Annual Report 2025

228 Transport International Holdings Limited 2025 Annual Report 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 2024, the Group’s investment property under development was valued using the income capitalisation approach by capitalising net income from the existing tenancies and reversionary income potential at appropriate capitalisation rates for individual properties less the costs that would be incurred to complete the development. The capitalisation rate adopted was derived by making reference to the yields achieved from analysis of comparable property investment transactions and valuer’s view of prevailing investor expectations regarding rental growth and perceived risks. 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% (2024: 3.50% to 4.75%) Investment property under development in Hong Kong Capitalisation rate N/A (2024: 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: 2025 2024 $’000 $’000 Within 1 year 103,992 95,849 After 1 year but within 2 years 91,753 80,356 After 2 years but within 3 years 61,646 67,869 After 3 years but within 4 years 44,821 40,453 After 4 years but within 5 years 17,048 34,382 After 5 years 8,950 8,455 328,210 327,364