✨ Financial Statements
1 AUGUST 2014
NEW ZEALAND GAZETTE, No. 84
2359
The Canterbury Community Trust
Notes to the financial statements
For the year ended 31 March 2014
in New Zealand Dollars ($000’s)
11 Investment property
| Group 2014 | Group 2013 | Trust 2014 | Trust 2013 | |
|---|---|---|---|---|
| Balance at 1 April | 28,425 | 27,555 | 0 | 0 |
| Acquisitions | 5,382 | 6,766 | 0 | 0 |
| Disposals | (210) | (5,800) | 0 | 0 |
| Change in fair value (unrealised) included in other income | 788 | (96) | 0 | 0 |
| Balance at 31 March | 34,385 | 28,425 | 0 | 0 |
Investment property comprises a number of commercial properties that are leased to third parties: 95 Oxford Terrace, 105-107 Blenheim Road, 55 Shands Road, 126-128 Montreal Street (Christchurch), 16 Parumoana Street (Porirua), and 188 Hardy Street (Nelson). 126-128 Montreal Street was purchased in 2014.
Measurement of fair value
The fair value of investment property was determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The independent valuers provide the fair value of the Group’s investment property portfolio at least annually.
The market value for each investment property has been established after consideration of two investment valuation approaches comprising Direct Capitalisation and Discounted Cash Flow. The results of the two approaches are reconciled and a market value established.
The primary approach is the Direct Capitalisation Approach as this most accurately reflects the investment strategy adopted by investors for the type of properties owned by the Group.
Key inputs to the Direct Capitalisation Approach are the assessment of market rent, its relationship to the contract rent, and the investment yield. The market rent is based on the analysis of rental agreements for similar properties adjusted for quality, size, location and lease terms.
The investment yield is derived from market sales of similar investment properties adjusted for property specific attributes in terms of age, tenant quality, residual lease term, investment scale and building quality.
The Discounted Cash Flow Approach requires an identical analysis to establish the market rent. Other key inputs comprise expected rental growth, potential vacancies, capital outlay, the terminal yield and the discount rate.
As with the Direct Capitalisation Approach market transactions are analysed to establish the discount rate. Rental growth is based upon market expectations including anticipated CPI growth.
The allowance for vacancies reflects anticipated market demand at lease expiry and the probability of lease renewal.
The fair value measurement for investment property of $34,385 has been categorised as Level 3 fair value based on the inputs to the valuation technique used.
During the year ended 31 March 2014, rent of $3,153,000 was recognised as being other income in the Statement of Comprehensive Income (2013: $2,276,000).
Canterbury Trust House Limited has a 50% participating interest in an investment property in Porirua. Under the joint arrangement, rental revenue and all expenses are shared equally between each party.
The Group’s share of the management fee for the property expensed in the Statement of Comprehensive Income is $17,000; (2013: $19,000)
12 Financial assets
| Group 2014 | Group 2013 | Trust 2014 | Trust 2013 | |
|---|---|---|---|---|
| Non-current investments | ||||
| Loans and receivables | 3,839 | 4,400 | 3,839 | 4,400 |
| Financial assets at fair value through profit or loss | 27,468 | 26,325 | 1,366 | 1,353 |
| 31,307 | 30,725 | 5,205 | 5,753 | |
| Current investments | ||||
| Loans and receivables | 961 | 726 | 961 | 726 |
| Financial assets at fair value through profit or loss | 439,978 | 425,590 | 439,978 | 425,590 |
| 440,939 | 426,316 | 440,939 | 426,316 |
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NZ Gazette 2014, No 84
✨ LLM interpretation of page content
💰
Financial Statements for Year Ended 31 March 2014
(continued from previous page)
💰 Finance & Revenue7 July 2014
Financial Statements, Revenue, Investment Fees, Other Income, Other Expenses, Donations, Property, Plant and Equipment, Depreciation