HSBC 2008 Annual Report Download - page 417

415
Freehold
land and
buildings
Long
leasehold
land and
buildings
Short
leasehold
land and
buildings Total
US$m US$m US$m US$m
Fair value
At 1 January 2007 .......................................................... 1,533 174 242 1,949
Acquisition of subsidiaries ............................................ 93 – – 93
Additions at cost ............................................................ 287 – – 287
Fair value adjustments ................................................... 25 21 106 152
Disposals ........................................................................ (3) – – (3)
Reclassified as held for sale .......................................... (61) (5) (48) (114)
Transfers ........................................................................ – (2) 4 2
Exchange differences ..................................................... 27 1 (1) 27
Other changes1 ............................................................... (976) 16 (87) (1,047)
At 31 December 2007 .................................................... 925 205 216 1,346
1 Mainly relating to investment properties of subsidiaries no longer qualifying for consolidation, because HSBC does not have the
majority of the risks and rewards of ownership.
Investment properties are valued on an open market value basis as at 31 December each year by independent
professional valuers who have recent experience in the location and type of properties. Investment properties in
Hong Kong, the Macau Special Administrative Region and mainland China, which represent 25 per cent by value
of HSBC’s investment properties subject to revaluation, were valued by an independent valuer who is a member of
the Hong Kong Institute of Surveyors and who has recent experience in the locations and categories of the investment
properties.
Included within ‘Other operating income’ was rental income of US$23 million (2007: US$42 million; 2006:
US$153 million) earned by HSBC on its investment properties. Direct operating expenses of US$2 million (2007:
US$3 million; 2006: US$61 million) incurred in respect of the investment properties during the year were recognised
in ‘General and administrative expenses’. Direct operating expenses arising in respect of investment properties that
did not generate rental income during 2008 amounted to nil (2007 and 2006: nil).
HSBC recognised no contractual obligations to purchase, construct, develop, maintain or enhance investment
properties (2007: US$22 million).
HSBC Holdings had no investment properties at 31 December 2008 or 2007.
HSBC properties leased to customers
HSBC properties leased to customers included US$396 million at 31 December 2008 (2007: US$387 million) let
under operating leases, net of accumulated depreciation of US$9 million (2007: US$18 million). None was held by
HSBC Holdings.