b'A N N U A L R E P O R T 2 0 1 7 - 2 0 1 8NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018(Expressed in Trinidad and Tobago Dollars)5.Property, plant and equipment (continued)In 2014, the National Insurance Board of Trinidad and Tobago initiated the development of lands previously held for investment situated at Queens Park East, Port of Spain. A decision was taken that the development would see about 40% of the structure being used for Head Office operations and the other 60% to generate rental revenue. As a result, reclassification of the investment property to property, plant and equipment was made. Construction started in March 2015, with the structure being a Class A building with Leed Gold certification. It was completed in January 2017 at a cost of $372 million and was officially occupied in February 2017.6.Investment properties Depreciation 1 July 2017Additionsin fair valueAdjustments2018$000$000$000$000$000Buildings97,850(3,550)94,300Land230,900(500)230,400328,750 (4,050)324,700Depreciation1 July 2016Additionsin fair valueAdjustments2017$000$000$000$000$000Buildings114,500(16,650)97,850Land236,724 (5,824)230,900351,224 (22,474)328,750Rental income from investment properties during the year amounted to $6.8 million (2017: $6.7 million). Direct operating expenses incurred on investment properties during the year amounted to $0.4 million (2017: $4.6 million).The valuation of the investment properties was conducted as at June 2018 by an independent professional valuator in accordance with the Royal Institute of Chartered Surveyors valuationprofessional standards. The Income Approach which considers a propertys potential cash flow and analyses the present worth of the anticipated future benefits to the owner over an assumed holding period was the methodology used to value the buildings. The Market Approach and Residual technique were utilised for the valuation of land. The Market Approach measures the value of a property by comparing recent sales or offerings of similar or substitute property and related market data. The Residual Technique begins with an estimate of gross proceeds of sale that are expected from the sale of developed lots in the proposed subdivision. All costs (hard and soft) associated with the development of the proposed subdivision, together with an allowance for entrepreneurial profit are then deducted from the estimated gross proceeds of sale. Development costs obtained from engineers and entrepreneurial profit is based on discussions with developers. This technique was utilised in the valuation of the lands at Palmiste. For all other properties where the Market Approach was adopted, the value in the financial statements are based on their highest and best use. 52'