Valuation of investment property
The investment property balance in the
consolidated financial statements of the
Group as at 31 December
2023 is EUR 2.273,4 million. In Note 17 of
the consolidated financial statements the
Group presented the disclosures related to
investment properties, including the key
assumptions adopted to measure the
investment properties at their fair value.
The Group has a portfolio of investment
properties comprising land, completed
properties in the office and retail sectors, as
well as investment properties under
construction.
At least once a year, as at the end of each
financial year, investment properties are
measured at fair value determined with the
support of valuation experts, including
independent appraisers. To determine the fair
value of properties, independent appraisers
apply various approaches, methodologies
and measurement techniques depending on
the type of the property assessed.
The fair value measurement of investment
properties is affected by the inherent risk of
uncertainty of the estimations made for the
purpose of their valuation, and is sensitive to
the underlying assumptions. The value of the
investment properties depends on the
adopted valuation method and assumptions,
such as the discount rate and capitalization
rate, expected rental income and various
multipliers which are based on the subjective
Our audit procedures comprised in particular:
a) gaining an understanding and assessing the
process of valuation and controlling the
valuation of investment properties andassessing the
qualifications, scope and conditions of the work and
the objectivity of
the independent appraisers;
b) assessing compliance of the adopted accounting
policies in respect of investment
properties with the appropriate financial reporting
standards;
c) reconciling – on a selected sample – the
value of investment properties presented in
the consolidated financial statements with
the valuation reports prepared by independent
appraisers;
d) for a selected sample – verification of the
mathematical accuracy and methodological
consistency (with support of internal PwC valuation
experts) of property valuations made by an
independent appraisers;
e) performing a critical assessment of the
assumptions adopted and estimations made
by the Group to determine the fair value, in
particular, checking – on a selected sample –
the following elements of the valuation procedures:
• the adopted approach, valuation methodology and
techniques which depend on the type of the
property assessed;
• in case of properties which generate revenue,