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LIPPO MALLS INDONESIA RETAIL TRUST ANNUAL REPORT 2014
14. INVESTMENT PROPERTIES
Group
2014
2013
$’000
$’000
At valuation:
Fair value at beginning of year
1,412,204 1,753,322
Acquisition of investment properties
(1)
333,062
–
Enhancement expenditure capitalised
5,654
3,741
1,750,920 1,757,063
Increase/(decrease) in fair value included in profit or loss
4,536
(24,022)
Translation differences
51,488
(320,837)
Fair value at end of year
1,806,944 1,412,204
Rental and service income from investment properties
136,985
152,599
Direct operating expenses (including repairs and maintenance)
arising from investment properties that generated rental income during the year
(10,978)
(9,239)
(1)
The addition in 2014 was relating to the acquisition of Lippo Mall Kemang. This amount also included an acquisition fee of $3,620,000
and other acquisition related expenses of $1,475,000.
These investment properties include the mechanical and electrical equipment located in the respective properties.
The fair value of each investment property was measured in December 2014 based on the highest and best use method
to reflect the actual market state and circumstances as of the end of the reporting year. The fair value was based
on valuations made by independent professional valuers on a systematic basis at least once yearly. The independent
professional valuers hold a recognised and relevant professional qualification with sufficient recent experience in the
location and category of the investment property being valued. The valuations were based on discounted cash flow
method. There has been no change to the valuation technique during the year. Management determined that the
highest and best use of the asset is the current use and that it would provide maximum value to market participants
principally through its use in combination with other assets.
Notes to the Financial Statements
(Cont’d)
31 December 2014
