Annual Report 2019

189 ANNUAL REPORT 2019 19. INVESTMENT PROPERTIES (CONTINUED) The fair value measurements for all of the Group’s investment properties are categorised as level 3 (see note 2.1). Description Valuation techniques Significant unobservable inputs Relationship of non-observable inputs to fair value Commercial and residential complex in Shenzhen, the PRC Investment approach Monthly market rent, taking into account the growth rate and rent of comparables, at an average of HK$91 (2018: HK$86 ) pe r s qua r e me t r e (“sqm”) per month. Cap i t a l i s a t i on r a t e , a t an average of 6.5% (2018: 6.5%). A significant increase in the rental income would result in a significant increase in the fair value, and vice versa. A significant increase in the capitalisation rate would result in a significant decrease in the fair value, and vice versa. Commercial properties in Shenzhen, the PRC Market comparison approach Market unit rate, taking into account the transaction dates, f l oo r a r ea s , l oca t i ons and conditions of the property, which ranged from HK$89,306 to HK$90,422 (2018: HK$83,314 to HK$86,738) per sqm. A significant increase in the market unit rate used would result in a significant increase in the fair value, and vice versa. In estimating the fair value of the properties, the highest and best use of the properties is their current use. There has been no change to the valuation technique or level of fair value hierarchy during the year.