| Right-of-use assets |
12Right-of-use assets The analysis of the net book value of right-of-use assets by class of underlying asset is as follows: | | | | | | | | | | | | | Warehouse | | Land use | | | | | Property | | equipment | | right | | Total | | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | | | (i) | | (ii) | | (iii) | | | Cost: | | | | | | | | | At January 1, 2024 | | 1,652,404 | | 10,648 | | 1,782,410 | | 3,445,462 | Additions | | 2,093,794 | | — | | — | | 2,093,794 | Derecognition | | (367,834) | | (10,648) | | — | | (378,482) | Exchange adjustments | | 3,820 | | — | | — | | 3,820 | | | | | | | | | | At December 31, 2024 | | 3,382,184 | | — | | 1,782,410 | | 5,164,594 | | | | | | | | | | Additions | | 2,097,560 | | 13,666 | | — | | 2,111,226 | Derecognition | | (434,893) | | — | | — | | (434,893) | Exchange adjustments | | (35,394) | | — | | — | | (35,394) | | | | | | | | | | At December 31, 2025 | | 5,009,457 | | 13,666 | | 1,782,410 | | 6,805,533 | | | | | | | | | | Accumulated depreciation: | | | | | | | | | At January 1, 2024 | | (437,087) | | (9,172) | | (98,343) | | (544,602) | Charge for the year | | (637,772) | | (1,478) | | (45,212) | | (684,462) | Derecognition | | 227,072 | | 10,650 | | — | | 237,722 | Exchange adjustments | | (1,169) | | — | | — | | (1,169) | | | | | | | | | | At December 31, 2024 | | (848,956) | | — | | (143,555) | | (992,511) | | | | | | | | | | Charge for the year | | (918,624) | | (7,637) | | (45,210) | | (971,471) | Derecognition | | 275,526 | | — | | — | | 275,526 | Exchange adjustments | | 4,074 | | — | | — | | 4,074 | | | | | | | | | | At December 31, 2025 | | (1,487,980) | | (7,637) | | (188,765) | | (1,684,382) | | | | | | | | | | Impairment: | | | | | | | | | At January 1, 2024 and December 31, 2024 | | — | | — | | — | | — | | | | | | | | | | Charge for the year | | (112) | | — | | — | | (112) | | | | | | | | | | At December 31, 2025 | | (112) | | — | | — | | (112) | | | | | | | | | | Net book value: | | | | | | | | | At December 31, 2024 | | 2,533,228 | | — | | 1,638,855 | | 4,172,083 | | | | | | | | | | At December 31, 2025 | | 3,521,365 | | 6,029 | | 1,593,645 | | 5,121,039 |
The analysis of expense items in relation to leases recognized in profit or loss is as follows: | | | | | | | | | | | For the year | | For the six | | For the year | | For the year | | | ended | | months ended | | ended | | ended | | | June 30, | | December 31, | | December 31, | | December 31, | | | 2023 | | 2023 | | 2024 | | 2025 | | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | Depreciation charge of right-of-use assets by class of underlying asset: | | | | | | | | | Property | | 285,393 | | 215,399 | | 637,772 | | 918,624 | Warehouse equipment | | 3,592 | | 1,784 | | 1,478 | | 7,637 | Land use right | | 45,208 | | 22,604 | | 45,212 | | 45,210 | Less: amount capitalized as construction in progress | | (45,208) | | (22,604) | | (45,212) | | (45,210) | | | | | | | | | | | | 288,985 | | 217,183 | | 639,250 | | 926,261 | | | | | | | | | | Interest on lease liabilities (Note 8) | | 34,396 | | 25,112 | | 91,623 | | 126,829 | Expense relating to short-term leases | | 15,322 | | 13,729 | | 75,755 | | 108,656 | Variable lease payments not included in the measurement of lease liabilities | | 18,614 | | 24,802 | | 47,314 | | 46,313 |
Details of total cash outflow for leases and the maturity analysis of lease liabilities are set out in Note 20(c) and Note 24, respectively. Notes: | (i) | Property – right-of-use assets |
The Group leases properties for its self-operated stores, warehouse storage and office spaces. The leases of self-operated stores typically run for two to twelve years. Leases of office spaces and warehouse storage typically run for a period of one to seven years. As at December 31, 2024 and 2025, right-of-use assets related to leased properties for self-operated stores amounted to RMB2,264,064,000 and RMB3,210,178,000, respectively. Variable lease payments based on sales Some leases of self-operated stores contain variable lease payments, which typically range from 3% to 18% of the annual or monthly sales that each store makes in excess of a certain breakpoint predetermined with landlord. These terms are common in retail stores in countries such as United states where the Group operates. | (ii) | Warehouse equipment – right-of-use assets |
The Group leases warehouse equipment, with lease terms of three years. The Group acquired the land use right of a parcel of land located in the PRC through the acquisition of a subsidiary, with an original lease term of 40 years. The refundable rental deposit itself is not part of the lease payments and is in the scope of IFRS 9. Therefore, the rental deposit should be measured at fair value on initial recognition. The difference between the initial fair value and the nominal value of the deposit is an additional lease payment made by the Group and it is included in the measurement of the right-of-use assets.
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