Notes to the Financial Statements For the financial year ended 31 December 2024 31 FAIR VALUE OF ASSETS AND LIABILITIES (continued) (c) Level 3 fair value measurements (i) Reconciliation of Level 3 fair value The movements of financial and non-financial assets classified under Level 3 and measured at fair value are presented as follows: Equity investments at FVTPL Assets held for sale – investment properties The Group $’M $’M 2024 At 1 January 2024 100 731 Additions 34 – Disposals – (731) Changes in fair value recognised in profit or loss 4 – Translation (1) – At 31 December 2024 137 – 2023 At 1 January 2023 111 352 Additions 14 731 Disposals (17) (352) Changes in fair value recognised in profit or loss (8) – At 31 December 2023 100 731 Movements for investment properties are set out in note 5. 168 CapitaLand Investment Limited Notes to the Financial Statements For the financial year ended 31 December 2024 31 FAIR VALUE OF ASSETS AND LIABILITIES (continued) (c) 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. Investment properties (including investment properties classified as assets held for sale) Valuation methods Geography Key unobservable inputs Inter-relationship between key unobservable inputs and fair value measurement Capitalisation approach Singapore – Capitalisation rate: 6.0% (2023: 6.0%) The estimated fair value varies inversely against the capitalisation rate. China – Capitalisation rate: 4.4% to 6.3% (2023: 4.3% to 7.0%) Others – Capitalisation rate: 4.8% to 10.3% (2023: 4.8% to 8.8%) Discounted cash flow approach Singapore – Discount rate: 7.8% (2023: 5.6% to 7.8%) – Terminal yield rate: 6.3% (2023: 3.5% to 6.3%) The estimated fair value varies inversely against the discount rate and terminal yield rate. China – Discount rate: 6.9% to 9.3% (2023: 6.8% to 10.0%) – Terminal yield rate: 4.6% to 6.5% (2023: 4.5% to 7.3%) Others – Discount rate: 8.6% to 15.3% (2023: 3.2% to 15.5%) – Terminal yield rate: 4.8% to 11.0% (2023: 3.0% to 11.0%) Residual value method Singapore – Gross development value: $Nil (2023: $144 million) – Estimated cost to completion: $Nil (2023: $97 million) The estimated fair value increases with higher gross development value and decreases with higher estimated cost to completion. China – Gross development value: $614 million (2023: $617 million) – Estimated cost to completion: $63 million (2023: $63 million) Type Valuation methods Key unobservable inputs Inter-relationship between key unobservable inputs and fair value measurement Equity investments at FVTPL Discounted cash flow method – Discount rate: 2.7% to 9.5% (2023: 2.7% to 9.5%) – Terminal yield rate: 3.0% to 7.0% (2023: 3.0% to 7.0%) The estimated fair value increases with lower discount rate and terminal yield rate. Equity investment in a lodging platform in China at FVTPL Income approach – Enterprise value/Revenue multiple of comparable companies: 3.9x (2023: 3.8x) – Volatility of comparable companies: 57% (2023: 38%) The estimated fair value increases with higher revenue multiple and varies inversely against lower volatility. 169 Annual Report 2024
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