137 ANNUAL REPORT 2025 Corporate Governance 3. INTEREST RATE RISK UHREIT’s exposure to changes in interest rates relates primarily to interest bearing financial liabilities. The Manager actively monitors and manages UHREIT’s net exposure to interest rate risk through the use of interest rate hedging instruments and/ or fixed rate borrowings, where applicable. As at 31 December 2025, 76.2% of the borrowings are hedged at fixed rates. 4. CREDIT RISK The Manager manages credit risk from the outset by conducting credit risk assessments of potential tenants prior to signing the lease agreements. Security deposits are also collected from the tenants where applicable. In addition, UHREIT mitigates credit risk through staggered lease maturities, diversification of revenue sources by ensuring no individual tenant contributes a significant percentage of its gross revenue and implements rental collection procedures to ensure rentals are collected and arrears are followed up promptly. 5. INVESTMENT RISK All investment opportunities are subject to a rigorous and disciplined evaluation process to meet UHREIT’s investment strategy of enhancing Unitholder return and pursue opportunities for future income and capital growth. Investment opportunities are evaluated based on a comprehensive set of investment criteria which include but not limited to the asset’s specifications, location, expected returns, yield accretion, growth potential and performance sustainability, while considering the prevailing economic climate and market conditions. All investment proposals are subject to the Board’s review and approval. 6. COMPLIANCE RISK UHREIT is required to comply with applicable and relevant legislations and regulations of the various jurisdictions in which it operates. A compliance monitoring programme is in place to actively monitor regulatory changes affecting UHREIT and implement appropriate mitigating strategies. The Manager has also engaged KPMG Services Pte. Ltd. (“KPMG” or “Compliance Advisor”) to assist in carrying out functions such as providing training to employees on regulatory requirements and provide advice with respect to best compliance practices and application of rules and regulations for UHREIT. Where necessary, staff are also sent for external training to ensure that they are keep up to date on any new regulations that are rolled out. In addition, UHREIT adopts a strong anti-corruption and anti-bribery stance and regularly communicates key policy requirements to ensure relevant policies, processes and controls are effectively designed, managed and implemented so that compliance risks and controls are effectively managed. 7. CYBER SECURITY RISK The Manager is aware of the rising risks associated with information technology (“IT”) as cybersecurity attacks become more widespread and sophisticated. The Manager conducts periodic reviews of its technology risks and disaster recovery program, with the intention to minimise the impact and continue operations caused by disruption to the IT systems. The Manager also requires its employees to undergo a cybersecurity awareness course every year to keep them up-to-date with the latest cybersecurity threats.
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