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6. INVESTMENT PROPERTIES
Reconciliation of the carrying amount of investment properties:
June 2016
$000
June 2015
$000
Balance at the beginning
of the financial year
1,964,915
1,765,480
Acquisitions during the year
211
117,322
Divestments during the year
(7,519)
(17,366)
Reclassification to assets
held for sale
(3,093)
(16,357)
Capital improvements since
acquisition
7,553
7,328
Realised gains on disposal of
investment properties
-
371
Net unrealised gains from
fair value adjustments
202,633
108,137
Balance at the end of the
financial year
2,164,700
1,964,915
Recognition and measurement
Investment property is initially measured at cost and subsequently at
fair value with any change therein recognised in profit and loss.
Subsequent revaluations to fair value according to the Trust’s
revaluations policy may result in transaction costs appearing as a
negative adjustment (loss) in fair value.
Where assets have been revalued, the potential effect of the capital
gains tax (“CGT”) on disposal has not been taken into account in the
determination of the revalued carrying amount. The Trust does not
expect to be ultimately liable for CGT in respect of the sale of assets as
all realised capital gains would be distributed to unitholders.
Fair value – Hierarchy
The Trust is required to categorise the fair value measurement of
investment properties based on the inputs to the valuations technique
used. All investment properties for the Trust have been categorised on
a Level 3 fair value basis as some of the inputs required to value the
properties are not based on “observable market data”.
Fair value – Valuation approach
Key judgement
The Trust has a process for determining the fair value of
investment properties at each balance date, applying generally
accepted valuation criteria, methodology and assumptions
detailed below.
An independent valuer, having an appropriate professional
qualification and recent experience in the location and category of
property being valued, values individual properties every three years
on a rotation basis. The independent valuer determines the most
appropriate valuation method for each property (refer below).
In accordance with the Trust’s policy, the following properties were
independently valued at 30 June 2016:
Property
Valuation $000
Arundel
34,600
Bethania
27,900
Bibra Lake
24,000
Broadmeadows
28,300
Ellenbrook
30,300
Frankston
31,500
Geraldton
17,600
Geraldton Showrooms
3,050
Manly West
33,600
North Lakes
41,800
Oakleigh South
18,500
Rydalmere
51,000
Springvale
32,700
Sunbury
29,300
Thornleigh
18,700
Wagga Wagga
19,100
Properties that have not been independently valued as at balance date
are carried at fair value by way of directors’ valuation.
The directors adopt the following valuation methodologies for all
remaining properties, and these methodologies are subject to an
independent review process by Jones Lang LaSalle.
BWP Trust Annual Report 2016
35
Financial Report