Property ExposureProperty Exposure

Property Exposure

For prudential reporting purposes, a property exposure/investment exists where the investment (earnings and capital value) are dependent on the cash flows generated by the property through sale or rental income. Investments in property denominated in a currency other than Australian currency must also be reported on this form.

Property exposure that is to be reported on this form, only relates to exposure to direct holdings of property (direct investment/ownership in freehold or leasehold real estate).

Following property exposures are not to be to be reported on this form, but in GRF 140.4 Investments – Indirectly Held by the Insurer and Risk Charge:

• Holding in listed property trusts

Indirect ownership of physical real estate. Units are listed and traded on the primary board of a recognised stock exchange.

• Holding in unlisted property trusts

Indirect ownership of physical real estate. Units are not listed and traded on the primary board of a recognised stock exchange.

Property Classifications

For this return the insurer’s exposure/investment in direct property, is to be classified according to the following type of property market/categories:

1. Office;
2. Retail – e.g. includes retail shops, restaurants, shopping centres;
3. Tourism and leisure – e.g. includes hotels, motels and lodgings, recreational and sporting facilities, hotel developments, time-share developments and other hospitality industries;
4. Infrastructure; and
5. Other

Fair Value

Fair value must be used for the measurement of the carrying value of the direct property investments/holdings.

Investment Capital Factor %

This column discloses the appropriate investment capital charge for the asset type in accordance with GPS 114.

Investment risk charge

This column will automatically calculate the appropriate investment risk charge in accordance with GPS 114.

Total direct property investments

This is automatically calculated by the form and represents the sum of fair value of all property investments of the insurer.

1. Total direct property investments, which represent the following:

1.1 Current Assets

Disclose that component of the total direct property investments of the insurer that are classified as current assets for Australian financial reporting purposes. Disclosure of investments in GRF 300.0 Statement of Financial Position into current assets is to be disclosed/reported in accordance with AASB 101 ‘Presentation of Financial Statements’.

1.2 Non-Current Assets

Disclose that component of the total direct property investments of the insurer that are classified as non-current assets for Australian financial reporting purposes. Disclosure of investments in GRF 300.0 Statement of Financial Position into non-current assets is to be disclosed/reported in accordance with AASB 101 ‘Presentation of Financial Statements’.

The total of item 1.1 and 1.2 must equal ‘Total direct property investments’ reported above.