Entire Section

  • Valuation report requirements

    • 5.05

      Basic contents

      All valuation reports must contain all material details of the basis of valuation which must follow The Hong Kong Institute of Surveyors ("HKIS") Valuation Standards on Properties published from time to time by the HKIS or the International Valuation Standards published from time to time by the International Valuation Standards Council.

    • 5.06

      All valuation reports should normally contain the following information:—

      (1) a description of each property including:—
      (a) an address sufficient to identify the property, which should generally include postal address, lot number and such further designation as is registered with the appropriate government authorities in the jurisdiction in which the property is located;
      (b) a brief description (e.g. whether land or building, approximate area, etc.);
      (c) the existing use (e.g. shops, offices, factories, residential, etc.);
      (d) the Ground/Government Rent;
      (e) a summary of the terms of tenants' leases or underleases (including repairing obligations, where material);
      (f) the approximate age of buildings;
      (g) the terms of tenure;
      (h) the terms of any intra-group lease granted by a parent company to a subsidiary on property occupied by the group (identifying the properties);
      (i) the capital value in existing state at the effective date as at which the property was valued;
      (j) the current planning or zoning use;
      (k) the options or rights of pre-emption concerning or affecting the property;
      (l) the basis of and approach to valuation for the property interest;
      (m) when the site was last inspected;
      (n) summary of investigation carried out, including details of inspection, such as building conditions, availability of building services, etc.;
      (o) nature and source of information relied on;
      (p) details of title and ownership;
      (q) details of encumbrances;
      (r) how the properties are grouped together for each valuation certificate;
      (s) names and qualifications of persons who carried out the site inspection; and
      (t) any other matters which may materially affect the value;
      (2) where the property is not in the process of being developed, details of rentals of the property including:—
      (a) the existing monthly rental before profits tax if the property is wholly or partly let together with the amount and a description of any outgoings or disbursements from the rent, and, if materially different, the estimated current monthly market rental obtainable, on the basis that the property was available to let on the effective date as at which the property was valued;
      (b) a summary of any rent review provisions, where material; and
      (c) the amount of vacant space, where material;
      (3) where the property is in the process of being developed the following additional details, where available:—
      (a) details of development potential and whether architectural plans have been approved or planning consent has been obtained and any conditions imposed in respect of such approval;
      (b) any material restrictions on development including building covenants and time limits for completion of the development;
      (c) existing stage of development;
      (d) estimated completion date;
      (e) estimated cost of carrying out the development or (where part of the development has al been carried out) the estimated cost of completing the development;
      (f) estimated capital value in existing state at the effective date as at which the property was valued;
      (g) estimated capital value after completion;
      (h) any material special or general conditions affecting the development of the property;
      (i) any conditions imposed as to construction of roadways, pathways, drainage, sewage and other facilities or services for public use, if material;
      (j) any sales arrangements and/or letting arrangements existing at the effective date as at which the property was valued; and
      (k) any construction costs incurred up to the effective date as at which the property was valued;
      (4) where property is held for future development purposes the following additional details, where available:—
      (a) details of development potential and whether architectural plans have been approved or planning consent has been obtained and any conditions imposed in respect of such approval;
      (b) any material special or general conditions affecting the development of the property including building covenants and time limits for completion of the development; and
      (c) any conditions imposed as to construction of roadways, pathways, drainage, sewage and other facilities or services for public use, if material;
      (5) a classification of the property according to the purpose for which it is held. The acceptable categories are:—
      (a) property held for development;
      (b) property held for investment;
      (c) property held for owner occupation; and
      (d) property held for sale;
      (6) details of any agreement or proposals as to any proposed transaction regarding the property between the issuer and any other member of the group;
      (7) the name of the valuer, his address and professional qualification;
      (8) the effective date as at which the property was valued and the date of the valuation; and
      (9) such other information as the Exchange may require.

      Note: See Practice Note 12

    • 5.07

      Effective Date

      The effective date as at which the property was valued must not be more than three months before the date on which the relative listing document or circular is issued and if such effective date is not the same as the end of the last period reported on by the reporting accountants (see Chapter 4), it will be necessary for the listing document or circular to include a statement reconciling the valuation figure with the figure included in the balance sheet as at the end of that period.

    • 5.08

      Independence of Valuer

      Unless dispensation is obtained from the Exchange, all valuations of properties must be prepared by an independent qualified valuer and for this purpose:—

      (1) a valuer is not independent if:—
      (a) he is an officer or servant or proposed director of the issuer or the issuer's subsidiary or holding company or of a subsidiary of the issuer's holding company or any associated company; or
      (b) in the case of a firm or company of valuers, it is the issuer's subsidiary or holding company or a subsidiary of the issuer's holding company or any of its partners, directors or officers is an officer or servant or proposed director of the issuer or the issuer's subsidiary or holding company or of a subsidiary of the issuer's holding company or any associated company; and
      (2) a valuer is a qualified valuer only if:—
      (a) for the purposes of valuation of properties situated in Hong Kong, the valuer is a fellow or associate member of The Royal Institution of Chartered Surveyors (Hong Kong Branch) or The Hong Kong Institute of Surveyors and carries on the business in Hong Kong of valuing properties and is authorised to do so by the rules of the relevant professional institution of which he is a member; or
      (b) for the purposes of valuation of properties situated outside Hong Kong, the valuer has the appropriate professional qualifications and experience of valuing properties in the same location and category to carry out the valuation.

    • 5.09

      Other Reports

      If the issuer has obtained more than one valuation report regarding any of the issuer's properties referred to in the listing document or circular within three months before the issue of the listing document or circular then all other such reports must be included.