Annual Report 2012 - Development Securities PLC

Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the 14-month period ended 29th February 2012
10 Investment properties continued
Reconciliation of market value of investment properties to the net book amount
The following table reconciles the market value of investment properties to their net book amount. The components of the reconciliation are included within
their relevant balance sheet heading.
84 Development Securities PLC / Annual Report 2012
29th February
2012
£’000
31st December
2010
£’000
Market value as assessed by the independent valuers or Directors 242,539 202,118
Amount included in prepayments and accrued income in respect of lease incentives (4,640) (2,881)
Net book amount of Investment property 237,899 199,237
The Group’s Investment properties have been valued at 29th February 2012 and at 31st December 2010 by independent valuers and by the Directors on
the basis of market value in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. Completed Investment
properties have been valued by DTZ Debenham Tie Leung, Chartered Surveyors, Savills Commercial Limited, Chartered Surveyors or Ryden LLP,
Commercial Property Consultants at a value of £208,509,000 (31st December 2010: £168,399,000).
Land held as investment property has been valued by Colliers CRE, Chartered Surveyors at £14,000,000 (31st December 2010: £12,400,000).
The valuers have consented to the use of their names in the financial statements.
Also included within Investment properties are freehold land and buildings representing investment properties under development, amounting to
£15,390,000 (31st December 2010: £18,438,000), which have been valued by the Directors. These properties comprise buildings and landholdings for
current or future development as investment properties. This approach has been taken because the value of these properties is dependent on a detailed
knowledge of the planning status, the competitive position of these assets and a range of complex project development appraisals.
Investment properties under development include £7,590,000 (31st December 2010: £7,104,000) of landholdings adjacent to retail properties within the
Group’s portfolio, acquired for the purpose of extending the existing shopping centres. The fair value of these properties rests in the planned extensions, and
is difficult to estimate pending confirmation of designs and planning permission, and hence has been estimated by the Directors at cost as an approximation
to fair value.
£215,329,000 (31st December 2010: £145,425,000) of Investment properties are charged as security against the Group’s borrowings.
11 Operating properties – serviced offices
Long leasehold
£’000
At valuation 1st January 2010 2,020
Deficit on revaluation (310)
At valuation 31st December 2010 1,710
Deficit on revaluation (213)
At valuation 29th February 2012 1,497
Accumulated depreciation
At 1st January 2010 440
Charge for the year 80
At 31st December 2010 520
Charge for the period 77
At 29th February 2012 597
Net book amount 29th February 2012 900
Net book amount 31st December 2010 1,190
Net book amount 1st January 2010 1,580
Original cost of operating properties at 29th February 2012 1,583
Original cost of operating properties at 31st December 2010 1,583
The operating property is charged as security against the Group’s borrowings.
Depreciation expense of £77,000 (31st December 2010: £80,000) is included within operating costs.
The deficit on revaluation of long leasehold properties for the period ended 29th February 2012 is £213,000 (31st December 2010: £310,000 deficit).
£127,000 has been debited to the Property revaluation reserve and the balance of £86,000 has been charged to the Statement of Comprehensive Income.
If the Operating properties were measured using the cost model, the carrying value would be £986,000 (31st December 2010: £1,063,000).
The Group’s Operating property has been valued at market value as at 29th February 2012 by independent professional valuers DTZ Debenham Tie Leung,
Chartered Surveyors, on the basis of Existing Use Value in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered
Surveyors and without any special assumptions. The values disclosed above are as stated by the valuer in its valuation report to the Directors. The valuer has
consented to the use of its name in the financial statements.