Description of valuation techniques used and key inputs to valuation on investment properties
Valuation technique
Significant unobservable inputs
Range (weighted average)
Land and building
Comparison method
(i)
–
–
Office properties
Investment method
(ii)
Estimated rental value per sqft
per month
RM3.60 – RM5.30
Outgoings per sqft per month
RM1.45 – RM1.56
Void rate
5% – 7.5%
Term yield
6.2% – 6.5%
(i) The comparison method entails analysing recent transactions and asking prices of similar property in and around the locality for
comparison purposes with adjustments made for differences in location, visibility, size, tenure, etc.
(ii) The investment method entails determining the net annual income by deducting the annual outgoings from the gross annual income and
capitalising the net income by suitable rate of return consistent with the type and quality of the investment to arrive at the market value
of the subject property.
Inter-relationship between significant unobservable inputs and fair value measurement
Investment method
Significant increases/(decreases) in estimated rental value per sqft in isolation would result in a significantly higher/(lower)
fair value of the properties. Significant increases/(decreases) in the long-term vacancy rate (void rate) and discount rate (term
yield) in isolation would result in a significantly lower/(higher) fair value.
Generally, a change in the assumption made for the estimated rental value is accompanied by a directionally similar change
in the rental value per sqft and an opposite change in the void rate and term yield.
15. INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries is made up as follows:
Company
2014
2013
RM’0
RM’000
RM’000
Unquoted shares, at cost
948,920
947,920
245
Notes to the
Financial Statements
For the financial year ended 31 December 2014 (continued)
KPJ Healthcare Berhad annual report
2014
