NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION For the six months ended 30 June 2022 13. INVESTMENT PROPERTIES (continued) (d) Fair value hierarchy (continued) The movements in fair value measurements within Level 3 during the period are as follows: For the six months ended 30 June 2022 2021 (Unaudited) (Unaudited) US$’000 US$’000 At 1 January 3,250,778 2,550,909 Additions 105,270 460,883 Acquisition of subsidiaries 44,941 226,364 Changes in fair value of investment properties 126,916 145,774 Reclassification to asset held for sale (726,716) – Exchange realignment (212,295) (21,096) At 30 June 2,588,894 3,362,834 The valuation of investment properties categorised within Level 2 of the fair value hierarchy are based on comparable market transactions that consider sales of similar properties that have been transacted in the open market. Below is a summary of the valuation techniques used and the key unobservable inputs to the valuation of investment properties categorised within Level 3 of the fair value hierarchy: Investment property details Valuation technique Key unobservable inputs Inter-relationship between key unobservable inputs and fair value measurement Warehouse properties Income capitalisation Capitalisation rate: China: 5.40% to 6.85% (2021: 5.00% to 6.25%) Japan: 3.30% to 5.10% (2021: 3.90% to 5.60%) Hong Kong: 3.00% (2021: 3.00%) India: 8.00% (2021: 8.00%) The estimated fair value varies inversely against the capitalisation rate Discounted cash flow Discount rate: China: 7.75% to 9.00% (2021: 8.00% to 9.25%) Japan: 3.80% to 5.00% (2021: 3.70% to 6.00%) Hong Kong: 7.00% (2021: 7.00%) India: 10.35% to 13.85% (2021: 12.85% to 13.70%) The estimated fair value varies inversely against the discount rate Terminal capitalisation rate: China: 4.75% to 6.25% (2021: 5.00% to 6.25%) Japan: 3.90% to 5.50% (2021: 4.00% to 5.50%) Hong Kong: 3.00% (2021: 3.00%) India: 8.00% (2021: 8.00%) The estimated fair value varies inversely against the terminal capitalisation rate R E A C H I N G N E W H E I G H T S 66
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