Annual Report 2025 109 Independent Auditor’s Report TO UNITHOLDERS OF CAPITALAND ASCENDAS REIT (Constituted under a Trust Deed dated 9 October 2002 (as amended and restated) in the Republic of Singapore) Key Audit Matter How the matter was addressed in the audit Valuation of investment properties and investment properties under development (“Investment Properties”) The Group owns a portfolio of Investment Properties comprising business space and life sciences properties, industrial and data centres properties and logistics properties, located in Singapore, Australia, the United Kingdom / Europe and the United States of America. The Investment Properties represent the single largest category of assets, with a carrying amount of $18.6 billion as at 31 December 2025. The Group has adopted the fair value model under FRS 40 Investment Property which requires all the investment properties to be measured at fair value. The Group has engaged external independent valuers (“Valuers”) to perform the fair value assessment of the Investment Properties. The fair valuation of Investment Properties is considered to be a matter of significance as the valuation process requires the application of judgement in determining the appropriate valuation methodology to be used, and the use of subjective assumptions and various unobservable inputs. The fair valuations are sensitive to certain key assumptions applied in deriving the capitalisation rate, discount rate, terminal yield, price per square metre and gross development costs as a small change in these assumptions can result in an increase or decrease in fair valuation of the Investment Properties. The valuation methodology, their key assumptions and the inter-relationships between the assumptions and the valuation have been disclosed in Note 29(c) to the financial statements. We have assessed the Manager’s process of appointment and determination of the scope of work of the Valuers, as well as their process of reviewing, and accepting the Valuers’ investment property valuations. We have reviewed the qualifications, competence, independence, and the terms of engagement of the Valuers to determine whether there were any matters which might affect the objectivity of the Valuers or impede their scope of work. We held discussions with the Manager and the Valuers on the valuation reports issued by the Valuers, and engaged our valuation specialists to assist in our audit. Our audit procedures include: • assessing the valuation methodology, key assumptions and estimates used by the Valuers against general market practice for similar types of properties; and • assessing the reasonableness of the key valuation assumptions such as capitalisation rates, discount rates, terminal yields, price per square metre and gross development costs to historical rates, and available industry data for comparable markets and properties. Based on the audit procedures performed, the fair valuation of the Investment Properties and the various inputs used are within a reasonable range of our expectations. We have also assessed and validated the adequacy and appropriateness of the disclosures made in the financial statements.
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