XML 58 R46.htm IDEA: XBRL DOCUMENT
v3.22.4

INVESTMENT PROPERTIES (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2022
Investment property [abstract] |
Schedule of roll forward of investment property balances | The following table presents a roll forward of investment property balances for the years ended December 31, 2022 and 2021:
| Year ended Dec. 31, 2022 | Year ended Dec. 31, 2021
(US$ Millions) | Commercial properties | Commercial developments | Total | Commercial properties | Commercial developments | Total
Balance, beginning of year | $ | 62,313 |  | $ | 2,300 |  | $ | 64,613 |  | $ | 70,294 |  | $ | 2,316 |  | $ | 72,610 |
Changes resulting from: |  |  |  |  |  |
Property acquisitions | 760 |  | — |  | 760 |  | 491 |  | 80 |  | 571 |
Capital expenditures | 870 |  | 428 |  | 1,298 |  | 796 |  | 758 |  | 1,554 |
Property dispositions(1) | (307) |  | (1) |  | (308) |  | (1,299) |  | (351) |  | (1,650) |
Fair value (losses) gains, net | (1,122) |  | 64 |  | (1,058) |  | 1,791 |  | 171 |  | 1,962 |
Foreign currency translation | (1,528) |  | (149) |  | (1,677) |  | (558) |  | (37) |  | (595) |
Transfers between commercial properties and commercial developments | 387 |  | (387) |  | — |  | 635 |  | (635) |  | — |
Impact of deconsolidation due to loss of control(2) | (575) |  | — |  | (575) |  | — |  | — |  | — |
Manager Reorganization(3) | 6,321 |  | 758 |  | 7,079 |  | — |  | — |  | — |
Reclassifications of assets held for sale and other changes | (1,052) |  | (495) |  | (1,547) |  | (9,837) |  | (2) |  | (9,839) |
Balance, end of year(4) | $ | 66,067 |  | $ | 2,518 |  | $ | 68,585 |  | $ | 62,313 |  | $ | 2,300 |  | $ | 64,613 |
(1)Property dispositions represent the carrying value on date of sale. (2)The partnership deconsolidated its investment in a subsidiary as a result of the dilution of its interest. Prior to the transaction, the partnership's interest was consolidated and is now reflected as a financial asset. (3)See Note 32, Related Parties for further information on the Manager Reorganization. (4)Includes right-of-use commercial properties and commercial developments of $1,045 million and $127 million, respectively, as of December 31, 2022 (2021 - $557 million and $24 million, respectively). Current lease liabilities of $122 million (2021 - $118 million) has been included in accounts payable and other liabilities and non-current lease liabilities of $810 million (2021 - $558 million) have been included in other non-current liabilities.
Schedule of key valuation metrics for investment properties | The key valuation metrics for the partnership’s consolidated commercial properties are set forth in the following tables below on a weighted-average basis:
|  | Dec. 31, 2022 | Dec. 31, 2021
Consolidated properties | Primary valuation method | Discount rate | Terminal capitalization rate | Investment horizon (yrs.) | Discount rate | Terminal capitalization rate | Investment horizon (yrs.)
Core Office | Discounted cash flow | 6.8 | % | 5.4 | % | 11 | 6.5 | % | 5.3 | % | 11
Core Retail | Discounted cash flow | 7.2 | % | 5.3 | % | 10 | 7.0 | % | 5.3 | % | 10
LP Investment(1) | Discounted cash flow | 9.1 | % | 6.3 | % | 8 | 9.4 | % | 7.0 | % | 8
(1) The valuation method used to value multifamily and manufactured housing properties is the direct capitalization method. At December 31, 2022, the overall implied capitalization rate used for properties using the direct capitalization method was 4.3% (December 31, 2021 - 4.3%). The following table presents the valuation techniques and inputs of the partnership’s Level 2 assets and liabilities:
Type of asset/liability |  | Valuation technique
Foreign currency forward contracts |  | Discounted cash flow model - forward exchange rates (from observable forward exchange rates at the end of the reporting period) and discounted at a credit adjusted rate
Interest rate contracts |  | Discounted cash flow model - forward interest rates (from observable yield curves) and applicable credit spreads discounted at a credit adjusted rate
The table below presents the valuation techniques and inputs of Level 3 assets:
Type of asset/liability |  | Valuation techniques |  | Significant unobservable input(s) |  | Relationship of unobservable input(s) to fair value
Securities - FVTPL/FVTOCI |  | Net asset valuation |  | (a) Forward exchange rates (from observable forward exchange rates at the end of the reporting period) (b) Discount rate |  | (a) Increases (decreases) in the forward exchange rate would increase (decrease) fair value (b) Decreases (increases) in the discount rate would increase (decrease) fair value
Schedule of investment properties measured at fair value | The following table presents the partnership’s investment properties measured at fair value in the consolidated financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined above in Note 2(i), Summary of Significant Accounting Policies, Fair value measurement.
| Dec. 31, 2022 | Dec. 31, 2021
|  |  | Level 3 |  |  | Level 3
(US$ Millions) | Level 1 | Level 2 | Commercial properties | Commercial developments | Level 1 | Level 2 | Commercial properties | Commercial developments
Core Office | $ | — |  | $ | — |  | $ | 22,129 |  | $ | 1,355 |  | $ | — |  | $ | — |  | $ | 24,644 |  | $ | 1,023 |
Core Retail | — |  | — |  | 19,438 |  | 106 |  | — |  | — |  | 18,991 |  | — |
LP Investments | — |  | — |  | 24,500 |  | 1,057 |  | — |  | — |  | 18,678 |  | 1,277 |
Total | $ | — |  | $ | — |  | $ | 66,067 |  | $ | 2,518 |  | $ | — |  | $ | — |  | $ | 62,313 |  | $ | 2,300 |
(1)Represents excess land held for capital appreciation rather than an operating hotel asset. The following table outlines financial assets and liabilities measured at fair value in the financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined above:
| Dec. 31, 2022 | Dec. 31, 2021
(US$ Millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total
Financial assets |  |  |  |  |  |  |  |
Securities designated as FVTPL | 10 |  | 305 |  | 2,208 |  | 2,523 |  | 17 |  | 218 |  | 1,965 |  | 2,200 |
Securities designated as FVTOCI | 36 |  | — |  | 69 |  | 105 |  | 13 |  | — |  | 95 |  | 108 |
Derivative assets | — |  | 294 |  | — |  | 294 |  | — |  | 144 |  | — |  | 144 |
Total financial assets | $ | 46 |  | $ | 599 |  | $ | 2,277 |  | $ | 2,922 |  | $ | 30 |  | $ | 362 |  | $ | 2,060 |  | $ | 2,452 |
Financial liabilities |  |  |  |  |  |  |  |
Capital securities - fund subsidiaries | $ | — |  | $ | — |  | $ | 577 |  | $ | 577 |  | $ | — |  | $ | — |  | $ | 859 |  | $ | 859 |
Derivative liabilities | — |  | 538 |  | — |  | 538 |  | — |  | 498 |  | — |  | 498 |
Total financial liabilities | $ | — |  | $ | 538 |  | $ | 577 |  | $ | 1,115 |  | $ | — |  | $ | 498 |  | $ | 859 |  | $ | 1,357 |
The following table presents the change in the balance of financial assets and financial liabilities classified as Level 3 as of December 31, 2022 and 2021:
| Dec. 31, 2022 | Dec. 31, 2021
(US$ Millions) | Financial assets | Financial liabilities | Financial assets | Financial liabilities
Balance, beginning of year | $ | 2,060 |  | $ | 859 |  | $ | 1,682 |  | $ | 863 |
Additions | 353 |  | — |  | 553 |  | — |
Dispositions | (222) |  | — |  | (88) |  | — |
Fair value (losses) gains, net and OCI | 86 |  | (292) |  | 366 |  | 2 |
Other | — |  | 10 |  | (453) |  | (6) |
Balance, end of year | $ | 2,277 |  | $ | 577 |  | $ | 2,060 |  | $ | 859 |
Schedule of sensitivity analysis | The following table presents a sensitivity analysis to the impact of a 25 basis point (“bps”) increase of the discount rate and terminal capitalization or overall implied capitalization rate (“ICR”) on fair values of the partnership’s commercial properties for the year ended December 31, 2022, for properties valued using the discounted cash flow or direct capitalization method, respectively:
| Dec. 31, 2022
(US$ Millions) | Impact of +25bps DR | Impact of +25bps TCR | Impact of +25bps DR and +25bps TCR or +25bps ICR
Core Office | $ | 487 |  | $ | 732 |  | $ | 1,199 |
Core Retail | 384 |  | 643 |  | 1,012 |
LP Investments(1) | 757 |  | 605 |  | 1,357 |
Total | $ | 1,628 |  | $ | 1,980 |  | $ | 3,568 |
(1)The valuation method used to value multifamily, student housing, and manufactured housing properties is the direct capitalization method. The impact of the sensitivity analysis on the discount rate includes properties valued using the DCF method as well as properties valued using an overall implied capitalization rate under the direct capitalization method.

X
- Definition The disclosure of detailed information about investment property. [Refer: Investment property] + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 40 -IssueDate 2022-03-24 -Paragraph 32A -URI https://taxonomy.ifrs.org/xifrs-link?type=IAS&num=40&code=ifrs-tx-2022-en-r&anchor=para_32A&doctype=Standard -URIDate 2022-03-24 + Details
Name: | ifrs-full_DisclosureOfDetailedInformationAboutInvestmentPropertyExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The disclosure of the fair value measurement of assets. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 13 -IssueDate 2022-03-24 -Paragraph 93 -URI https://taxonomy.ifrs.org/xifrs-link?type=IFRS&num=13&code=ifrs-tx-2022-en-r&anchor=para_93&doctype=Standard -URIDate 2022-03-24 + Details
Name: | ifrs-full_DisclosureOfFairValueMeasurementOfAssetsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The disclosure of the sensitivity analysis of fair value measurement of assets to changes in unobservable inputs. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 13 -IssueDate 2022-03-24 -Paragraph 93 -Subparagraph h -URI https://taxonomy.ifrs.org/xifrs-link?type=IFRS&num=13&code=ifrs-tx-2022-en-r&anchor=para_93_h&doctype=Standard -URIDate 2022-03-24 + Details
Name: | ifrs-full_DisclosureOfSensitivityAnalysisOfFairValueMeasurementToChangesInUnobservableInputsAssetsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The disclosure of significant inputs for which market data are not available and that are developed using the best information available about the assumptions that market participants would use when measuring the fair value of assets. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 13 -IssueDate 2022-03-24 -Paragraph 93 -Subparagraph d -URI https://taxonomy.ifrs.org/xifrs-link?type=IFRS&num=13&code=ifrs-tx-2022-en-r&anchor=para_93_d&doctype=Standard -URIDate 2022-03-24 + Details
Name: | ifrs-full_DisclosureOfSignificantUnobservableInputsUsedInFairValueMeasurementOfAssetsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | ifrs-full_InvestmentPropertyAbstract
Namespace Prefix: | ifrs-full_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration