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annual report 2012
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In prior year, the H-REIT Group acquired Studio M Hotel for a cash consideration of $154,000,000 from a related
corporation of the H-REIT Manager. The total acquisition costs of $2,083,000 included an acquisition fee payable
to H-REIT Manager of $1,540,000.
The carrying amounts of the investment properties located in Singapore, Australia and New Zealand as at
31 December 2012 were based on independent valuations undertaken by Jones Lang LaSalle Property
Consultants Pte Ltd for the Singapore investment properties, Jones Lang LaSalle Hotels (NSW) Pty Limited for
the Australia investment properties and Bayleys Valuations Limited for the New Zealand investment property.
The independent valuers have appropriate professional qualifcations and recent experience in the location and
category of the properties being valued. The valuations were based on the capitalisation and discounted cash
fow methods for the Singapore investment properties; the discounted cash fow approach for the Australian
investment properties; and capitalisation, discounted cashfow and rate per room methods for the New Zealand
investment property.
The specifc risks inherent in each of the properties are taken into consideration in arriving at the property
valuation. The valuation methods used in determining the fair value involve certain estimates including those
relating to capitalisation rate, discount rate and terminal yield.
The valuations adopted for the properties were as follows:
2012 2011
$’000 $’000
Properties
Orchard Hotel 454,000 450,000
Orchard Hotel Shopping Arcade 68,000 54,800
Grand Copthorne Waterfront Hotel 350,000 350,000
M Hotel 232,000 232,000
Copthorne King’s Hotel 124,400 129,000
Novotel Singapore Clarke Quay 304,000 296,000
Studio M Hotel 163,000 163,000
Rendezvous Grand Hotel Auckland 88,317 90,495
Mercure Brisbane and Ibis Brisbane 78,616 80,188
Novotel Brisbane 91,296 94,286
Ibis Perth 35,504 33,533
Mercure Perth 55,792 56,545
2,044,925 2,029,847
The net change in fair value of the investment properties has been recognised in the Statement of Total Return.
Investment properties are leased to external customers. The leases for Orchard Hotel, Grand Copthorne
Waterfront Hotel, M Hotel and Copthorne King’s Hotel contain an initial term of 20 years from 19 July 2006 with
an option to renew for a further 20 years. The lease for Studio M Hotel contains an initial term of 20 years from 3
May 2011 with an option to renew up to a total term of 70 years. The leases for Orchard Hotel Shopping Arcade
generally contain an initial term of one to three years. Subsequent renewals are renegotiated with the lessees.
The lease for Rendezvous Grand Hotel Auckland contains an initial term of 10 years from 7 September 2006
with an option to renew for a further 5 years. The lease for Novotel Singapore Clarke Quay contains a term of
approximately 13.5 years from 7 June 2007. The leases for the Australia investment properties contain a term
of approximately 11 years from 19 February 2010.
Portfolio Statements
As at 31 December 2012
The accompanying notes form an integral part of these fnancial statements.