17 INVESTMENT PROPERTIES (CONTINUED)
Description of valuation techniques used and key inputs to valuation on investment properties.
Valuation
technique Significant unobservable inputs
Range (weighted average)
2015
2014
Land and
buildings
Comparison
method Location, visibility, size and tenure
–
–
(Carrying value as at 31 December 2015 of RM69,179,000)
Office
properties
Investment
method
Estimated rental value per sqft per month
RM3.00 – RM4.00 RM3.00 – RM3.80
Outgoings per sqft per month
RM1.45 – RM1.52 RM1.45 – RM1.56
Void rate
5%-7.5%
5%-10%
Term yield
6%-6.25%
6.2%-6.5%
(Carrying value as at 31 December 2015 of RM210,654,000)
Inter-relationship between significant unobservable inputs and fair value measurement
(a) Comparison method
Generally a location and visibility that is relatively more prominent will result in a higher fair value. A longer tenure will
have the same effect.
(b) Investment method
Increases/(decreases) in estimated rental value per sqft in isolation would result in a higher/(lower) fair value of the
properties. Increases/(decreases) in the long-term vacancy rate (void rate) and discount rate (term yield) in isolation
would result in a 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.
A sensitivity analysis has been performed on the significant assumptions that impact the fair value of the office
properties. Arising thereof, the impact of a 10 basis points increase/decrease in the term yield will result in a lower/
higher fair value charge by RM3 million, while a void rate of 10% will result in a lower fair value charge by RM3 million.
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NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
