213
CapitaLand Limited
Annual Report 2015
Overview
Sustainability
Business
Review
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Details
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Information
Notes to the Financial Statements
34 Fair Value of Assets and Liabilities
(continued)
(d) Level 3 fair value measurements
(continued)
(ii) Valuation techniques and significant unobservable inputs
The following table shows the valuation techniques used in measuring significant Level 3 fair values, as well
as the significant unobservable inputs used.
Valuation
methods
Key unobservable inputs
Shopping
malls
Commercial
and integrated
developments
Serviced
residences
Inter-relationship
between key
unobservable
inputs and
fair value
measurement
Capitalisation
approach
Capitalisation rate (net)
1
The estimated
fair value varies
inversely against
the capitalisation
rate and increases
with higher
occupancy rate.
2015
5.2% to 7.3% 3.8% to 13.0%
–
2014
5.4% to 7.3% 3.8% to 13.0%
–
Capitalisation rate (gross)
2
2015
–
6.0% to 7.0% 2.0% to 3.5%
2014
5.5% to 9.5% 6.0% to 7.0%
–
Occupancy rate
2015
82.9% to 100% 72.5% to 100% 95.0% to 97.0%
2014
97.7% to 100% 47.8% to 100%
–
Discounted
cashflow
approach
Discount rate
The estimated
fair value varies
inversely against
the discount rate
and terminal yield
rate and increases
with higher
occupancy rate.
2015
5.1% to 13.5% 3.9% to 14.5% 3.9% to 13.5%
2014
5.3% to 9.3% 4.0% to 13.0% 4.6% to 15.0%
Terminal yield rate
2015
5.4% to 12.0% 3.8% to 12.0% 3.0% to 11.0%
2014
5.6% to 7.1% 3.8% to 6.8% 3.0% to 12.0%
Occupancy rate
2015
86.1% to 100% 81.3% to 100% 55.0% to 100%
2014
98.8% to 100% 63.9% to 100% 49.2% to 100%
Residual
value
method
Gross development value
($ million)
The estimated fair
value increases
with higher gross
development value
and decreases
with higher cost to
completion.
2015
– 702.6 to 1,379.5
405.0
2014
– 653.1 to 1,269.2
405.0
Estimated cost to completion
($ million)
2015
– 147.0 to 246.2
92.1
2014
– 271.8 to 354.8
159.4
Direct
comparison
method
Comparable price
($ per square metre)
The estimated fair
value increases
with higher
comparable
price.
2015
–
1,546
–
2014
– 1,790 to 6,560
–
1
Net yield basis: after deducting property and related expenses
2
Gross yield basis: before deducting property and related expenses
