XML 67 R11.htm IDEA: XBRL DOCUMENT v3.24.0.1
INVESTMENT PROPERTIES
 12 Months Ended
Dec. 31, 2023
Disclosure of detailed information about investment property [abstract]  
INVESTMENT PROPERTIES
4.
INVESTMENT PROPERTIES

As at December 31,
20232022
Income-producing properties$8,641,352 $8,486,105 
Properties under development120,940 272,504 
Land held for development45,847 80,962 
$8,808,139 $8,839,571 

Changes in investment properties are shown in the following table:

Years ended December 31,
20232022
Income-producing propertiesProperties under developmentLand held for developmentIncome-producing propertiesProperties
 under development		Land held for development
Balance, beginning of year
$8,486,105 $272,504 $80,962 $7,727,368 $162,817 $80,973 
Maintenance or improvements8,409 — — 9,680 — — 
Leasing costs5,095 1,577 — 10,153 — — 
Tenant allowances6,969 47 — 574 — — 
Developments or expansions36,633 61,089 1,530 43,940 228,099 2,853 
Acquisitions (note 3)
107,125 — — 471,112 14,603 6,578 
Transfer to properties under development— 50,007 (50,007)— 17,549 (17,549)
Transfer to income-producing properties288,979 (288,979)— 223,040 (223,040)— 
Amortization of straight-line rent16,690 — — 10,591 — — 
Amortization of tenant allowances(4,403)— — (4,149)— — 
Other changes132 4 6 374 21 14 
Fair value (losses) gains, net
(216,191)26,506 13,382 (285,127)56,536 6,929 
Foreign currency translation, net(94,191)(1,815)(26)321,078 15,919 1,164 
Classified as assets held for sale (note 5)
— — — (42,529)— — 
Balance, end of year
$8,641,352 $120,940 $45,847 $8,486,105 $272,504 $80,962 

The Trust determines the fair value of an income-producing property based upon, among other things, rental income from current leases and assumptions about rental income from future leases reflecting market conditions and lease renewals at the applicable balance sheet dates, less future cash outflows in respect of such leases. Fair values were primarily determined by using a 10-year cash flow and subsequent reversionary value discounted back to present value. The fair values of properties under development are measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. The valuation metrics utilized to derive the Trust’s investment property valuations are determined by management. The Trust does not value its investment properties based on models prepared by external appraisers but uses such external appraisals as data points, alongside other external market information for management to arrive at its own conclusions on values. Management receives valuation assumptions from external appraisers such as discount rates, terminal capitalization rates and market rental rates, however, the Trust also considers its knowledge of historical renewal experiences with its tenants, its understanding of certain specialized aspects of the Trust’s portfolio and tenant profile, and its knowledge of the current condition of the properties to determine proprietary market leasing assumptions, including lease renewal probabilities,
renewal rents and capital expenditures. There has been no change in the valuation methodology during the year.
Included in investment properties as at December 31, 2023 is $64.0 million (2022 — $48.6 million) of net straight-line rent receivables arising from the recognition of rental revenue on a straight-line basis over the lease term.

Details about contractual obligations to purchase, construct and develop properties can be found in the commitments and contingencies note (note 22).
Tenant minimum rental commitments payable to Granite on non-cancellable operating leases as at December 31, 2023 are as follows:

2024
$444,183 
2025
431,349 
2026
394,975 
2027
369,278 
2028
327,445 
2029 and thereafter
1,365,460 
$3,332,690 
Valuations are most sensitive to changes in discount rates and terminal capitalization rates. The key valuation metrics for income-producing properties by country are set out below:

As at December 31,
2023
2022(1)
Weighted
average(2)
MaximumMinimum
Weighted
average(2)
MaximumMinimum
Canada
Discount rate6.55 %7.50 %6.00 %6.26 %7.25 %5.25 %
Terminal capitalization rate5.39 %6.50 %4.75 %5.19 %6.50 %4.25 %
United States
Discount rate7.08 %10.50 %6.15 %6.45 %10.25 %5.50 %
Terminal capitalization rate6.02 %9.25 %5.25 %5.57 %9.25 %4.75 %
Germany
Discount rate7.13 %9.65 %5.80 %6.48 %11.00 %4.90 %
Terminal capitalization rate6.13 %8.90 %4.85 %5.50 %10.00 %4.30 %
Austria
Discount rate8.68 %9.90 %8.15 %8.59 %9.90 %8.15 %
Terminal capitalization rate7.40 %8.25 %6.75 %7.32 %7.90 %6.75 %
Netherlands
Discount rate6.34 %7.75 %5.60 %5.43 %6.85 %4.75 %
Terminal capitalization rate6.57 %9.00 %5.95 %5.73 %8.50 %5.00 %
Total
Discount rate7.05 %10.50 %5.60 %6.50 %11.00 %4.75 %
Terminal capitalization rate6.07 %9.25 %4.75 %5.66 %10.00 %4.25 %
(1)Excludes assets held for sale (note 5).
(2)Weighted based on income-producing property fair value.
The table below summarizes the sensitivity of the fair value of income-producing properties to changes in either the discount rate or terminal capitalization rate:
Discount Rate
Terminal Capitalization Rate
Rate sensitivity
Fair value
Change in fair value
Fair value
Change in fair value
+50 basis points$8,322,286 $(319,066)$8,235,864 $(405,488)
+25 basis points8,479,932 (161,420)8,430,247 (211,105)
Base rate
8,641,352 — 8,641,352 — 
-25 basis points8,806,676 165,324 8,871,520 230,168 
-50 basis points$8,975,983 $334,631 $9,123,497 $482,145