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• 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.
Investment property valuations were completed as follows:
D.J. Saunders from Telfer Young (Waikato) Limited valued properties at fair value of $68m on 31 March 2015 (31 March 2014:
$72m) using a mixture of market evidence of transaction prices for similar properties, direct comparison, capitalisation and
discounted cash flow approaches.
T. Arnott from CB Richard Ellis Limited valued properties at fair value of $311m on 31 March 2015 (31 March 2014: $298m) using
a mixture of market evidence of transaction prices for similar properties, capitalisation and discounted cash flow approaches.
K Sweetman from Colliers International NZ Limited valued properties at fair value of $90m on 31 March 2015 (31 March 2014:
$80m) using a mixture of market evidence of transaction prices for similar properties, direct comparison, capitalisation and
discounted cash flows approaches.
P.A Curnow from Curnow Tizard Limited valued properties at fair value of $113m on 31 March 2015 (31 March 2014: $112m)
using a mixture of market evidence of transaction prices for similar properties, direct comparison, capitalisation and discounted
cash flow approaches.
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 the investment property they have valued.
The Group has no work in progress as at 31 March 2015 (2014: $3m in relation to property located at The Base).
1 9 T e Wh e r owh e r o t i t l e p r o p e r t i e s
Consolidated
Notes
2015
$’000
2014
$’000
Investment Property
Balance at beginning of the year
48,367
38,546
Net gain from fair value adjustments
5
1,808
9,821
50,175
48,367
Other land
At cost
1,716
1,716
Closing balance
51,891
50,083
Valuation of Te Wherowhero title properties
Te Wherowhero title properties comprise of properties located at Kawhia, Onewhero, 192 The Terrace in Wellington, Hopuhopu,
The Base and the University of Waikato, Hamilton. Te Wherowhero investment properties are held at fair value amounting to
$50m (2014: $48m), valuations were completed as follows:
• 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
77
waikato-tainui
annual report 2015