| 31.12.2021 | 31.12.2020 | |
|---|---|---|
| Net value at the beginning of the period | 2,724 | 3,315 |
| Expenditure on property improvement | 148 | 428 |
| Transfer to property, plant and equipment | (48) | (805) |
| Fair value adjustment as a result of valuation | (51) | (214) |
| Net value at the end of the period | 2,773 | 2,724 |
The investment properties recognised at the balance-sheet date are related mainly to the administration and office building owned by the Aluprof S.A. subsidiary, rented to third parties.
The Group revalues investment properties at the end of each reporting year.
The carrying amount of investment properties is based on fair values determined on the basis of the valuation conducted by a qualified independent expert (fair value hierarchy – 3). The approach applied by the expert was based on comparing market prices of rents in accordance with the income method and straight capitalisation of gross revenue technique.
| Data used for the valuation | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Usable area in m2 | 777 | 777 |
| Percentage of vacancies | 10% | 10% |
| Monthly rent per m2 | 38-42 | 38-42 |
| Annual rental revenue | 260 | 261 |
| Upkeep costs | 196 | 197 |
| Assumed capitalisation rate | 8% | 8.5% |
The standard property rental agreements are concluded for unlimited time and comprise a possibility of their termination by any of the parties with one-month notice period.
