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Inventories

12 Months Ended

Dec. 31, 2019

14	INVENTORIES

At December 31, this account comprises:


	2018			2019
Land		230,689			183,218
Work in progress - Real estate		135,376			158,010
Finished properties		76,027			86,190
Construction materials		27,852			59,879
Merchandise and supplies		53,310			74,959

		523,254			562,256
Impairment of inventories		(9,207	)		(9,683	)

		514,047			552,573

Land

Land comprises properties, net of impairment and includes properties for the development of the following projects of the subsidiary GyM Viva S.A. As of December 31, 2019, the land impairment provision equals S/5.2 million (S/9.2 million in 2018):


	2018		2019
Lurin (a)		72,080		71,902
San Isidro (b)		49,664		51,285
San Miguel (c)		28,811		—
Nuevo Chimbote (d)		17,262		17,457
Barranco (e)		13,585		14,202
Huancayo (f)		8,282		—
Piura		8,105		11,805
Carabayllo III		14,941		16,567
Others (g)		8,752		—

		221,482		183,218

(a)	Plot of land of 107 hectares that corresponds to Inmobiliaria Almonte S.A.C. and a land 210 hectares that corresponds to Inmobiliaria Almonte 2 S.A.C.; both lands located in the district of Lurin, province of Lima, destined for the purposes of industrial development and public housing.

(b)	Land located on David Samanez Ocampo street N° 140 in San Isidro district where a 15 -story building with 24 apartments and 124 parking lots will be built.

(c)	Regarding the Parques del Mar project located in San Miguel, a traditional multi-family housing condominium with 248 apartments and 185 parking lots is developed. In December 2019, the construction of the condominium began, which is why it is shown in products in process.

(d)	Land located in Chimbote of 11.5 hectares for the development of a real estate social housing project.

(e)	Land located in Paul Harris St. N°332 and N°336 in Barranco district, for the development of a residential building project.

(f)	With respect to the project located in the province of Huancayo, in December 2019, the deliveries of land from the second stage began; That is why the stock of them is shown in finished products.

(g)	With respect to others, it includes the Strip project that delivered commercial premises and was transferred from land to finished products for S/22.9 million, as of December 2019 there is a stock in finished products of S/6.3 million.

Land properties correspond to assets maintained since 2015, for which construction has not yet begun.

The

ncrease in costs of the year is mainly due to engineering, license paperwork, and other smaller costs. Construction in these land properties is expected to begin in the second half of 2020.

Real estate - work in progress

At December 31, real state work in progress comprises the following projects:


	2018		2019
Los Parques de Comas		69,743		77,757
Los Parques del Callao		46,697		35,549
Los Parques del Mar		—		32,183
Los Parques de Piura		11,066		5,658
Inmobiliaria Pezet 417 S.A.C.		3,563		4,091
Others		4,307		2,772

		135,376		158,010

During 2019 the Group has capitalized financing costs of these construction projects (Note 2.19) amounting to S/3.7 million at annual interest rates between 7% and 12% (S/7.9 million in 2018 at interest rates between 7% and 12%).

Finished properties

At December 31, the balance of finished properties consists of the following investment properties:


	2018		2019
Los Parques de Comas		18,785		37,605
Huancayo		15,546		19,672
Los Parques de Callao		389		10,914
Klimt		5,911		5,978
El Rancho		19,314		2,347
Los Parques de San Martĺn de Porres		4,029		903
Rivera Navarrete		4,053		131
Los Parques de Carabayllo		942		168
Los Parques de Villa El Salvador II		4,277		117
Others		2,781		3,900

		76,027		81,735

As of December 31, 2019, the balance of finished properties is net of an impairment of S/4.5 million.

Construction materials

As of December 31, 2019, the construction materials correspond mainly to projects of the subsidiary GyM S.A. for S/57.4 million (GyM S.A. for S/27.8 million as of December 31, 2018).