HSBC 2009 Annual Report Download - page 443

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Investment properties
The composition of the investment properties at fair value in the year was as follows:
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 2009 ..................................................................... 566 188 217 971
Additions at cost ....................................................................... 36 – – 36
Fair value adjustments .............................................................. (58) 16 18 (24)
Disposals ................................................................................... – (25) – (25)
Exchange differences ................................................................ 57 5 – 62
Other changes ........................................................................... 39 – 2 41
At 31 December 2009 ............................................................... 640 184 237 1,061
Fair value
At 1 January 2008 ..................................................................... 925 205 216 1,346
Additions at cost ....................................................................... 78 – – 78
Fair value adjustments .............................................................. (93) 4 (3) (92)
Disposals ................................................................................... (2) – – (2)
Transfers ................................................................................... – – (1) (1)
Exchange differences ................................................................ (196) (15) 5 (206)
Other changes ........................................................................... (146) (6) – (152)
At 31 December 2008 ............................................................... 566 188 217 971
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 more than 35 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$81 million (2008: US$23 million; 2007:
US$42 million) earned by HSBC on its investment properties. Direct operating expenses of US$2 million (2008:
US$2 million; 2007: US$3 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 2009 amounted to nil (2008 and 2007: nil).
HSBC recognised no contractual obligations to purchase, construct, develop, maintain or enhance investment
properties (2008: nil).
HSBC Holdings had no investment properties at 31 December 2009 or 2008.
HSBC properties leased to customers
HSBC properties leased to customers included US$434 million at 31 December 2009 (2008: US$396 million) let
under operating leases, net of accumulated depreciation of US$18 million (2008: US$9 million). None was held by
HSBC Holdings.