Annual Report 2021

202 Transport International Holdings Limited 2021 Annual Report NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 13 Investment properties, investment property under development, interest in leasehold land and other property, plant and equipment (continued) (c) Fair value measurement of properties (continued) (ii) Valuation techniques and inputs used in Level 2 fair value measurement The fair value of its industrial property in Hong Kong as at 31 December 2021 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. (iii) Information about Level 3 fair value disclosures Valuation techniques Unobservable inputs Range Investment properties in Hong Kong – commercial properties Market comparison approach Discount/premium on quality of shops -80% to 30% (2020: -50% to 40%) Investment property under development in Hong Kong Market comparison and residual valuation approaches Discount/premium on quality of redevelopment -25% to 0% (2020: -40% to 0%) The Group adopted a market comparison approach for all its commercial properties in Hong Kong for the years ended 31 December 2021 and 2020. The fair value of commercial properties using a market comparison approach is determined by reference to the recent sales price of comparable properties on a price per square foot basis, adjusted for a premium or a discount specific to the quality of the Group’s commercial properties compared to recent sales. Higher premiums for higher quality buildings will result in a higher fair value measurement. The fair value of investment property under development located in Hong Kong is determined using market comparison and residual valuation approaches by reference to recent transaction data of nearby projects, and the recent sales price of comparable properties on a price per square foot basis, adjusted for a premium or a discount specific to the quality of the Group’s investment property under development compared to the recent transactions. A higher premium for higher quality redevelopment will result in a higher gross development value. (d) The Group leased out investment properties under operating leases. The leases typically run for an initial period from two to three years, with an option to renew the leases after that date, at which time all terms are renegotiated. Certain leases include contingent rentals, being the excess of a percentage of the monthly revenue generated by the lessees over the monthly minimum lease rentals. Undiscounted lease payments under non-cancellable operating leases in place at the reporting date will be receivable by the Group in future periods as follows: 2021 2020 $’000 $’000 Within 1 year 42,238 39,120 After 1 year but within 2 years 22,248 27,077 After 2 years but within 3 years 14,148 7,348 After 3 years but within 4 years 3,813 4,444 After 4 years but within 5 years 450 1,826 82,897 79,815