content_image/286327.jpg content_image/286328.jpg content_image/286329.jpg
## Investment Properties 

The following table presents the major contributors to the year-over-year variances for our investment properties: 

<img src='content_image/286327.jpg'>

Acquisitions and development activity increased our investment properties by $7.4 billion. Acquisitions included logistics and distribution properties in the UK and the southwestern U.S. The company also purchased, together with fund partners, a large portfolio of office properties in Los Angeles. We sold 56 properties during the year, which decreased investment properties by $1.9 billion and crystallized $244 million of valuation gains. The prior year included $107 million of losses on non-core asset sales. 

Fair value changes increased carrying values by $1,031 million (2012 – $1,276 million), as discussed on page 23. 

The fair value of investment properties is generally determined by discounting the expected future cash flows of the properties, generally over a term of 10 years using discount and terminal capitalization rates reflective of the characteristics, location and market of each property. The key valuation metrics of our investment properties are presented in the following table on a weighted average basis, disaggregated into the principal operations of our property segment for analysis purposes. The valuations are most sensitive to changes in discount rates and terminal capitalization rates. It is important to note that changes in cash flows and discount/terminal capitalization rates are usually inversely correlated as the circumstances that typically give rise to increased interest rates (i.e., strong economic growth, inflation) usually give rise to increased cash flows although timing may vary. 

<img src='content_image/286328.jpg'>

## Property, Plant and Equipment 

The following table presents the major components of the year-over-year variances for our property, plant and equipment (“PP&E”), disaggregated by operating platform for analysis purposes: 

<img src='content_image/286329.jpg'>

We carry PP&E in our renewable energy operations and a significant portion of the PP&E within our infrastructure operations at fair value and revalue these assets at the end of each fiscal year. 

