NOTES TO THE FINANCIAL STATEMENTS
21 Equity issue costs
The equity issue costs of $259,000 (2013: $251,000) incurred in relation to the distribution reinvestment plan are
deducted directly against Unitholders’ funds.
22 Determination of fair values of investment properties and investment properties under development
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both
financial and non-financial assets and liabilities. Fair values have been determined for measurement and/
or disclosure purposes based on the following methods. When applicable, further information about the
assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
Investment properties
Investment properties are stated at fair value based on valuations as at 31 December 2014 performed by
independent professional valuers, having appropriate recognised professional qualification and experience
in the location and category of property being valued. Independent valuations are obtained twice a year for
all investment properties, being 30 June and 31 December. Any change in the fair value is recorded in the
Statement of Total Return.
In determining the fair value, the valuers have used valuation methods which involve certain estimates. The
Manager has exercised its judgment and is satisfied that the valuation methods and estimates are reflective of
the current market conditions.
The independent professional valuers have considered valuation techniques including direct comparison
method, capitalisation approach and/or discounted cash flow analysis in arriving at the open market value as
at the reporting date. The key assumptions used to determine the fair value of investment properties include
market-corroborated capitalisation yield, terminal yield, discount rate and average growth rate.
The direct comparison method involves the analysis of comparable sales of similar properties and adjusting the
sale prices to that reflective of the investment properties. The capitalisation approach capitalises an income
stream into a present value using revenue multipliers or single-year capitalisation rates. The discounted cash
flows method involves the estimation and projection of an income stream over a period and discounting the
income stream with an expected internal rate of return.
Investment properties under development
Investment properties under development are stated at fair value based on the valuation performed by an
independent professional valuer. Independent valuations are obtained twice a year for all investment properties
including investment properties under development, being 30 June and 31 December. Any change in the fair
value is recorded in the Statement of Total Return.
In determining the fair value, the valuer has considered valuation techniques including, capitalisation approach
and/or discounted cash flow analysis in arriving at the open market value as at the reporting date. The key
assumptions used to determine the fair value of investment properties under development include estimated
costs of development, market-corroborated capitalisation yield, terminal yield, discount rate and average
growth rate.
The capitalisation approach capitalises an income stream into a present value using revenue multipliers or
single-year capitalisation rates. The discounted cash flows method involves the estimation and projection of
an income stream over a period and discounting the income stream with an expected internal rate of return.
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