78 / 100
1 7 P r o p e r t y , p l a n t a n d e q u i p m e n t ( c on t i n u e d )
Valuation of farm and owner occupied properties
Telfer Young (Waikato) Limited and Curnow Tizard were contracted as independent valuers to value farm and owner occupied
properties. Fair value has been assessed as the amount for which an asset could be exchanged or a liability settled between
knowledgeable willing parties in an arms length transaction.
The significant methods and assumptions applied in estimating the fair value were:
• the direct comparison approach (based on analysis of sales of vacant property. This analysis includes determination of land
value, other improvements and residual value for principal improvements);
• the traditional capitalisation approach (focusing on the net maintainable income and the level of investment return);
• the discounted cash flow approach (based on establishing a cash flow budget for the property having particular regard to
the length of lease term and nature of the leasehold interest and the following factors; discount rate, land inflation and
rental rates); and
• comparing market evidence of transaction prices for similar properties.
The total value of farm properties valued by Telfer Young (Waikato) Limited at 31 March 2015 is $25.4m (2014: $22.4m). The
carrying amount that would have been reported for farm properties under the historical cost method is $9.3m (2014: $9.3m). The
total value of owner occupied properties valued by Curnow Tizard Limited at 31 March 2015 is $6.6m (2014: $6.4m). The carrying
amount that would have been reported for other properties under the historical cost method is $4.5m (2014: $4.5m).
All valuers are independent registered valuers not related to the Group. All valuers hold recognised and relevant professional
qualifications and have recent experience in the locations and categories of farm owner occupied properties they have valued.
Tribal properties
Tribal properties comprise of land and buildings located at Hopuhopu, reserve lands and a residential property located at Pukawa.
These properties are recorded at cost less accumulated depreciation.
Land and buildings (Hotels) pledged as security
Westpac New Zealand and the Bank of New Zealand have security agreements over the assets owned by the Novotel Auckland
Airport hotel and the Hamilton Riverview Hotel Limited respectively, refer to note 22.
1 8 I n v e s t m e n t p r o p e r t i e s
Consolidated
Notes
2015
$’000
2014
$’000
Balance at beginning of year
564,914
545,288
Development
13,078
11,709
Net gain from fair value adjustment
5
8,007
12,706
Transfer to property, plant and equipment
17
(2,400)
(1,675)
Disposals
(1,773)
(3,114)
Balance at end of year
581,826
564,914
Valuation of investment properties
The significant methods and assumptions applied in estimating the fair value were:
• the direct comparison approach (based on analysis of sales of vacant property. This analysis includes determination of land
value, other improvements and residual value for principal improvements);
waikato raupatu lands trust
notes to the financial statements
f o r t h e y e a r e n d e d 3 1 m a r c h 2 0 1 5
76