Annual Report 2024

232 2024 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 14 Investment properties and investment property under development (continued) (b) Fair value measurement (continued) As at 31 December 2023, the Group’s investment property under development was valued using the residual method by estimating the value of the property when completed using income capitalisation method with reference to comparable sales transactions assuming that the property had been completed in accordance with the current development plan on the valuation date less the costs that will be incurred to complete the development with appropriate allowance for profit and risk. Set out below are the significant unobservable inputs used for fair value measurements: Unobservable inputs Range Investment properties in Hong Kong – commercial properties and industrial properties Capitalisation rate 3.50% to 4.75% (2023: 3.50% to 4.75%) Investment property under development in Hong Kong Capitalisation rate 3.50% (2023: 3.50%) The fair values of the Group’s investment properties and investment property under development are inversely to related capitalisation rates, which are determined by reference to investors’ expectations on investment yields, rental growth and the risk profile of the properties being valued. A lower (higher) capitalisation rate would imply a higher (lower) property value. Fair value adjustment of investment properties and investment property under development is recognised in the line item “Change in fair value of investment properties and investment property under development” on the face of the consolidated statement of profit or loss. (c) The Group leased out investment properties under operating leases. The leases typically run for an initial period from one to eight 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: 2024 2023 $’000 $’000 Within 1 year 95,849 76,421 After 1 year but within 2 years 80,356 69,546 After 2 years but within 3 years 67,869 51,926 After 3 years but within 4 years 40,453 46,870 After 4 years but within 5 years 34,382 36,588 After 5 years 8,455 39,490 327,364 320,841